The SMB shipping trap: Trying to go it alone

Uncertainty Is the New Certainty

Businesses want predictability. They have not had it for a year and a half.

“Businesses want certainty, right? That’s what they want and that’s what we’ve been lacking for the last 18 months,” Madine said.

Scale changes how a company absorbs that. Large shippers have the resources to model scenarios and staff the problem. The only thing they lack is turning speed.

“It takes a lot now. If you’re a big company, you’re trying to move your supply chain, it takes a long time,” Madine said. “I think small businesses, although they may not have the resources in-house to make big sweeping moves, they’re a lot more nimble. That’s the one thing about most of our smaller business customers. They’re still run by entrepreneurs. They’re really nimble.”

Madine has watched the tradeoff play out inside his own company.

“I look at us today versus how we were 30 years ago: We were way more nimble 30 years ago, but we’re way more prepared to deal with things today,” he said. “Any business that’s thriving in this environment, they’re good at making change, whether they’re doing it in a structured way or they’re nimble.”

Why Small Business Shipping Costs Are Higher for Longer

Not every cost pressure in the market is temporary, and Madine draws a hard line between the two categories.

“I think there are some structural changes in the transportation market that are occurring right now independent of tariffs, independent of the Strait of Hormuz and oil, independent of all that,” he said. “There are some structural changes going on in the world of freight where it’s going to be more difficult than it was for new capacity to come online. So that means that we’re probably in an environment where the cost of transportation is going to be higher for longer.”

That does not apply evenly across modes, but it does change the planning horizon.

The distinction is the whole exercise: While transitory shocks call for tactical adjustment, structural shifts justify rewriting sourcing and network strategy.

“Should you make a change to your long-term strategy because of a six-month or eight-month short-term blip? No,” Madine said. “Could you make a change to your strategy because of something longer-term and more structural? That’s when you make big strategic changes.”

The Inventory Question Has No Single Answer

Buy ahead of the duty and eat the carrying cost, or stay lean and pay the tariff later. Madine said the answer splits sharply on the balance sheet.

“If you’re a large business with a big balance sheet and you can afford to hold more inventory on it, that may be the right answer for you,” he said. “But if you’re a small business where cash flow is king, that’s not the right answer for you.”

“Everyone always wants the one-size-fits-all solution, but they don’t exist.”

Smaller Shippers Are Not Shrunken Enterprises

ShipStation Global serves more than 3 million customers worldwide, weighted toward small and midsize shippers. Madine said the most persistent misread of that segment is treating it as a scaled-down version of the enterprise.

“Most people assume that the needs of a smaller shipper are the same as the needs of an enterprise shipper. It’s just that the smaller shipper does less of it. And that’s not really the case,” he said. “Smaller shippers don’t have the same expertise in-house. They don’t have the same scale in their operations. So they need solutions that can work with the resources that they have.”

The mismatch shows up in the advice small shippers get. Madine pointed to one question that arrives constantly: Should we move volume to a regional carrier?

“For some customers maybe the answer is yeah, that’s a good idea. But for most of our customers: You’re not the right size business to do that,” he said. “Let’s look at some ways for your size business how you should fix this problem.”

One Pane of Glass, or Seven Systems

Visibility is the other gap. Most small shippers either cannot see their freight after it leaves the dock or can see it only by logging into a half-dozen platforms.

“Once it leaves my dock, how do I know where it is? How do I make sure that it’s getting through customs? A lot of that can be done through technology today,” Madine said. “And most businesses either don’t have access to it, or they’ve got access to it in seven different systems.”

Madine is blunt about the limits of any vendor, including his own.

“There’s not a company on the planet that can change how tariffs are being implemented or not implemented. There’s not a company on the planet that can change the price of oil,” he said. “So you react to that environment.”

There is a scale threshold where doing it in-house pencils out. Madine puts it high.

“If you’re one of the world’s five or 10,000 largest shippers, you may be able to get all that done without the help of a company like ShipStation, and you should,” he said. “But if you’re not one of the world’s 5,000 largest shippers, you’re going to need a lot of help.”

The pressure points will rotate. That is the part Madine treats as fixed.

“This year it’s just straight-up Hormuz and tariffs, but next year it’s going to be something else, because I’ve been in this industry for 30 years and it’s always something,” he said. “It’s ever-changing, and it’s going to be something new next year that we’re talking about. So you’ve got to have the right tech, the right visibility, the right partners, the right relationships.”