The Loadstar leader: Legislators listen up!

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“They are the lifeblood of the economy.”

Appealing to the “mom and pop” business owner has been a key battleground in almost every election campaign. To the politician, the SME is a demographic to be coveted, courted, won over… and then, often abandoned.

Take for instance The Loadstar’s post today on the European Commission’s watering down of its Corporate and Sustainability Due Diligence directive. Articulated as supporting SMEs by removing them from “onerous” and “restrictive” reporting requirements, it has certainly had its plaudits. But a number of forwarders also believe omission will prove something of a competitive disadvantage. A short-term gain offset by long-term… death.

The SME forwarders’ argument is: consumers want to know they are not purchasing products of slave labour, or pushing the planet closer to environmental oblivion. As such, the CSDD offers a badge of honour.

For multinationals (MNCs) the cost is onerous but viable, and ensures they maintain market share. For SMEs, the cost is not only onerous, it is, in many cases, not viable, and yet, in an age of enhanced scrutiny, it is also essential.

In the aftermath of the Brexit trade deal, countless SMEs aired frustrations that Whitehall had not consulted with smaller shippers about the practicalities and processes of leaving the EU. Unsurprisingly, when the rule changes came into force, many SMEs found themselves struggling with compliance, prompting a wave of business collapses and spiking the level of M&A activity.

Politicians may have courted SMEs – but the tool of the politicians, legislation, shows the interest is only skin-deep. Instead the legislative environment resulted in a loss of SMEs by creating sub-optimum conditions.

The question for legislators now is how to level the playing field in a way that doesn’t cripple SMEs, but also allows them the opportunity to wear that badge of honour. Perhaps listening rather than lecturing during political campaigning, or following through on promises made, could be a first step. The smallest voices are always the hardest to hear.