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How inflation affects logistics
Let's assume that you are the owner of a logistics business. You manage the supply chain, everything is calculated, fine-tuned and runs like clockwork. It would seem that this is stability. And suddenly - inflation: transport has become more expensive, warehouses are eating up profits, and margins are slipping through your fingers. Let's find out how to stay afloat.
Rising fuel prices
When resource prices go up, the first thing to go up is fuel. For logistics businesses, this is almost a disaster - every link in the logistics chain, from the first kilometre to the last, becomes more expensive.
Advice from the experts at LLC «SyncraNova»:
Keep track of expenses on a weekly basis. Break budgets into short cycles and look for where you can optimise now rather than later.
Rising prices for warehousing services
Inflation is creeping up on warehouses unnoticed. Rent, utilities, machinery, staff salaries - it all gets more expensive. At some point, you start paying for air: stock is lying around, turnover is falling, and the cost of rent is rising. And then you're already working just to maintain infrastructure, not to grow.
Advice from the experts at LLC «SyncraNova»:
Switch to dynamic inventory planning. Too much - you lose out on storage. Too little, you risk supply disruptions. Use analytics and real-time data to keep the sweet spot. Regularly renegotiate agreements with contractors. In an inflationary environment, contracts signed ‘forever’ kill margins.
Inflation hits deadlines
Prices are rising and with them unpredictability. One contractor can't bear the costs, goes bankrupt and the whole chain stops. Another one delays shipment because he can't buy raw materials at new prices. Carriers are off schedule because they are short of fuel or staff. Insurers are covering risks by raising rates. Every link is working on the edge, and the slightest disruption is passed on. One late delivery and your customer is already looking at the competition.
Advice from the experts at LLC «SyncraNova»:
Build backup routes, find alternative contractors, build time buffers into delivery times. The more flexibility you have, the better your chances of staying afloat.
Rising fuel prices
When resource prices go up, the first thing to go up is fuel. For logistics businesses, this is almost a disaster - every link in the logistics chain, from the first kilometre to the last, becomes more expensive.
Advice from the experts at LLC «SyncraNova»:
Keep track of expenses on a weekly basis. Break budgets into short cycles and look for where you can optimise now rather than later.
Rising prices for warehousing services
Inflation is creeping up on warehouses unnoticed. Rent, utilities, machinery, staff salaries - it all gets more expensive. At some point, you start paying for air: stock is lying around, turnover is falling, and the cost of rent is rising. And then you're already working just to maintain infrastructure, not to grow.
Advice from the experts at LLC «SyncraNova»:
Switch to dynamic inventory planning. Too much - you lose out on storage. Too little, you risk supply disruptions. Use analytics and real-time data to keep the sweet spot. Regularly renegotiate agreements with contractors. In an inflationary environment, contracts signed ‘forever’ kill margins.
Inflation hits deadlines
Prices are rising and with them unpredictability. One contractor can't bear the costs, goes bankrupt and the whole chain stops. Another one delays shipment because he can't buy raw materials at new prices. Carriers are off schedule because they are short of fuel or staff. Insurers are covering risks by raising rates. Every link is working on the edge, and the slightest disruption is passed on. One late delivery and your customer is already looking at the competition.
Advice from the experts at LLC «SyncraNova»:
Build backup routes, find alternative contractors, build time buffers into delivery times. The more flexibility you have, the better your chances of staying afloat.
Fluctuations in rates and prices
Inflation ruins all forecasts. Yesterday you had one delivery cost in mind, but today you see completely different figures on your invoices. Long-term contracts no longer guarantee stability. And without a clear understanding of costs, you either can't tell the customer the price or risk selling at a loss.
Advice from LLC «SyncraNova» experts:
Work with floating rates. This will help reduce the shock of sudden price spikes. Use automated pricing tools - manual calculation is not competitive in such circumstances.
Inflation ruins all forecasts. Yesterday you had one delivery cost in mind, but today you see completely different figures on your invoices. Long-term contracts no longer guarantee stability. And without a clear understanding of costs, you either can't tell the customer the price or risk selling at a loss.
Advice from LLC «SyncraNova» experts:
Work with floating rates. This will help reduce the shock of sudden price spikes. Use automated pricing tools - manual calculation is not competitive in such circumstances.
The human factor and turnover
With inflation, people are starting to look for somewhere that pays more. This applies to drivers, warehouse guards, logisticians - everyone. Losing a key link can bring down the whole chain. And finding a new one takes time.
Advice from LLC «SyncraNova» experts:
Revise staff motivation not only with money - working conditions, stability and respect are also decisive. Automate processes so that dependence on people is as low as possible, and the loss or temporary absence of one employee does not put everything on pause.
Inflation isn't just a price increase. It's a wave that sweeps away those who aren't prepared. Money is leaking out not because you're not doing a good job, but because you're not taking into account the new rules of the game. Look ahead. Analyse. Plan. Don't be the one who catches on when it's too late.
With inflation, people are starting to look for somewhere that pays more. This applies to drivers, warehouse guards, logisticians - everyone. Losing a key link can bring down the whole chain. And finding a new one takes time.
Advice from LLC «SyncraNova» experts:
Revise staff motivation not only with money - working conditions, stability and respect are also decisive. Automate processes so that dependence on people is as low as possible, and the loss or temporary absence of one employee does not put everything on pause.
Inflation isn't just a price increase. It's a wave that sweeps away those who aren't prepared. Money is leaking out not because you're not doing a good job, but because you're not taking into account the new rules of the game. Look ahead. Analyse. Plan. Don't be the one who catches on when it's too late.