England possesses one of the world’s largest and most dynamic economies, with a 2021 GDP per capita averaging £34,690, while Wales lags behind at approximately 74% of that figure, just under £26,000, making any increases in the cost of living hit harder in Wales. 

Despite a decrease from the previous month and a significant drop from the previous year’s peak, the UK’s inflation rate remains high at 3.40%, compared to the long-term average of 2.83%, leading to an ongoing cost of living crisis. This crisis, driven by steadily increasing expenses for necessities like food, housing and fuel, places immense pressure on individuals and families to stretch their budgets, while also impacting businesses, especially those in the logistics and 4PL industry, due to higher transportation and distribution costs and diminished consumer purchasing power.

One of the main ways that the cost of living crisis has affected the logistics industry, according to Freight Logistics Solutions, is through increased operating costs. For example, the rising costs of fuel, insurance, driver’s transportation and warehousing expenses, especially if they are temperature controlled. This has made it more difficult for logistics companies to remain competitive, especially if they are not able to easily pass on these cost increases to their customers which is why we’ve seen so many major hauliers go under in the past 6 months.

Another way that the cost of living crisis has impacted the logistics industry is through a decrease in consumer spending. As individuals and families are forced to cut back on non-essential purchases to make ends meet, demand for goods and services has decreased. This has led to a decrease in shipping volumes, which has put a strain on logistics companies that rely on consistent stable shipping volumes to stay afloat.

For more information about FLS and its services, click here or contact +44(0)1633 288 400.

Author WCS

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