The Inflation’s Squeeze on the Logistics Sector in 2024! How to Stay Competitive (with reusable packaging) in 2025?

Rising Inflation and Its Impact on the Logistics Sector

In 2024, inflation continues to challenge the global economy, with significant impacts on the logistics sector. According to recent data from Eurostat, inflation in the Euro area reached 6.5% in September 2024. While in the UK it was 10.2%, marking a slight improvement from 2022 when was reported 13.9% inflation – the highest in 25 years! But even current inflation in the Kingdom still posing a considerable challenge. Central banks worldwide are grappling with the persistent inflation driven by ongoing geopolitical tensions, energy price volatility, and supply chain disruptions. These figures are putting immense pressure on businesses, especially in the logistics sector. Every cost – from fuel to raw materials – is rising, threatening to erode profit margins and stifle competitiveness.

To remain competitive and resilient, companies need innovative strategies to reduce operational costs. A critical area to examine is logistics expenses, especially the use of reusable packaging and efficient carrier management.

Innovative Logistics Solutions to Combat High Transport Costs

Transport costs remain a significant burden on the logistics sector. The price of fuel and ocean freight continues to rise, making it imperative for companies to find ways to cut these costs. An effective solution is to adopt a pooling system, where companies share transport resources and reusable packaging.

• Pooling Deliveries: Combining shipments with other companies to minimize empty return trips.
• Storage Solutions: Utilizing shared storage facilities to reduce costs.
• Recycling and Maintenance: Regular maintenance of reusable packaging to extend its lifespan and reduce costs.
• Sustainability: Lowering the environmental footprint through reduced fuel consumption and packaging waste.

By implementing these practices, companies can significantly cut transport costs while also contributing to a more sustainable supply chain.

Designing Custom Carriers to Reduce Damage Costs

Damaged goods during transport can be a hidden cost driver. Investing in high-quality, custom-designed packaging can mitigate this risk. Such packaging should be tailored to provide optimal protection without being over-engineered.

1. Tailored Packaging: Design packaging(custom pallet boxes) to fit specific products, reducing damage during transit.
2. Efficiency in Packing: Streamline the packing process to save time and reduce handling costs.
3. Cost-Effective Materials: Use materials that balance cost and durability.

Custom-designed pallet boxes not only protect goods better but also improve operational efficiency, leading to cost savings.

Inflation’s Bite on Raw Materials: Time to Rethink Disposable Packaging

The cost of steel, wood, and carton has soared in recent years. When disposable packaging reaches its destination, it’s discarded, forcing logistics companies to purchase new carriers for the next shipment. This creates a cycle of waste and expense.

The answer is simple: shift away from disposable packaging and embrace reusable options. This not only saves money on material purchases but also reduces your environmental impact by minimizing waste generation. By implementing a reusable packaging system, you’ll be operating more sustainably and contributing to a circular economy. The costs associated with disposable packaging are rising, driven by increasing prices of raw materials like steel and wood. Switching to reusable packaging can offer significant long-term savings.

1. Reducing Material Costs: Invest in durable, reusable packaging like plastic pallet boxes (collapsible) to avoid frequent purchases.
2. Environmental Benefits: Decrease waste and support sustainability initiatives in logistics sector.
3. Operational Efficiency: Reduce time and labor costs associated with managing disposable packaging.

Reusable packaging not only lowers costs but also positions companies as environmentally responsible, which can be a competitive advantage.

Recovering Existing Packaging: A Practical Example

Reuse packaging and utilize returnable packing!

What if the majority of the packaging you use to ship your items to clients does not return to you, but can be reused? Now is the best time for you to reuse your packaging. This solution will save you money on new packaging while also reducing your environmental effect.
Recovery of already manufactured packaging – your profit!
A little over for the details. Using this example, we will demonstrate why it is beneficial to focus on recovering existing carriers. The simulation compares the costs of the current situation (no recovery) versus the recovery of pallets with nearly comparable parameters.
Assumptions (current situation)

• Current Situation: Purchase price of €7.50 per pallet, with no reuse.
• Pallets delivered: 100 000

The return of already manufactured packaging

Assumptions (new situation)

• New Approach: Implement a deposit system to encourage returns, charging €10.00 per pallet with a credit of €9.00 for intact returns and €7.00 for damaged ones.
• Collection takes place once a month, with a minimum of 1 loading metre and a defined profile of goods deliveries divided between trade and construction site.

When pallets are sent back, how much do they cost?

By recovering pallets and pallet boxes, companies can significantly reduce the cost per pallet and decrease the overall logistics costs.

Lowering Storage Costs through Packaging Buyout

Efficiently managing packaging can also help reduce storage costs. Companies often face high storage costs due to unused pallet boxes taking up valuable space. A packaging buyout can alleviate this issue:

• Packaging Buyout: Sell unused packaging to recoup costs and free up warehouse space.
• Use Foldable Pallet Boxes: When empty they save a lot of space both in the warehouse and on the return transport. This will save you money from fuel and empty space.
• Optimize Space: Use freed space for more critical operational needs.

This strategy helps companies optimize their warehouse space, leading to cost savings and improved efficiency.

Sustainable Logistics Services and Lower Environmental Costs

Environmental sustainability is becoming increasingly important in logistics. Companies can reduce costs associated with environmental factors by adopting green logistics practices:

1. Green Logistics: Implement eco-friendly practices to reduce the environmental impact.
2. Tax Benefits: Take advantage of tax incentives for sustainable operations.
3. Fuel Efficiency: Invest in fuel-efficient transportation methods.

Sustainable logistics not only reduce costs but also enhance a company’s reputation and compliance with environmental regulations.

A Sustainable and Cost-Effective Future for Logistics

Inflation may be a harsh reality, but it doesn’t have to cripple your logistics operation. By embracing reusable packaging solutions, you can streamline your processes, reduce costs, minimize waste, and ultimately emerge stronger and more competitive. Implementing pooling, custom-designed reusable carriers, and packaging recovery programs are just some of the ways your company can weather the storm and thrive in the face of inflation. Remember, a commitment to sustainability is not just environmentally sound; it’s a strategic decision that can significantly improve your bottom line.

Ready to take control of your logistics costs? Contact Zamko today. Our experts will analyze your supply chain and develop a customized reusable packaging solution that meets your specific needs, helping you navigate inflation and secure a sustainable future for your business.

Releases: Eurostat, Rotom