Dear Valued Kelsan Partner,
We want to provide you with an update on the current cost environment within our industry as you plan for 2022.
As you are aware, 2021 has seen unprecedented cost increases that have impacted all areas of the country and, as a result, manufacturers have been pushing through frequent and significant price increases (many times with limited or no advanced notification).
In addition to manufacturer costs increases, Kelsan has seen a variety of direct operating cost increases that have impacted our ability to serve you effectively.
Inflation in costs have impacted all areas of our business including:
- Fuel costs
- Inventory transfer costs (people and transportation)
- Wages for both driver and distribution employees
- Inbound freight costs both domestic and ocean
- Warehouse supplies
- Warehouse maintenance
- Fleet maintenance
The costs in these areas have seen increases exceeding 20% in some cases. Below is information from the U.S. Bureau of Labor Statistics: https://www.bls.gov/news.release/cpi.nr0.htm
“The all-items index rose 6.8 percent for the 12 months ending November 2021, the largest 12-month increase since the period ending June 1982. The commodities less food and energy commodities index rose 9.4 percent for the 12 months ending November 2021.”
Going forward, Kelsan will have to push these increases through in real-time as they occur. We will continue to work on your behalf to minimize future increases as much as possible. Our team can collaborate with you and your organization to identify options that may be available for alternative products or solutions to reduce the impact of manufacturing increases. Click the link below to schedule a business review with your representative:
We appreciate the opportunity to serve you through this difficult time. As always, we LOVE working with you and look forward to working together to manage the challenges of the future!
Executive Vice President