When Costs Change Overnight: The Value of Contingency in Practice

Melina Psarra, 14/04/2026

Recent developments on the global stage and rising tensions in the Strait of Hormuz have once again highlighted how vulnerable energy markets are to geopolitical factors. Within a short period of time, Brent crude oil prices increased significantly, surpassing $90 per barrel during peak uncertainty. In Greece, the impact was immediate: the average price of unleaded gasoline rose, reaching and exceeding €2 per liter, while diesel prices followed a similar upward trend, significantly increasing transportation costs.

In this environment, many businesses found themselves unprepared. Companies in the logistics and transportation sector (3PLs) proceeded with immediate price adjustments, notifying their clients even through a simple email. Overnight, the landscape changed. Agreed pricing structures were no longer valid under the same conditions, and operating costs rose unexpectedly.

For many businesses—especially those incorporating transportation costs into their final product or service—the dilemma was significant. On one hand, they could absorb the increased costs, directly impacting or even eliminating profit margins. On the other, passing the cost onto customers risked dissatisfaction, loss of competitiveness, or even strained commercial relationships.

The question, however, is not why this happened. The real question is: why were so many businesses caught off guard?

The answer lies in insufficient preparation. This is precisely where contingency comes into play.

Contingency is not theory. It is not an academic concept that remains at the planning stage without practical application. Nor is it “magic” or the ability to predict the future. It is a structured, practical approach to preparing for events that, while not precisely predictable in timing, are certain to occur.

At its core, contingency is about establishing mechanisms that allow businesses to respond immediately, systematically, and without friction when unexpected changes arise.

One of the most effective tools in this context is the fuel surcharge model.

The principle is simple yet powerful: before any disruption occurs, the involved parties agree on a pricing adjustment mechanism linked to an objective index—typically fuel prices. This model clearly defines the baseline, the calculation methodology, and the frequency of adjustments.

However, developing such a model is not a simple or standard process. It requires careful consideration, experience, and a deep understanding of both cost structures and supply chain dynamics. A poorly designed model may shift disproportionate risk to one party or fail to realistically reflect market changes.

For this reason, it is critical that such models are designed with rigor and expertise, taking into account the specific characteristics of each business and partnership.

At this point, the role of specialized advisors becomes essential. Supply chain consulting firms, such as P.S.I. Advisors, support businesses in designing and implementing these mechanisms, ensuring that agreements are balanced, practical, and resilient in times of volatility.

With a properly structured fuel surcharge model in place, when fuel prices fluctuate, there is no need for renegotiation. No tension arises. No difficult decisions under pressure. New data is simply applied to the agreed model, producing transparent and objective outcomes.

The value of this approach extends beyond crisis management. It also enables proactive preparation. Through such models, businesses can simulate different scenarios, assess the impact of 10%, 20%, or higher cost increases, evaluate their limits, and define their strategy in advance.

In this way, managing uncertainty becomes not a reactive process, but a proactive one.

In conclusion, in an environment where volatility is the norm rather than the exception, contingency is not a luxury—it is a business necessity. It is not about predicting the future, but about being prepared for it.

Ultimately, the difference is clear: businesses without preparation are forced to react under pressure. Those that have embedded contingency into their operations simply execute their plan.