The interplay of inertia and deformability has a substantial impact on the transport of soft particles suspended in a fluid. However, to date a thorough understanding of these systems is still missing, and only a limited number of experimental and theoretical studies are available. We combine the finite-element, immersed-boundary and lattice-Boltzmann methods to simulate three-dimensional suspensions of soft particles subjected to planar Poiseuille flow at finite Reynolds numbers. Our findings confirm that the particle deformation and inclination increase when inertia is present. We observe that the Segré–Silberberg effect is suppressed with respect to the particle deformability. Depending on the deformability and strength of inertial effects, inward or outward lateral migration of the particles takes place. In particular, for increasing Reynolds numbers and strongly deformable particles, a hitherto unreported distinct flow focusing effect emerges, which is accompanied by a non-monotonic behaviour of the apparent suspension viscosity and thickness of the particle-free layer close to the channel walls. This effect can be explained by the behaviour of a single particle and the change of the particle collision mechanism when both deformability and inertia effects are relevant.