As you all probably know, there is a ship stuck in the Suez Canal, which is blocking transit. You may not think this directly affects you, but it will. It’s just a matter of time.
I own an HVAC distributor, and HVAC is a subset of industrial distribution. Most manufacturers are still reeling from last year’s Covid issues. Commodities like copper, steel, aluminum and sliver were already spiking in price before this latest logistics issue.
I spoke with one of my major component suppliers this week. The cost of a container from Asia to the US was $5k last year. This year it is $15k. And there simply aren’t enough to go around.
While the Suez blockage doesn’t directly affect this trade route, it does affect the overall global logistical issues – and wreaks havoc on just in time producers.
I have one manufacturer of HVAC equipment that suspended all new orders a few months ago as they grapple with staffing issues.
When you combine all of this, I don’t think that there is any question that there will be finished good shortages again this Summer. First affected will be stuff made “over there”. We are already seeing shortages on things like ductless mini split systems because of the continuing port slowdowns on the west coast of the USA. It isn’t even Summer yet.
Here is where it affects you. The guys who have the stuff will win. Hands down. I made an enormous inventory investment this Winter and Spring, placing orders far in advance of what I normally would. I’m not going to let that investment go to waste – and I’m not spending basically every waking hour getting stuff in my barns to help my contractors get their jobs done for nothing. If I’m the only guy who has it (and trust me, on some things, I will be) – the price just went up. It’s nothing personal, just business.
Believe me when I say that I wish my life were easier and yours cheaper, but I won’t be alone in this. If you end up with an issue with anything from car parts to electrical to something as simple as a washer breaking down, you will be paying more in the very near future.