Why You Keep Hearing About the Supply Chain

The Lingering Effects of Coronavirus on the Trucking Industry

We're now at a phase of the Coronavirus pandemic when mask mandates are being relaxed nationwide and businesses are welcoming patrons at full capacity. The world seems to be returning to normal – so why is it that you just can't seem to find a new V-band clamp, sensor, or other seemingly small parts with a decent lead time and price?

While some aspects of the pandemic seem to be recovering, the U.S. chain supply has yet to see any relief from the multiple hard hits it's taken since the beginning of the year. The shutdown of China's ports as the pandemic first began to spread was just the beginning of what's already been a long year for the supply chain, and we're only halfway into the year.

The Hunt for Raw Materials

Neither OEM nor the Aftermarket are exempt from the worldwide shortage of available raw materials. On the OEM side, manufacturers have been struggling to keep up with the demand for new equipment and the expectation to build quickly. Don Ake, the FTR Vice President of Commercial Vehicles, said in a recent webinar that it is "almost guaranteed that commercial vehicle OEMs will not be able to produce at a pace to meet demand at any point this year." With a current backlog of 11 months for Class 8 trucks and about 10 months for trailer orders, Ake forecasts that the trucking sector won't begin to catch up until well into 2022.

Heavy Duty Manufacturer Association Director of Market Research and Analysis Richard Anderson stated in a recent interview that "delays are becoming universal. They have become the norm," and referenced a recent survey of suppliers where 100% of participants indicated that they are facing inbound delays for raw materials and semi-finished goods.

What You May Not Have Heard About Computer Chips

Among the biggest supply chain issues revolve around electronic sub-components and computer chips that power the advancing technology of the trucking industry. In early March, Renesas Electronics Corp – which accounts for 30% of the global market for microcontroller units for vehicles – experienced a fire in its semiconductor factory that will take at least 100 days to recover from.

The chip shortage began at the end of last year with Coronavirus shutdowns in Southeast Asia, with the semiconductor fires leaving even more vehicles sitting unfinished in factory parking lots.

Labor Tensions Amid the Longshoremen and the Ocean Transportation Debacle

The series of unfortunate events that have plagued the supply chain has also reached oceangoing transportation. The famous blockage of the Suez Canal for six days caused a backlog of container ships in Los Angeles, Long Beach, and other ports, delaying the delivery of foam, resins, and other needed materials for vehicle seats, plastics, and steel.

On the shoreline, ongoing longshoremen strikes in both Canada and the U.S. have also contributed to reduced oceangoing transportation activity. Although new contracts are scheduled to begin next year, confrontation over terminal automation plans is expected.

The Ongoing Truck Driver Shortage

The trucking industry being short on drivers is nothing new – but within the last year, it's gotten worse, with fleets reporting multiple empty trucks and many seasoned drivers retiring. With the Coronavirus pandemic adding longer hours on the road, unfamiliar routes, and uncertain truck stop and restaurant availability, it's been especially hard to retain drivers and attract new ones over the past year.

With the pandemic now easing and travel conditions returning to normal, trucking companies across the country are now increasing wages and taking other measures to attract new drivers. If the Safe Driver Act is passed, it would allow drivers as young as 18 years old to begin commercial vehicle training. The minimum age is currently 21.

The Importance of a Strong Supplier Relationship

Although the supply chain is not expected to see major relief until late next year, establishing strong supplier relationships for your parts is important so you can stay ahead of parts availability, lead times, pricing, and get the edge on other parts that may be currently available if the one you're looking for isn't.

Check out our full haul of heavy-duty everything and let us know what you need to keep your fleets up and on the road!