As the National Sales Manager for the Industrial Laser Solutions division at Tie Down, I rely heavily on the satisfaction of my customers. As a result, I work hard with both managing their expectations and delivery schedules. Sometimes this generates a delicate balancing act. But as an American, I hold high standards for how deliverables are implemented and fulfilled.
Lately, the current material shortages make it hard for Americans to come to grips with the manufacturing bottlenecks they cause. These economic environment forces are real and seem to have no end in sight. As part of the Tie Down team, these circumstances fuel my disappointment for the current and potential harm it causes.
These days we all find ourselves in the unfamiliar position of waiting for products such as lumber, steel, and even parts for swimming pools. Most of these companies limit production quantities to combat maximums. Steel mills simply are not producing more than their contractual obligation. This creates shortages downstream. This economic environment for supplier deliveries causes immense worry but I see my platform as a way to communicate what we see from our perspective as a leading American manufacturer.
“GDP increased at an annual rate of 6.4% in the first quarter of 2021. This increase reflects the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic…
In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. In the fourth quarter of 2020, the real GDP increased 4.3%.” – U.S. Bureau of Economic Analysis
Specialty steel products continue shrinking in supply, as well as cold-rolled and galvanized. We currently quote some customers with steel lead times out until September. With the steady increase of CRU since September 2020, the pricing increased by at least triple of previous levels.
Steel mill production has not met the demand and now forecasts that the mills will not catch up until late August. When orders are shipped short, the mills do not offer make ups. Most of these companies limit production quantities to combat maximums. Right now, the outcome remains to be seen if the maximums will be provided.
Labor shortages continue rising, meanwhile unemployment remains at 6.1%.
Truck driver shortages are “critical” with the rise in unshipped loads to 50% higher than 2020’s numbers.
“Unless trucking companies, logistics providers and shippers work together to finally resolve trucking’s driver problem, transportation and logistics costs will rise substantially, and supply chains will be put at risk.” – JOC
The strong labor demands means short-term challenges continue until productivity increases at the supply chain primaries.