If you’ve tried to purchase a new truck or trailer, or even some replacement parts, in the last few months, you know that supply is tight. Unfortunately, nearly every industry expert we’ve talked to predicts that this shortage will last at least until 2022.
First, let’s take a look back at how we got here. COVID-19 was the straw that broke the supply chain, particularly for microchips. Every truck manufactured now requires multiple microchips for components like the transmission, driver assist and infotainment. As the COVID-19 outbreak spread across the globe, manufacturing of these chips slowed to a crawl, and in some places, even stopped. Labor shortages due to sick leave, the need for social distancing and raw material shortages all slowed production. In response, many vehicle makers decreased production, dropping the demand for chips, as the demand among home entertainment (laptops, gaming systems, smart home items) jumped.
COVID-19 wasn’t the only hit to the microchip supply chain, though. A fire at one of the largest vehicle chip manufacturers dealt another blow to the industry. Chip manufacturing plants in Texas grappled with power outages due to a massive winter storm in February, delaying manufacturing further. But microchips weren’t the only supply chain challenge. Raw materials like steel and aluminum have also seen shortages.
As COVID-19 case rates fluctuate globally, consistent extraction of raw materials and manufacturing has been challenging to maintain. And making the parts isn’t the only problem. Demand for ground transportation is up a lot! While that’s great for drivers, it means it’s hard to get supplies from factories and ports to distribution centers and dealerships.
These shortages aren’t limited to Mack or Volvo, or even just to the vehicle industry. Global microchip and raw material shortages are affecting all manufacturers and products from ATVs and boats to electric toothbrushes and dog washing stations. And the unfortunate reality of these shortages is that they won’t be fixed quickly. The supply chain for microchips, frame rails, aluminum, and everything else that goes into a truck and trailer, needs time to catch up with demand.
If this seems like a lot, that’s because it is. But truck and trailer manufacturers, like our partners at Mack, Volvo, Wabash and MAC Trailer are all working hard to reconfigure their supply chains to meet demand.
So what do you do?
Here are our tips for managing through the supply shortage, so your business can keep running smoothly.
TIP 1: Order sooner. Lead times on parts, despite our best efforts, sometimes drag out a few weeks. This can delay vital PM service and part replacements, increasing your odds of a breakdown. So, order parts sooner, order larger quantities and schedule service further out. The same can be said for buying trucks and trailers. If you want to replace equipment this year, the sooner you place the order, the greater chance it will be on schedule.
TIP 2: Communicate. Talk to your sales rep or our counter staff. If you can’t place an order earlier or don’t have the space or capital to order and store inventory, talk to our staff about it. We’re currently ordering for our parts inventory more often and increasing our on-hand inventory.
TIP 3: PM, PM, PM! Preventative maintenance will limit unexpected breakdowns. If your equipment needs to last longer than you planned, a consistent preventative maintenance plan will support that.
TIP 4: Look at used equipment. Used trucks and trailers are getting to be harder to find, but our teams are searching high and low for quality used equipment. Talk to a sales rep, let them know what you’re looking for and get on a wait list. It may still take time, but a good used truck sales rep will make sure you get notified.
TIP 5: Pre-plan everything. When life gets stressful, it can be easy to end up in a doom spiral. But panicking never helps. When equipment gets hard to find, the mad scramble starts and lots can start looking like the mall on Black Friday. But smart pre-planning with your parts and equipment sales reps can help you get new equipment sooner and keep the equipment you have running longer.
What is TEC doing?
We’ve given you some advice for handling the shortage on your end; now let’s talk about what TEC is doing. As we mentioned, we’re storing more parts inventory. We’re working with our current suppliers and forging partnerships with new suppliers to get more parts into our warehouses. We’re working very closely with our vendors to understand their manufacturing and transportation challenges, and providing support where we can. And we’re taking advantage of our huge footprint. With 32 locations across the West Coast, that’s 32 locations we can pull parts from.
We’re also exploring new avenues of product acquisition. For used trucks and trailers, our sales managers are searching in new ways and places for equipment to meet demand. Our new truck sales team is also stocking more trucks. While many are flying out of the lot faster than we can get them in, our large footprint again provides an advantage. We stock more trucks, trailers and parts than most other dealers, and the staff at our 32 locations is always working to put trucks in our lots and parts on our shelves. While this may be a stressful time for drivers and fleets, now more than ever, our customer commitment to be your best business partner remains strong.