We’d like to give a brief update on the state of the market; it’s not all doom and gloom. There’s been a lot of trouble lately, which we will touch on. There are also bright spots — more on that below.
But first: we’d like to acknowledge and pay respect to the lives lost or adversely affected by the pandemic and the slew of natural disasters this year. We know that at the end of the day, business will happen one way or another. But livelihoods can take a backseat to lives in the blink of an eye. We hope that everyone reading this message stays safe and well. If you’ve already suffered some, we hope things turn for the better soon.
Regarding the market: there is more trouble ahead, no doubt. Of course we hope for market improvements as well, though it seems that it may be awhile. All signs in the market point to continued material cost increases from all over the country and indeed all over the world through the rest of 2021 and most likely well into 2022.
Patterns Don’t Lie
From our perspective, the pattern is clear: higher prices and longer delays. We’ve seen material costs from suppliers rise, sometimes quite dramatically. Certain materials have literally tripled in cost. In some cases we’ve had to wait months for materials arrive so we can produce our products.
This stems generally from forces beyond our control. Natural environmental disasters bring industrial challenges, and reports indicate that the frequency of environmental disasters will likely increase, not decrease, in the near term. We can expect more “unforeseen” challenges with floods, fires, hurricanes, and other storms — not to mention the continuing COVID-19 pandemic.
General industry rumblings and rumors foretell even more disruption. Labor shortages in production of certain parts and materials have caused both delays and price increases. Logistical costs are out of control; a 20-foot container may cost as high as $20,000. That’s over a 1300% increase from the $1,500 it would cost earlier this year. In an industry like ours, things that directly affect other manufacturers can indirectly affect us as well.
Suppliers in the Gulf Coast region were hit especially hard by Hurricane Ida in late August. Crude oil producers in the Gulf of Mexico shut down 95% of output in advance of the storm. Widespread power outages lingered for weeks after the storm passed. Structural damage, supply shortages, and logistical challenges remain unresolved.
We know that plastics, resins, cardboard, adhesives, steel, lumber, and other materials will be tight in their respective markets for the rest of the year. Some raw material supply is stabilizing, but packaging and logistical constraints continue to create delays.
In ports on the West Coast, supply ships have days-long waits to even dock. Over 5% of all ocean capacity is currently waiting outside a port. Longshoremen are overworked and fed up; some say there is a legitimate threat of a walkout if conditions do not improve.
At the time of publication, there is a massive oil spill off the coast of California. In addition to being a tragic ecological disaster, this will no doubt reverberate in the nation’s industrial supply chain as well.
All of This is to Say…
Things are a mess…but we’re keeping a close eye on it.
At Vaniman, we’ve got our guard up. We’re bracing ourselves.
We’re planning ahead so we can take care of our customers.
Vaniman is dedicated to keeping prices as low as possible despite the increases and volatility we ourselves experience. We have never been the type of company to simply pass on new costs to our customers without a fight, and we certainly do not intend to start now.
So, in light of ongoing delays from suppliers, we are working ahead to keep proper stock where we are able so we can keep shipping swift. We’re ordering materials before they have a chance to rise in price. Where material costs rise unavoidably, we’re absorbing them as much as possible in the near-term instead of charging more for our products. We choose to believe that adversity and a changing landscape can be an opportunity to innovate and reinvent what we do.
Thank You All
This has been a trying period in our history, to say the least. Industrial supply chain issues only add on to the enormous mountain of other issues we face as a nation.
However, though our challenges demand sacrifice, ingenuity, creativity, and sweat, in them certain beauties abound: the rebirth of passion for craft and quality, the coming together of rivals to ensure mutual continued success, the newfound respect and appreciation for all workers at every level of the supply chain.
A renewed solidarity in American industries is on the rise. We will eventually pull through to a better era, and we will do it together, because we must.
As we carry on, we’d like to leave you knowing we’re doing everything we can to weather the storm. There are other manufacturers, sellers, and small businesses out there doing the same. We see you, and we applaud you.
To our customers, suppliers, vendors, and partners: thank you all for your support over the years. We hope to provide the same support back to you.