For some months now, we have heard a lot about the rising cost of certain materials, price increases due to the shortage of certain raw materials and their transport.
How does the shortage of materials affect us as freight forwarders?
We are approaching dates where the delivery of new assets is ubiquitous due to the end of leasing contracts or fleet renewals. As simple as the delivery of old units, to be replaced by new equipment. Not just the mere desire to obtain new machines but to meet sustainability objectives. For example, the new refrigeration equipment developed by the two giant monsters like Thermoking and Carrier brings efficiency and electronics to the forefront. It also requires new boxes where manufacturers are delaying deliveries.
What does it mean economically speaking?
Manufacturers do not hesitate to raise prices as they have no choice; the clear example has been the semiconductor market where B2C Hardware suppliers have taken the lead, as the end consumer is willing to pay that premium implicitly in the final price. However, in the case of B2B, such as the automotive industry focused on large fleet business, their scalability policy of the last 20 years focused on lowering costs has placed them in the queue for raw materials. As a result, these manufacturers have never been willing to pay such a premium for certain materials, which today are out of stock, ready only for the highest bidder.
Will it affect the fresh products 2021/2022 campaign?
From our point of view, if we are facing a year similar to 2018/2019, we may find a shortage of supply (trucks). This could lead to an escalation in prices which, at the moment, we hauliers are not managing to pass on to our customers. We do not have a crystal ball to predict what will happen, but the level of uncertainty is very high. Suppose fruits & vegetable consumption recovers, with volumes and above all import demand from the big consumers UK – Germany – France – Benelux. We will face a very complex situation if the delays in fleet deliveries are not resolved in the next four months.