The landscape has changed for auto parts suppliers and they, along with wholesalers and repair shops, should get used to the “new normal” facing the industry.
Brandon Kraal, senior vice president of international at eShipping, a logistics and transportation management company, spoke with aftermarket suppliers in a recent webinar and described the challenges facing logistics is facing and how the aftermarket must bow to persistent obstacles.
“I don’t think anybody right now feels like this volatility is going to end anytime – [it] will continue, ”Krall said in the September 1 edition of the Automotive Aftermarket Suppliers Association’s supply chain webinar series. “We will therefore have to continue to adapt, adjust our supply chain strategies and remain agile.”
Additional tariffs were already causing problems for importers. Then, COVID-related issues began to manifest in early 2020 before exploding in March of the same year. And now the Delts variant has added another set of headaches.
“When COVID hit, whether it was us or our neighbors, it really started to change the way [people] spend their money, ”explained Krall. “People have stopped spending money on services, like taking trips or flying or taking vacations and are really starting to spend money, be it on consumables, in particular. [on their] home – home renovations, home additions, furniture, home office supplies, fitness, whatever it is. We drastically moved to a consumer economy, which I think really surprised most importers at the time. “
And it didn’t stop. The threat of further restrictions due to the Delta variant, expect additional spending on things like furniture and household items. This could further congest the already busy commercial ports.
“We should therefore expect and no longer be surprised at the operational challenges we all see, whether it is securing the capacity and space that is causing congestion in US ports to rail problems,” he said. observed Krall during the webinar titled Global Aftermarket Supply Chain Logistics: Managing Freight. “And it’s really at this current stage to become the new normal or the normal state of affairs.”
Major terminals have been closed or experienced delays for a variety of reasons, but all are generally related to COVID-19. The port of Yantian in China was closed for much of May. The Meishan terminal had a case of COVID last month and was scheduled to resume operations on September 1. Then the Shanghai airport terminal experienced an epidemic.
“And so when these outbreaks do happen … it not only impacts that specific loading port, but all the ports around it, because everyone will try.” [to re-route their shipments out of there]”said Krall.
Alternatives like Vietnam, India and Malaysia have had their own epidemics and closures while trying to deal with the influx of shipments being sent.
“We continue to fight the effects of COVID around the world. And that’s not to mention all the impacts in the United States as well, ”Krall said.
And then there are other challenges that arise unexpectedly. Take, for example, the Ever Given freighter that got stuck in the Suez Canal hit hundreds of ships, including 96 freighters. Canada contributed to the delays with a port strike in Montreal that threatened the delivery of essential goods and services across the country. Wildfires in British Columbia disrupted port shipments. The weather, like typhoons, caused a delay of one week in Shanghai; the floods in Western Europe put a stop to it.
In addition, employment challenges also plague the shipping industry. “[With] cargoes safeguarded in the ports, the capacity of the warehouses is extremely, extremely limited. Plus, it’s hard to get the workforce to work in the warehouse, ”Krall said. “Trucking capacity is extremely limited. “