Navigating Supply Chain Challenges

We’re in the midst of a perfect storm: The extraordinary combination of a global pandemic, labor inconsistencies, and volatile economic conditions is creating challenges around the world.

Van Meter—along with you, other suppliers, and the entire industry—is experiencing the same widespread supply chain issues: higher freight costs, greater material costs, shortages, weeks- or months-long shipping delays, and longer lead times.

Through all of this, our biggest concern is the impact of these challenges on you.

To help you manage your business and projects more effectively over the next several months, we want to share what we know about these shifts, what you can expect, and how we plan to soften the impact when possible.

What’s Behind Supply Chain Challenges?

Material Shortages

At certain points throughout the pandemic, manufacturing slowed down or paused altogether. We’re now seeing material shortages and increasing costs as a result. Across the board and around the world, raw material costs have risen.

Steel prices have increased rapidly while inventory remains low. PVC is the highest it’s been in more than a decade; prices are expected to remain up.

Because of shortages, some manufacturers are implementing distributor allocation models, others are limiting quantities of certain products and making sure there are enough to go around.

Transit Concerns

Meanwhile, the material that is available amid this shortage is being held up in transit due to increases in e-commerce, buying surges, and skeleton crews. Right now, bringing material into the United States is a drawn-out process no matter where it’s coming from. Compounding freight issues is a worldwide shortage of 40-foot cargo shipping containers due to a fast increase in demand.

Van Meter receives regular updates on port traffic: Recent reports tell us that ports on both U.S. coasts are juggling lines of anchored cargo ships waiting to unload. Many of these ships may be anchored for at least another month. Ports on the other side of the globe are severely congested as well compounded the challenges. Lead times are inconsistent and frequently being pushed back. Material that routinely ships within a week is suddenly reflecting 10- or 12-week lead times.

This delay is also causing some of Van Meter’s partners to utilize international air to avoid ocean shipments. Manufacturers temporarily absorbed the price increase, but rising freight costs will continue and ultimately be passed along to customers.

Price Catch-Up

Due to the pandemic, many suppliers chose to hold back on price increases in 2020. As a result, this year is bringing higher prices in an effort to align with cost increases over the last 13 months. Cost increase across the board have been consistent for all suppliers through 2021 and we anticipate increases to continue for the foreseeable future.

Enduring Continued Supply Chain Challenges

It looks like this perfect storm will continue to hover over the industry, leading to more unpredictable and frustrating times ahead. We expect to see much of the same: inconsistent and sudden changes in lead times, price increases, and material shortages.

When possible, Van Meter is completely committed to minimizing the impact of supply chain challenges on your business. To do this, we’re:

• Boosting our own inventory to provide some insulation against shortages.
• Exploring additional vendor options that may provide new opportunities.
• Being transparent and straightforward about rapidly changing lead times and costs. We’ll be as honest as possible, even if we’re not sharing great news.

Our partners are also doing their part by building their own additional inventory, hiring incremental labor, extending mandatory work hours, and establishing robust expediting processes for mission-critical projects.

As always, we value and appreciate your business. For everyone, these challenges are frustrating, time-consuming, and sometimes unavoidable. We all feel the effects of changing market dynamics. Thank you for your patience—and for trusting us to take out-of-the-box approaches to solve problems.

Van Meter will continue to monitor the situation and keep you updated. We’re here to answer your questions, and we encourage you to keep in touch with your sales contact so you have the latest information. We’ll do everything we can to make things easier.

Why There are Now So Many Shortages (It's Not COVID)

Do you have questions about what’s happening with the supply chain—or how it might impact you? Give us a call at 1-800-247-1410. We’re happy to share what we know.