business backgrounder | economy
Experts say strong consumer demand , lack of warehouse space , aging infrastructure , shortages in trucking and warehouse labor and limited production at overseas factories contribute to the crisis .
“ It all really translates into one thing , which is higher prices at every level ,” AWB Government Affairs Director Mike Ennis says .
These challenges also highlight the importance of workforce development and investments in infrastructure , Ennis said .
“ When those things become unbalanced we see what happens ,” he said . “ So policies that encourage , enhance and improve workforce and infrastructure should be supported .”
Employers shared their concerns with AWB staff during the 2021 Manufacturing Week bus tour .
“ We heard very consistently from every member that the supply chain disruptions are real and significant ,” Ennis said .
In Renton , Sales Manager Brian Trumbull of Out of the Box Manufacturing has created an informal network of friends in the industry to share tips and information with customers . They call themselves “ the masterminds .”
“ There ’ s just a lot of noise out there ,” he said . Certain parts are hard to find and others have been subject to extraordinary price increases .
Part of Out of the Box ’ s business model is quickly producing prototypes for inventors and suppliers . This means parts must be sourced quickly , as well .
“ Bookings might be up 50 %, but we still can ’ t get it out due to the parts shortage ,” he said . “ Now we ’ re having difficulty offering that kind of turn because we can ’ t get the parts .”
Shipping costs are another challenge . Rankin Equipment distributes some specialty machinery from Europe , such as an orchard flail mower produced in Italy . Rankin used to spend about $ 7,000 to move a shipping container from Italy to Yakima . Now he spends up to $ 20,000 .
There ’ s another development that ’ s impacting Rankin ’ s industry , and eventually all consumers . A boom in the agriculture industry has farmers , ranchers and orchard operators scrambling to upgrade equipment while they can . And now it costs more .
“ Prices have gone up on most of our implements and attachments anywhere from 20 to 30 % this year ,” Rankin said .
Some predict the supply chain will continue to be a challenge into 2022 . Many industry observers are questioning the old “ justin-time ” concept of buying parts right when they ’ re needed and keeping low inventories , including Rankin .
“ But now with all these lead times extended out ,” Rankin said , “ in many cases you have to go ahead and commit and get it locked in , get it bought , so the price won ’ t go up , and so you can get the merchandise .”
38 association of washington business