Market Status: April 2021

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Never in my 30+ years in the industry have I seen such chaos in the supply chain. 

That’s a phrase we’re hearing more frequently these days. It's unsettling because we’ve seen many challenges in past years, but today's struggles seem to be a perfect storm.

It’s not one area, it’s many areas... and they connect in ways you might not immediately realize.

They may be a result of our efforts to get lean, cutting any and all waste from our processes which, perhaps, may have caused the supply chain to also cut resiliency.

I’m not smart enough to know the answers, but I can share what I’ve learned about where we are now. Here’s a list of new challenges we face in the wire & cable sector of industry:

  • Copper – Priced per pound and traded as a commodity at New York Mercantile Exchange (NYMEX). Prices one year ago were $2.21/lb; today they’re trading at $4.14/lb. We haven’t seen a higher price since 2011.
  • Plastic Resins – Producers announced an August price price increase of $0.03/lb — this follows identical increases in June and July. These are the result of a tight supply and high demands. After an initial slowdown when the COVID shutdown hit, usage spiked in home improvements in the U.S. and two of the four PVC makers had outages related to upstream suppliers.
  • Cardboard – The pandemic has caused a substantial increase in packaging. Everything we buy is packaged, even cables on bulk reels have cardboard drums. Thank you, Amazon.
  • Transportation -
    • International – Thanks to the pandemic, more people than ever before stay at home and order stuff they need online. Add to that three stimulus checks of free money, and the impact reaches huge proportions. Our ports are back-logged, containers are not getting unloaded, and shipping costs are soaring.
    • Domestic – Once the containers reach port, they’re off-loaded onto rails or trucks for distribution throughout the U.S. There is a growing, and extreme, shortage of truck drivers in the U.S. Many drivers are reaching retirement age and there’s not enough new drivers coming in to replace them. All of which drives up costs and contributes to delays in the supply chain.
  • Capacity – The manufacturers in the wire & cable industry have never seen the volume of business they are seeing right now. For example, one of our long-standing mills, with 60 years in the business, has never had so many orders in its entire history. Another very large mill took the opportunity during the pandemic slowdown to become more efficient by moving a plant. The trouble is their “slowdown” lasted for 30-days, now they’re overwhelmed with orders at a plant that’s only partially functioning.

What to do now

Talk with your customers — frequently and factually. Let them know that the “quick-turn” deployments they grew to know as normal are not likely to happen for awhile. Things will get better, but planning as far in advance as possible is the best way to make sure they get the product they want.

Talk with your suppliers and discuss project scopes and time lines so all eyes are on the same page.

As always, we’d love to help you!

Mike