Where are the Car Parts in 2021?
We just want to take a minute to say THANK YOU! We appreciate your patience as we navigate these strange times!
What’s up? you ask?
They’re calling it “The Biggest Supply Chain Disruption Since World War II.” For the most part, our automotive parts suppliers are doing a great job of getting us the parts we need in light of what they’re up against. It’s coming at them (and us) from all angles….
But now more than ever, you may hear that there are delays in getting the parts needed to repair your vehicle or that the prices of automotive parts aren’t in line with what they were just a few short months ago.
In short, the ripple-effect of the COVID-19 pandemic and our unemployment response is catching up with the auto parts industry. We’re seeing:
Depleted Supply of Car Parts After COVID-19 Shutdown
- In the U.S. and across the world, manufacturing was limited as plants closed down during the 2020-2021 COVID-19 shutdowns
- Auto Repair is considered an essential business. While manufacturing shut down, a large percentage of U.S. auto repair shops remained open to help… and so did the parts vendors who supply them
- Huge increase in DIY auto repairs during the pandemic. People at home filled their days with household improvements… and tinkering with cars in their own garages. They needed parts – lots of parts because the first one they tried didn’t always fix their problem
- It didn’t take long. We’ve depleted the stock of automotive parts that we had on shelves
Skilled Labor Shortages in Automotive Manufacturing
- Shutting manufacturing down is much easier than starting manufacturing back up
- Ongoing shortage of skilled labor with 1 million U.S. manufacturing jobs unfilled (10 million jobs across all industries)
- That means it takes longer than before to make and package products to restock our shelves and warehouses
- Unemployment supplements have interrupted motivation to return to the daily work of production. According to Bruce Ronning of DR1V Group, a NorthAmerican parts manufacturer, their Paragold shocks & struts plant in Arkansas was short 150 workers… until the day after the State of Arkansas stopped the federal unemployment subsidy. “That stopped on a Thursday. On Friday – that Friday – there were 350 people in our parking lot looking for work.” Paragold filled the plant to capacity.
- Baby boomer retirements have increased noticeably – they won’t be returning to the workforce…
- Increasingly fewer workers in the trades in general than past generations. Everyone is trying to recruit from the same small pool of skilled employees to fill vacancies
- Fewer skilled workers = higher wages = higher cost to the end user for the same skilled services
Raw Material Shortages Worldwide
- We’re seeing unprecedented shortages of raw materials like steel, precious metals, microchips, chemicals, lubricants, solvents and more (Side note: Anybody notice that the use of the word “unprecendented” has increased at an unprecedented rate??)
- Not only do we have limited stock of finished parts, we also have limited supply of raw materials to make new stock
- Vehicle manufacturers are mostly producing partially-finished vehicles.
- Storage lots are filled with acres of new vehicles that just need “this or that part” in order to complete production. But without that microchip, sensor, or other part… “car no go.”
- Vehicle manufacturers are shutting down their manufacturing plants for 2 weeks to 1 month at a time because they don’t have what they need to deliver completed vehicles. Ford shut down their F150 plant for 1 month and their Explorer plant for 2 weeks. Nissan recently announced a shutdown for 2 weeks. Estimates range from 1.5 million to 5 million fewer cars will be produced this year than expected.
- Parts and tire manufacturers are following suit by cutting back production because they don’t have materials or labor manufacture at full capacity. We just got word that Hankook Tire has scaled back production to 50% until summer 2022.
Dealers Are Buying Up Aftermarket Parts
- In some cases, Dealers’ OE Parts Supplies are even more restricted because they only have one manufacturing source, whereas the aftermarket has many
- Local car dealerships are actually purchasing aftermarket parts now because their OE parts stock has run out
- Dealers are buyers who never used to be in the aftermarket but are now gobbling up supply the independent repair shops rely on
- The word from our vendors is that Toyota has almost no OE brake rotors available currently so they are buying aftermarket, and that Ford has removed their dealerships’ restrictions to regulate aftermarket parts purchases
Unbelievable Shipping Challenges to Get Automotive Parts in Our Hands
- 500%+ increases in the cost of off-shore cargo shipping containers. For reference, a cargo container used to cost $3000-5000 to ship. Today? $30,000 and rising.
- Import Tarriffs on steel goods, tires, etc impact pricing because we currently can’t get the products we need here in the U.S.
- Manufacturers are paying the increases in order to serve their customers, but we can expect prices to go up in response. If the manufacturers are to stay alive, they won’t be able to just absorb these astronomical costs – especially not when they have so little inventory on hand to sell.
- Domestic and overseas ports are being closed due to COVID cases, including oubreaks from the new Delta variant
- Our shore waters are congested with barges of shipping containers waiting to off-load imported goods – but the ports can’t process them fast enough. According to Brian Norko from NGK, one container represents 750,000 parts for his company. They currently have 26 containers sitting outside of Long Beach. That’s nearly 10 million pieces floating on a barge in the ocean rather than getting into the hands of American auto parts wholesalers.
- Stateside, finding workers to drive trucks to get the parts to our vendors’ warehouses is also difficult post-pandemic
- Increased demand for air transport alternatives (which used to be unheard of for heavy, bulky parts like control arms, brake rotors and tires)
- Cardboard shortages due to online buying increases during the pandemic. Amazon and other online retailers increased demand on cardboard (which also needs to be manufactured) as consumers began purchasing everything remotely. Most auto parts need to be boxed and labeled before they can be shipped, but cardboard can be hard to come by.
Increased Demand for Auto Repair Services By American Drivers
Meanwhile at Lee Myles, we are doing our best to keep up with the increased demand for auto service as more customers than ever are in the market for auto repair.
But why are more people than ever before in need of auto parts and auto repairs now?? It’s because along with all the above conditions, we simultaneously have:
- Low supply of new + used vehicles for sale which prompts more customers to want a professional to “fix my car” rather than buy a new one
- Repairs and maintenance backlogs generated by the “work-from-home” pull-back. The trend is reversing as commuters return to the office. Suddenly, everyone’s ready for service at the same time
- Americans with a bit more room in the budget from stimulus checks, unemployment supplements and stock market gains. Many motorists now have the money to invest in repairs they’ve put off… and continued use of the vehicle has made the need more urgent
Sporadic Parts Deliveries Change the Auto Repair Shop’s Workflow
As you can imagine, for us, the unpredictability of when part deliveries will actually arrive makes managing workflow through the shop more challenging than ever.
It’s almost like Christmas morning every time a delivery driver pulls up, lol. Yes!! The anticipation is killing me. Gather ’round everybody. What did we get? Oooo! Ok – This is for you, Boyd. This one’s for you, Eric. And here’s the one you’ve been waiting on Lee!
But on the flip side, with some parts still being available on schedule, and others parts available much later timetable than expected, we can also end up with a parts tsunami all of a sudden! Parts delivery shelves that were empty a minute ago are suddenly spilling over with too many auto parts that now need to be installed on vehicles as soon as possible! We try to minimize the stress on our team during those times. But we’re the first to say, it can be tough to provide both consistency for our team and speed of service for our customers as we do our best to manage these unusual circumstances.
What We’re Doing at Lee Myles Auto Care & Transmissions
So there are a LOT of current challenges. And we think it helps to share what’s going on behind the scenes to cause some of the delays our industry is facing.
But we want our friends to know that we’ve got your back!
Our Lee Myles professionals are working with our vendors to source parts as quickly and affordably as possible – without sacrificing the repair or parts quality we know you depend on. We are trying our absolute best to keep prices the same and honor prior estimates while still balancing unusually high demand and wonky part-delivery timing.
We believe the supply chain disruption will be with us well into 2022, and the delays in turn-around times will continue to build up increased demand for auto repair.
Bottom Line: Don’t Wait Until the Last Minute to Schedule Auto Repair!
We recommend not putting off significant repairs or maintenance that will affect the safety and functionality of your vehicle – especially tires, brakes and transmission repairs as those are some of the most common shortages we are seeing. If you know you have a pending repair, now is the time to get your vehicle in the queue so we can get parts on order. We truly don’t want to see you stuck without the transportation you need as things continue to tighten up.
We value your trust in our team, and we know you value the service and expertise of our crew. We thank you for hanging in there with us as we do our best to keep things rolling. We remain committed to serving you with the highest level of excellence possible in the automotive industry today!
Your friends, the professional Lee Myles Auto Repair & Transmissions auto repair teams in Southeast PA
- Remarkable Results podcast “Supply Chain: Getting Parts to Market Post Pandemic [THA 237]” (Bruce Ronning, Brian Norko, Malcom Sissmore, Paul McCarthy, Carm Capriotto), 8/19/2021
- Automotive Training Institute webinar “[email protected]: Global Supply Chain Disruptions” (Richard Menneg, Jay Kurzman, Kim Hickey), 8/11/2021
- Daily professional discussions with outside sales representatives from our local parts vendors indicating the obstacles they are encountering, August 2021