A note from Rick Burke
Shipping / Freight 2022
In conversations with one of our major regular freight vendors in early January, they noted the forecast for ease of surcharges, pricing, etc., in the freight industry is NOT in site. With the industry’s unwavering need for drivers (there is still a great shortage) coupled with the high demand for trucks, the industry is basically “naming their price” on moving freight. Some freight companies have already put their sustaining regular accounts on notice that freight prices are not only increasing further, but increases will be ongoing. No company enjoys learning that additional increases are forthcoming, but freight companies, LTL and TL, note basically that they will “haul the loads that pay the most”. It’s the customer’s choice whether or not to use them.
Historically, freight companies, as many of us well know, work hard and call constantly to get your business. Currently, with so much freight needing to be moved and less availability of trucks, it’s a freight line market. Adding to this, freight companies are having to pay great bonuses, increasing pay/salary, benefits, etc. for their drivers, especially the good ones, in order to keep them. With the high demand for freight and lack of drivers, the drivers have choices as to where they want to work so companies are doing everything they can to keep them.
Additionally, some freight lines have been unable to sustain during this time and have basically either sold out to bigger lines or shut the doors completely. This means there are less choices for suppliers to utilize to move our freight.
To further the spike in prices, petroleum is set to increase and any surcharges currently levied will definitely increase.
Pricing in 2022
Setting and sustaining prices to dealers/customers for the 2022 season is near impossible for our industry. Raw material increases continue to escalate and we forsee increases quarterly until inventories can be re-built.
Along with the instability of pricing, there are supply chain issues and worker shortages. Currently we see significant shortages of materials to produce finished goods industry wide which will continue over the next 6 months, well into the spring and summer season.
With inventories we as suppliers were able to build up already consumed, many manufacturers have been and will be hand-to-mouth with components needed to produce finished goods. The majority of raw material producers are on allocation of materials to us, their customers. These allocations could be only as high as 50% or as low as 35% of what would normally be needed to fulfill our customers’ needs.
Along with the raw material issues, the labor shortages and COVID have created major production issues for suppliers. It is difficult to manufacture if you have no personnel on the floor for production. This makes any catching up or trying to keep inventory more than difficult.
We, at NGI thank all of our dealers and customers for their patience during the past and upcoming trying times. It is greatly appreciated. Working together we will all see this through.
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Rick Burke
NGI Sports
P: 423-499-5546
F: 423-499-8882
E: [email protected]
www.ngisports.com
2807 Walker Rd
Chattanooga, TN 37421