The Impact of Allocations, Shortages and Supply Chain Issues

By Loren Feldkamp AASP-MN Associate Division Director

Daily life in the automotive industry is proving to be difficult due to product shortages and supply chain issues. What once was taken for granted is now becoming difficult to achieve.

We all see empty dealership vehicle lots brought on by the worldwide chip shortage. Independent automotive businesses that used to find common brake parts after one phone call now place multiple calls before finding what they need. The supply chain bottlenecks related to many full barges sitting in the ocean unable to be unloaded is impacting our industry and many others. The hope that ships might be unloaded faster is not coming true due to a shortage of truck drivers and workers in rail transportation. New car dealerships are experiencing numerous backorders on parts just like the independent automotive distributors are seeing.

The lubricant and related product industry is also challenged in the current marketplace. Raw materials and chemical additive packages have been placed on allocation, which limits how much of each product distributors can purchase. Volumes have returned to normal levels and above, which has caused shortages of products. Diesel exhaust fluid is increasing in price because the basic chemical ingredient, urea, is in short supply. Brake cleaners are rising in cost dramatically due to heptane and hexane producing factories being shut down by recent hurricanes. Many lubricant viscosities are in short supply due to base stock and additive shortages.

Products not experiencing shortages are still being impacted due to transportation challenges, again leading to periodic shortages in the marketplace. Some lines of parts are not in shortage situations, but their packaging is in a shortage situation, adding to the complications. Last year’s freeze event, ongoing labor shortages, the pandemic effects and more recent events (such as hurricanes) are all being blamed.

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Experts are predicting that 2022 may be even more challenging than 2021. These situations are driving costs up and increasing the time needed to continue running our businesses as usual. Businesses are being forced to pass on the increased costs to the end consumer, leading to true inflationary influences throughout the economy. The cost of living has risen 5.4 percent in the last measured period.

My hope is that the labor shortage heals itself soon and that we can all find some relief from product shortages and increasing costs of doing business as we approach the new year.

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WHAT WE DO: Recycle plastic bumpers improving shop production! and keep them out of landfills. WHAT WE DON’T DO: Recondition, fix or Contact us today for sell bumper cores for repair.details & scheduling!

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Business Coaching

180BIZ offers members a 20 percent discount on one-on-one sales and management coaching programs (covering financial planning and analysis, strategic marketing, leadership and personnel development) without long-term commitments. Members also receive a 25 percent discount on monthly sales & management webinars, as well as a 20 percent discount on all 180BIZ advisor training programs. For more information, call (540) 833-2014 or visit 180biz.com.

Online Educational Portal

AASP members have access to free webinars designed to enhance management skills and help their business thrive. Visit elearning.autoserviceproviders. com to check it out. For more information about any of the AASP National programs above, contact the AASP-MN office at (612) 623-1110 or aasp@aaspmn. org.

BUMPERS PILING UP???

A-Con Recycling can help! Give us a call today at 651-252-6000 for more details WE CAN HELP! and scheduling. 22 | November 2021

AASP-MN News

WHAT WE DO: Recycle plastic bumpers A-Con Recycling doesn’t recondition, fix or sell bumper cores