Supply chain and material goods shortages caused by the COVID-19 pandemic have created a ripple effect in every industry. These shortages have impacted the trucking industry's operations. New truck builds have been hampered by the supply chain and lack of production material resulting in delays for many new trucks. Unfortunately, these shortages are now affecting fleet demand and impacting the supply chain.
Manufacturers are ready and able to boost vehicle production to meet the growing demand for freights and other trucks. Before OEMs can start manufacturing, they need to clear clogged supply chains. The trucking industry will continue to face challenges for the rest of this year due to many shortages of parts needed for supply chains. The increasing costs of raw materials, which boost equipment prices, will also challenge the industry. With the high prices due to supply and demand, sales will eventually be impacted. Worker shortages within manufacturing plants will ultimately hurt the increased demand for vehicle production.
The semiconductor chip shortage continues to hold up the transport equipment supply chains. Some professionals forecast that this chip shortage could slow supply chains until the end of 2021, but others predict that wait times could last until 2023.
In addition to chip shortages, the industry is seeing soaring production costs, particularly with steel, aluminum, and rubber. Prior to the pandemic, steel was less than $600 per metric ton, and now sells at $1,6000 per metric ton with numbers only increasing. Aluminum sells for $2,500 per ton and rubber prices have peaked at $2.37/kg this year. With material processes being so high, it’s hard to keep up with the increased demand for production.
Although the industry will see challenges throughout the year, the U.S. economy is rebounding. In particular, the growth of GDP goods in transportation - “the portion of national GDP that generates freight” - is predicted to grow at a faster rate this year. This industry believes a 12.2% growth in Q2 will occur. A boost in truck freight will occur with the transport GDP growth, predicted to hit 14.5% growth in Q2.
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