A Chip on the Shoulder of the Van Supply Industry…
As normality begins to return, for the drainage sector it may feel very much like business has continued in the same way as it always has. After all, drains don’t stop getting blocked up because of a pandemic. And because of this, renewing or replacing a van or kit may appear to be a normal part of business. Some may have experienced a delay or difficulty in sourcing a brand new van which, given the current climate of Brexit and a pandemic, makes sense. However, you may be surprised to learn that there is another reason which is causing this trouble – and sadly vans are not the only goods affected.
For some time, there has been a global shortage of semiconductors. These are an integral part of microchips, which can be found in pretty much anything electronic, including in the majority of new cars and vans. When the market was impacted by COVID, the scarce supplies of semiconductors that existed were quickly diverted to other technologies. However, with the market snapping back both quicker and earlier than expected, demand has outstripped supply.
As a result, there have been several reports recently about major suppliers suspending or reducing production of new vehicles due to these shortages, the most recent being Ford Motor Co a few weeks back (see https://www.cnbc.com/2021/03/31/ford-slashes-vehicle-production-at-seven-plants-in-north-america-due-to-chip-shortage.html for more information). As microchips are such a central part of an industry driven by technology, both car and van productions have suffered.
We are seeing this on the ground as well – not only is it a challenge to source a new van for customers, but we’re also finding that used van prices have been affected. The main reason being that businesses and individuals that may have gone for a brand new van are now defaulting to the used market. This is also making quality used van sourcing much harder. And it isn’t just vans, we’re seeing similar things happening in the jetter market as well.
So, what does this mean for drainage businesses? Well, from our 20+ years’ experience supplying van set ups to the drainage sector, here’s some advice if you’re concerned about any potential impact:
- Plan ahead – we’re planning ahead and already making orders for vans and jetters to try and keep supply coming in for our franchisees and independents throughout 2021, and we urge you to think ahead as well. If you’re thinking of changing/increasing your fleet, starting a drainage business, or are upscaling, consider that any vehicle and set up need (including jetters) may take longer than expected. Speak to someone about this now, and they can advise you on expected timescales.
- Check your current vehicle – it’s worth spending a little time health-checking any vehicles and equipment. If any of it is coming to the end of its life, you should start thinking early of replacing it to avoid any delays in service.
- Consider alternatives – if you have a specific brand of van in mind that isn’t available for the price you want, consider and research into alternative vans, as they may be more accessible and still serve the same purpose.
At the moment, there doesn’t seem to be an immediate end to this shortage (we’re hearing that potentially March 2022 will see normality return). So, plan ahead, be aware of the issues, and feel free to talk to us on 02392 299557 or visit our website at www.capitalfleetsolutions.co.uk about what this may mean for you.