Why You Can't Wait to Buy a New Boat - #BoatBlurbInsights
By Craig Ritchie
Boat dealers ran out of inventory last summer and this year could be exactly the same. Here’s why you shouldn’t waste time if you want a new ride for summer 2021.
Last year a record number of people bought their first boat. That big surge in sales, combined with a smaller supply of boats due to coronavirus-related factory shutdowns earlier in the year, resulted in some boat dealers running out of inventory by mid-summer as the demand outpaced the supply.
That scenario could repeat this summer as boat builders struggle with shortages of parts and raw materials. Supply chain problems over winter 2020 have become so severe that in recent weeks a growing number of boat builders have once again had to slow production or halt it altogether.
If you’re thinking about getting a boat, you might want to make your move soon before the supply dries up again.
Blame The Arctic Vortex
The shortages that are likely to be seen this summer stem directly from the Arctic Vortex winter storms that brought heavy snowfalls and freezing temperatures to Texas last month. The prolonged blast of Arctic weather froze pipes, took down the power grid, and caused massive damage to several of important factories, including the only five plants in North America that make a product called propylene oxide. PO, as it’s better known, is a critical raw material used to make the foam that’s used for seat cushions.
As of mid-March the factories remain under repair and the existing supply of foam has virtually disappeared, causing boat builders, RV manufacturers and even automakers like Toyota and Honda to halt production while they wait for seats.
“The plants that make the raw material were damaged, and now the supply of foam for seating has become very tight,” says Phil Smoker, vice president of sales at Smoker Craft Inc., which builds fishing boats, pontoons and fibreglass runabouts under its Smoker Craft, Starcraft, Sylvan and SunChaser brands. “Even the best-case estimates set our production back by weeks. Some other builders are looking at even greater delays.”
We’re Out Of Chips
It always sucks when you run out of chips, but it’s even worse when they’re computer chips used to run just about everything. The same Texas snowstorm that wiped out seat foam production also took out at least three different semiconductor plants which, combined with the US government having recently blacklisted chip suppliers from China over security concerns, has resulted in a sudden shortage of semiconductors.
While that poses obvious problems for companies that build fish finders and GPS systems, the impacts go beyond touch-screen displays since almost everything we build today – from engines to radios to appliances to even window blinds and sunroofs – has some kind of computer control that requires semiconductors to work. It’s a component shortage that impacts virtually anything that has a display panel or is controlled by the touch of a button.
Competition for semiconductors has become so fierce that there are reports of companies paying delivery surcharges of up to $40 apiece on chips that are only worth $5 to begin with, just to ensure they get them. As competition for semiconductors grows, it will inevitably lead to shortages of electrical components that go into boats, and more delays in getting finished boats to dealer showrooms.
Shipping Is A Nightmare
The problem for boat builders is that seat cushions and semiconductors are only the tip of the iceberg. They’re also facing shortages of basic raw materials like aluminum, fibreglass, gel coat, stainless steel, vinyl, and marine plywood. Or as one boat builder says, they’re running out of “pretty much everything.”
In some cases it’s because of a shortage farther down the supply chain, like the PO needed to make the foam cushions that go into boat seats, or a lack of semiconductors used to make a multi-function display. But in other cases the biggest problem is a simple shortage of delivery trucks.
With the US and Canada now mobilizing delivery of millions of doses of the Covid vaccine, there are simply fewer trucks available to move everyday goods to market. That’s further compounded by a serious decline in the number of truck drivers on the roads today. Over the past year the trucking industry is said to have lost more than 100,000 drivers in the US alone, due to a combination of burnout and concerns over Covid-19. As a result, it’s getting harder for companies to ship goods to their customers, and boat builders are having a harder time arranging deliveries of crucial raw materials. What’s more, some builders are having an equally difficult time getting trucks to ship finished boats to their dealers.
If it sounds like a perfect storm for a boat shortage, then you’re right because that’s precisely what boat builders and boat dealers expect for the summer of 2021.
Thinking about getting a new boat? Good for you, and welcome to the water. But don’t put your decision off for long, because taking your time to pull the trigger could leave you stuck on shore.
If you're an interested buyer, check the latest available inventory in your area at BoatDealers.ca. #news #tips