Long delivery times and price increases

Background blocks

Corona had a major impact on several sections of society, including trade. Both businesses and consumers faced long delivery times and unexpected price hikes.

After several lockdowns and restrictions, society got back on its feet. Still, not all problems have been solved. How can we deal with them? We talk about it in this blog.

How did we end up in this situation?

The production of our equipment is mostly in the Far East, especially in China.
During corona, China acted rigorously. Not only factories, but entire cities went on lockdown. This brought both production and logistics to a halt for months.
In addition, with China offering no government support, many smaller manufacturers and entrepreneurs fell over – the suppliers for the big factories. Container prices went up as much as three to five times. As a result, many parties decided to temporarily switch to air freight.

Supply and demand

At the time, demand was expected to go down. All over the world, production was down, factories had closed and workers were sitting at home. So everyone expected the demand for products to decrease too. The opposite happened. The difference between supply and demand became totally unbalanced.

Scarcity

Because of corona, everyone started working from home. Demand for additional equipment exploded. At the same time, e-commerce trade grew tremendously. The high demand for IT equipment created a shortage of raw materials, especially substances from which semiconductors and chips are made.

The shortage of chips left essential parts missing for various types of equipment, which could therefore not be assembled. This did not only affect our market. Other sectors, including the automotive industry, also suffered immensely.

The war between Russia and Ukraine also led to increased demand for chips from the defence industry. This means that the few chips available have to be distributed among even more parties.

As a supplier, Dalosy is in the middle of the frenzy.

Positive outlook

Inmiddels lijkt de markt weer enigszins te stabiliseren. De productie is weer op gang gekomen en sommige levertijden zakken naar een redelijk niveau. Vooral bij mobiele apparatuur zien we duidelijk verbetering. Dat is helaas nog niet het geval bij netwerkapparatuur die we nodig hebben voor draadloze infrastructuur. Hiervoor gelden nog steeds levertijden van zes maanden tot een jaar. Dit vanwege enorm lange back-orders die eerst moeten worden weggewerkt.

Bij Dalosy richten we ons op de toekomst. De lange levertijden zullen nog wel even aanhouden, dus daarmee moet je ook op de lange termijn rekening blijven houden. We spelen hierop in door apparatuur op voorhand al te reserveren bij fabrikanten. Ook kopen we meer in dan nodig, zodat we kunnen bufferen.

Tip from Dalosy

We can expect more price increases from manufacturers in the coming years. So the important tip of this blog is: plan your projects well ahead. Look beyond 2023 and 2024 now. Find out in advance what orders you need to place. Then we can make a good estimate regarding delivery times.

Be sure to discuss delivery times. Our account managers know what is going on. They can save you money with good planning!

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