by Liz Stevens, writer, The American Mold Builder
As 2022 gets underway, mold builders are facing many pressures. An increased demand for products is crashing head-on into the lingering worker shortage and a crippling supply chain crunch. With the current tight material supply and rising prices, logistics madness and a booming market for consumer products, it is no surprise that mold builders have lost sleep wondering how suppliers got into this mess, how mold building is currently being impacted and when the supply chain might return to normal.
How did the supply chain jam transpire?
The supply chain dilemma stems from several factors – some from before the pandemic began. Prices for imported materials already had risen in 2018 due to the previous administration’s trade and tariff policies. Then COVID-19 hit, sending shock waves that resulted in factory slowdowns or shutdowns in China that spread to the US and the rest of the world.
The start of the COVID-19 crush affected industry suppliers but not in the ways that the suppliers expected. In the Spring of 2020, suppliers faced an entirely new and unpredictable future; many of them feared that the entire US economy would shut down due to the dramatic “shelter in place” orders issued in many states. Suppliers scrambled to sell what stock they had on hand and then radically scaled back their production. But then, at the start of the summer, suppliers were shocked by the unexpected: consumer demand surged rather than tanked.
The pandemic caused a surge in demand for medical-oriented products like ventilators, PPE and coronavirus test kits. But the scope of the demand surge was much more widespread than this – nervous citizens began buying up all sorts of household supplies. Then, with the pandemic hobbling activities and travel severely restricted, home-bound Americans began a consumables and home improvement shopping spree that upped traffic along global trade routes.
At the start of 2021, when industry suppliers thought that the balance of demand and supply finally had evened out, along came unprecedented winter storms in the US, including a disastrous deep freeze in Texas that crippled petrochemical plants. The still-surging import traffic flow then was hit by a whammy as cargo shipping was upended after the ship Ever Given wedged itself in the Suez Canal. Meanwhile, the US buying spree continued and the incoming goods – on ships finally able to navigate the Canal – began overwhelming US ports, rail transport and trucking, all of which also impacted the import and delivery of materials to manufacturers. As of January 2022, the Omicron variant of COVID-19 began blanketing the nation with skyrocketing contagiousness but milder disease than the Delta variant. And everyone, in every industry, in every nation, was waiting to see what would happen next.
The state of the industry
For a look at the current situation and some helpful suggestions, The American Mold Builder talked to representatives from the tooling industry. Tony Brodzeller, sales, Mastip Inc., Jackson, Wisconsin, offered insight from the perspective of a hot runner equipment manufacturer. Andrew Davis, vice president of supply chain, Swiss Steel USA Inc., Carol Stream, Illinois, contributed an assessment of how mold builders’ steel suppliers have been affected. Harry Centa, senior program manager, PartnerShip, Oberlin, Ohio, weighed in from a company that offers all facets of shipping and logistics.
According to Tony Brodzeller, the supply chain issue is affecting Mastip in three distinct areas as it pertains to supplying hot runners, manifolds and other components to mold builders. “Material availability, especially round stock for nozzle bodies and bar stock for manifolds, is an area we constantly are monitoring,” Brodzeller said. “We also are seeing that suppliers for outsourced items are experiencing availability issues.” Brodzeller also pointed to the shipping delays that are a problem vexing every corner of every industry.
“In response to these challenges,” said Brodzeller, “we have been very proactive with our supplier base and have stayed well ahead of any material delays. Our hot runner components primarily use fixed-size stock, so we looked at previous order history and drastically increased our supply of material on hand. Because we started this process early – in the second quarter of 2020 – we had no impact to our customer lead times.” Like many manufacturers, Mastip has invested in expanding its manufacturing capability to minimize outsourcing, thereby reducing dependence on suppliers that may be impacted by future supply chain dilemmas and reducing the associated shipping issues. “In addition,” said Brodzeller, “we have evaluated our entire supply chain and made sure we have ‘depth on our bench’ for reliable second- and third-source solutions if needed. To combat shipping delays, we have worked to improve our lead times to offset any slowdowns.”
At Swiss Steel, Andrew Davis sees an entire supply chain affected by the pandemic and a slew of other factors. “The pandemic’s most visible effect – sidelining so many workers – has a top-to-bottom impact,” said Davis. “Staffing shortages affect not only our suppliers as a steel distributor; the shortages are felt in the logistics companies importing products, among the customs agents who inspect imports, and in the domestic trucking companies that deliver to our warehouse and then outbound to our customers.”
During an ongoing stretch of increased demand for steel, Davis highlighted the logistics challenges. “From the international standpoint,” Davis said, “shipping companies have changed their schedules to accommodate changes in demand, and ocean containers are less available and more expensive.” Davis cited the Suez Canal blockage as one of the impacts in the past year that affected delivery times and container availability, followed by the continuing bottleneck at the ports as everyone tries to get more product through the same number of ports with fewer workers. “The logistics headaches domestically stem from the ongoing truck driver shortage,” said Davis, “and skyrocketing demand for transportation, which has created a trucker’s market. Trucking companies have become more selective in their routings, and we have experienced increased damage to freight and delayed deliveries.”
Swiss Steel has responded by working with its existing carriers to find solutions and by expanding its
transportation carrier base, brainstorming with suppliers and identifying alternate suppliers. “Another thing that we are doing is planning further in advance for our transportation,” said Davis. “That is primarily for our ocean transportation. We know material is going to be available, so we pre-book the container availability so that we can make sure that we have material coming in.”
PartnerShip works with associations such as the American Mold Builders Association (AMBA) to help customers save time and money in all facets of shipping and logistics, including LTL freight, truckload, tradeshow, expedited and small-package shipping. “With the carrier capacity crunch at an all-time high,” said Harry Centa, “it is important for both shippers and third-party logistics providers to take an honest look at their logistics operations. It’s key to conduct audits that evaluate both service level and cost.” Centa advised that smart shippers are strengthening their relationships with existing freight carriers and exploring alternatives to supplement their current coverage. “It’s critical to build time and flexibility into one’s shipping operations,” Centa said, “allowing for a cushion in the shipping budget, while looking critically at where adjustments can be made to offset overspending.”
PartnerShip is responding to today’s challenges by offering a variety of customized shipping solutions. Allowing PartnerShip to help AMBA members spend less on their shipping, regardless of whether it is a pallet or a package. “Through exclusive FedEx discounts available through their AMBA membership,” said Centa, “members pay less for the service they rely on for their small package shipping. PartnerShip helps members access better freight rates as well, by leveraging the relationships we have
with our trusted freight carriers and passing on those savings.” Having more options available equates to increased opportunities to get shipments covered, at an affordable price.
Predicting the future
Brodzeller can’t predict the future, but the need to shift based on conditions still exists. “The supply chain situation has been ever evolving,” said Brodzeller. “We will continue to monitor the developments and adjust
as needed.”
Centa anticipated that the future will remain rocky, making the present a good time to optimize shipping and logistics. “At this time, it looks as if the carrier capacity crunch will be an ongoing challenge for shippers,” said Centa. “Carriers now have the right to be picky, and prices may continue to rise as the crunch continues.” He advised that though there are fewer available trucks, there are steps that businesses can take to lessen the impact of the crisis.
“Working with a logistics provider,” he said, “can expand a company’s current network of carriers. Access to exclusive discounts available through the AMBA Shipping Program also can help members spend less on small package shipping, allowing some breathing room for freight volatility.” The freight experts at PartnerShip also can identify areas where overspending is taking place, such as with accessorials or other unexpected fees. “As supply and demand continue to shift,” said Centa, “it is extra important to have a team of experts available to properly plan a company’s logistics strategy.”
When asked about his prediction for the future of the steel and mold building supply chain, Davis was hopeful. “We are optimistic that there will be improvements,” he said. And the timeline for those improvements? “That continues to be the tricky part,” he added.
Even as the crystal ball remains cloudy, the mold builders that position themselves to expect the unexpected and equip themselves to adapt nimbly will have a stronger hand in how their futures play out.
