Supply Chain Update

March 22, 2021

 

The supply chain crisis is deepening quickly. Please read this entire message. 

 

A Summary Explanation 

 

Severe congestion at US ports is causing ship and container availability issues. Many ships are waiting weeks to be unloaded. Shipping companies are passing on their increased costs and sharply raising pricing on the scarcely available containers for new shipments. High demand due to low interest rates, loosening of Covid-19 restrictions, increased fuel costs, and Texas' weather event are contributing to this perfect storm. The result is a scarcity of raw materials and critical appliance components. 

 

The appliance industry as a whole will be further paring down model availability. Simply put, they can only manufacture models for which they have ALL parts. Manufacturer's will also be emphasizing models that generate the highest revenue. Apartment grade appliances will be in even shorter supply.  

 

Furthermore, room air conditioner availability will be inadequate to meet demand. Arrival of supplyhas been delayed. 

 

What Factories are Telling Us 

 

Availability will get far worse before it gets better. Expectations are that when the US population begins traveling again, demand for appliances will wane. This is expected to occur in the 3rd quarter of 2021. 

 

Information on model availability will change frequently. 14 to 17-cubic foot refrigerators will be in scant supply (if at all). It may be necessary to modify kitchens to accommodate a larger refrigerator. 

 

Manufacturer's will also be allocating product to existing customers based on speed to pay, cost to serve, and readiness to receive. Manufacturer's will be breaking price guarantees where necessary. We will also be applying similar logic to how MHD allocates appliances and handles pricing. 

 

Our Recommendations: 

 

  1. Hold onto all functioning appliances and remove usable parts from non-functioning ones 
  1. Increase stock on commonly replaced appliance parts 
  1. Get appliance repair training for staff 
  1. Place orders as far in advance as possible, be ready to take the delivery on the dates you've provided, and be open to available options (color, brand, features) that may be priced differently. 
  1. Store more spare appliances on site 
  1. Keep your account current. Our system will not allocate to orders with an overdue status. Please contact our credit department if you have concerns. 
  1. If you need to modify to refrigerator space, please call your TSM 

 

We appreciate your business and genuinely thank you for working with us to be your Multi-Family solution in 2021.   

 

Sincerely, 

Matt Bell 

Vice President