Disruptions Continue to Hamper Supply Chain Logistics

During the best of times, the logistics necessary to keep the automotive supply chain in sync is nothing short of remarkable. The OEMs produce a consistent supply of vehicles that flow seamlessly into shipping systems, arriving at upfitters who transform these vehicles into sophisticated vocational tools, and then they’re delivered to fleet operators across North America who are ready to put them into service. This seamless coordination between various stakeholders throughout the supply chain is truly impressive.

Occasionally, there may be a slight detour or minor delay but typically, it is relatively easy to course-correct and get back on track. But what happens when virtually the entire supply chain is severely disrupted? Unfortunately, this is the nightmare scenario many fleet operators are now faced with as unprecedented supply constraints wreak havoc across the entire automotive industry.

Recently, ARI’s Ted Davis discussed the numerous factors influencing order-to-delivery (OTD) times when he spoke with Automotive Fleet for the publication’s annual OTD special report. In the series of articles, Ted shared his perspective on the variety of challenges that are currently hampering the supply chain, offered his insight as to when these disruptions may subside, and provided some advice to help you minimize the impact of these ongoing supply constraints.

Ted notes that while the microchip shortage is having a profound impact on the OEMs’ ability to manufacturer vehicles, there are also other factors contributing to unprecedented order-to-delivery times.

“Without question, the pandemic has affected how most dealerships now operate with many still working to navigate local regulation and staffing issues that continue to hamper efficiency. Further compounding this issue are lengthy processing times for licensing and compliance work, which is often completed by the delivering dealer or driveaway company. In many cases, the root cause of these delays is attributed to reduced access to state and local regulatory agencies.”

Ted also highlights how these disruptions are impacting the upfitting segment of the industry where upfitters are working to navigate limited chassis availability as well as component shortages and price increases.

“The 2021 model-year has been difficult for fleet upfitters who are contending with inconsistent chassis deliveries from the OEMs, backordered parts, widespread labor shortage, constraints on ordering pre-fabricated parts, and increasing prices related to raw materials.”

To read the entire special report, please visit Automotive-Fleet.com. To receive important industry updates sent directly to your inbox to help you navigate the continued supply chain disruptions as well as other thought-provoking content, be sure to subscribe to our Morning Brake newsletter.