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Marketers must keep an eye on the supply chain

June 24, 2021 By    

The pandemic has forced industries and their respective businesses to adapt, plan for change and look ahead to life after the health crisis.

Crane truck photo by LP Gas staff

Propane marketer demand for trucks remains strong, but pandemic-related shortages are driving up costs. Photo by LP Gas staff

As the world transitions out of lockdowns and consumer and commercial activity tick upward, propane marketers – deemed essential by the federal government during the pandemic – will evaluate their capital equipment needs and their ability to satisfy customer needs.

Propane marketer demand for buying trucks appears strong. An overwhelming majority of companies participating in LP Gas’ annual Top Propane Retailers survey in late 2020 said they planned to buy trucks in 2021. Marketers shared a mix of truck types that interested them – bobtails, service trucks, crane trucks, transports and pickups. Several also specified a desire to fuel their vehicles with propane autogas.

“We will be looking to purchase six-wheeler bobtails, and the most notable factor will be cost,” one marketer shares in the survey.

Another says he’s seeking a “large-capacity bobtail for increased delivery range.”

Yet another has plans to upgrade vehicles due to their age, as well as for new growth and market-expansion initiatives.

But just as propane marketers shift their attention inward, other challenges have emerged in the trucking segment worthy of their attention. A global semiconductor shortage is impacting automotive industries, including the medium and heavy commercial vehicle sector.

“The biggest obstacle we are facing this year is a big short supply of trucks due to the semiconductor shortage. All vehicle manufacturers are facing a huge shortage of these chips,” says John Hawkins, CEO of H&H Sales Co. “Also, the huge increases in material costs this spring. It has been absolutely crazy trying to keep up with the increased costs.”

Hawkins says propane marketer inquiries remain strong but that buyers should expect increased costs and lead times for trucks due to the computer chip shortage and increased raw material costs.

The pandemic reportedly has obstructed the supply-and-demand chain and the labor force across industries, leading to the short supply and high costs for many products.

IHS Markit says the medium and heavy commercial vehicle manufacturers have the potential to recover part of the lost volume in the second half of this year, but the effects could also linger into 2022. Overall, it adds, the constraints are worse in the light vehicle business.

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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