Supply Chain Boom – An Overview

Posted in Blog by US Castings

As you may know, inflation has been increasing at a fast rate and hit its highest level this year. This occurrence, as expected, is interconnected with the global supply chain.

Since the beginning of the pandemic, high demand for manufacturing has grown exponentially and companies are still playing catch-up to supply chain problems that began in 2020; all this undeniably contributed to this inflation. We have been experiencing a high increase from raw material, labor, gas, to freight (whether via air or ocean) and other related expenses. A few examples below:

• Surge in fuel prices
• Freight Market: Ocean carriers have announced more blank sailings, and lack of trucking capacity has also been a challenge.
• Russia-Ukraine Conflict: The Russian invasion of Ukraine has caused a huge impact to supply chains as both countries are large suppliers of raw materials such as steel, palladium, nickel, aluminum, copper, etc.
• Inventories are reaching peak levels: This is a consequence of over-ordering, which has caused enormous port congestions.
• China Lockdown and Zero Covid Policy: Shanghai entered into a new lockdown as of late which has in turn limited production at factories. This has left the supply chain disheveled.
• Freight and distribution delays: Please refer to our previous email or to our blog to read more about this.

We know that this affects all of us as a nation. While we always keep our commitment to you as our customer and offer the best prices we can, we must increase our prices in order to continue providing the best service possible. As a reminder, we urge our customers to send us yearly projection orders so we can plan accordingly and secure the best prices, prepare material stock, and so on.

The good news(!) is that experts believe that this price burst will soon subside, as the nation figures out how to produce and transport all products in a pandemic-altered economy. If you prefer to handle the shipment on your own, that it also an option, just let us know.

We thank you for your business and we will continue to keep you informed of any new developments and ensure the most quality service & products for our customers.