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By APF
The financial impact of a strike may reach as high as $5 billion daily, as estimated by JPMorgan Chase, potentially disrupting the supply chain for a wide range of products, including automobiles and cardboard. Consider a large cargo vessel laden with automotive components such as alternators, radiators, and batteries.
The East Coast of the United States is home to some of the busiest and most vital ports in the country. Major ports like those in New York, New Jersey, and Savannah play critical roles in international trade, acting as gateways for goods, including auto parts, flowing between the U.S. and global markets. In the event of a strike at these ports, the entire supply chain for industries dependent on imports and exports—especially the automotive industry—can be severely disrupted.
1. Disruption of Supply Chains
The auto industry is highly dependent on just-in-time (JIT) manufacturing. Auto parts are often sourced from multiple countries, and timely delivery is crucial to ensure assembly lines are running smoothly. A strike at East Coast ports can cause significant delays in the importation of essential components, such as engines, transmissions, and electronic parts.
Many car manufacturers and suppliers utilize East Coast ports to transport components from Europe, Asia, and Latin America. A strike could create bottlenecks, leading to a backlog of containers waiting to be unloaded, processed, or shipped to distribution centers. The longer the strike, the more the backlog grows, making it even more challenging for manufacturers to receive the necessary parts on time.
2. Increased Costs for Manufacturers
When auto parts can't be delivered due to port strikes, manufacturers may need to resort to costly alternatives to meet their needs. These alternatives might include:
Air Freight: Transporting parts by air is much faster than shipping via sea, but it's also significantly more expensive. For parts that are urgently needed to avoid assembly line shutdowns, manufacturers may opt to pay the premium, which can erode profit margins.
Diversion to Other Ports: During a strike, companies might attempt to reroute shipments to alternative ports, such as those on the Gulf Coast or the West Coast. However, this introduces additional transportation costs, delays, and logistical challenges.
These increased costs ultimately get passed down the supply chain, affecting everyone from manufacturers to end consumers.
3. Production Delays and Shutdowns
A prolonged port strike could cause automakers to slow or halt production entirely if they can’t source the necessary parts. For an industry reliant on smooth operations and just-in-time inventory, even a short-term disruption can have ripple effects across the entire production line. Automakers are often forced to make difficult decisions about which vehicles to prioritize for production and may shift their focus to models that require fewer or more readily available components.
For suppliers, the strike could also result in inventory shortages, creating a domino effect in which downstream production is halted or delayed. This can lead to shortages of vehicles available for sale, which could push up prices for both new and used vehicles.
4. Impact on Retailers and Consumers
Retailers and consumers will also feel the effects of a port strike. As auto parts become scarcer and production slows, dealers may have less inventory to offer customers. Consumers looking for specific car models or parts for repairs and maintenance could face long wait times.
Furthermore, the increased transportation costs, higher prices of parts, and potential tariffs (if auto parts need to be sourced from more expensive regions due to the strike) may lead to price hikes for both new vehicles and aftermarket parts. Repair shops could pass these higher costs on to customers, increasing the overall cost of vehicle ownership.
5. Broader Economic Impacts
The automotive industry is a significant driver of the U.S. economy, contributing billions in revenue and employing millions of people. A port strike on the East Coast could lead to layoffs or reduced hours for workers in manufacturing plants, transportation, and logistics. This ripple effect can harm local economies, especially in areas dependent on the auto industry.
Moreover, as car production and sales slow down, other industries linked to the automotive sector, such as steel, electronics, and chemicals, may also experience reduced demand, leading to further economic strain.
6. Mitigation Strategies for the Future
To mitigate the effects of potential port strikes, many companies in the auto industry have begun to explore alternative solutions. These strategies include:
Diversifying Ports: Relying on a single port or region for auto parts can leave manufacturers vulnerable to strikes or other disruptions. By diversifying their port usage—utilizing West Coast or Gulf Coast ports—manufacturers can reduce the risk of total supply chain stoppages.
Strategic Stockpiling: Some manufacturers are considering stockpiling critical parts to ensure they have a buffer during times of disruption. While this is counter to the just-in-time philosophy, it can provide some security against short-term disruptions like strikes.
Strengthening Domestic Supply Chains: The COVID-19 pandemic, combined with other global trade disruptions, has led many manufacturers to rethink their dependence on global supply chains. Investing in domestic production of key auto parts could reduce reliance on international shipments and lessen the impact of future port strikes.
Conclusion
An East Coast port strike can have a far-reaching impact on the auto parts industry, causing supply chain disruptions, increased costs, production delays, and higher prices for consumers. The extent of the damage depends on the duration of the strike and the preparedness of manufacturers and suppliers. However, by implementing diversification strategies and strengthening supply chains, the auto industry can mitigate some of the risks associated with such events in the future.
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By Counterman
link hidden, please login to view and link hidden, please login to view & link hidden, please login to view jointly announced a nationwide expansion of their partnership. As a result of this new affiliation, all Idemitsu IFG series engine oils, transmission fluids, and power steering fluids are now available through XL Parts and The Parts House direct-to-the-professional locations. “We are very excited to expand our distribution network through our partnership with XL Parts and The Parts House to service automotive aftermarket professionals located across the Gulf Coast to the Southeast US Region,” says Frank Lam, Idemitsu senior division manager for the aftermarket. “This partnership will make our engine oils and transmission fluids more accessible to customers who are looking for premium OE-quality lubricants that meet the stringent standards of Japanese Automotive OEMs.”
link hidden, please login to view supplies OE-specific automatic (ATF) and continuously variable (CVTF) transmission fluids to Japanese automakers, such as Toyota, Lexus, Honda, Acura, Nissan, Mitsubishi, Subaru and Mazda. The post
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By Counterman
link hidden, please login to view announced the launch of 22 new products in North America. The new part numbers include complete strut assemblies and shock absorbers, representing over 5 million vehicles in new coverage. The launches include coverage for important models in the national vehicle car parc, such as Jeep Compass, Toyota Highlander and BMW X-3, in addition to brand new applications including the Chrysler Pacifica 2023, and the Kia Forte GT 2023, among others,
link hidden, please login to view said. “By prioritizing innovation and cutting-edge solutions at our factories, we consistently develop new products for the aftermarket, utilizing the same quality components as we provide to the OE market. These recent additions not only expand our product range but also reinforce our presence in North America. The new items are in stock and ready to ship!” said Bruno Bello, director of global marketing at PRT.
For more information, call 1-770-238-1611 or visit www.prtautoparts.com, or follow @prtautoparts.
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By Counterman
You can get pretty much anything delivered if you want it badly enough. In the parts business, we’ve been doing it for decades, but delivery on demand has crept its way back into grocery and prepared foods, hardware, and many other industries. It’s not a new concept, only more efficient and widespread than it was at the turn of the 20th century, and even the 21st!
Instacart and other grocery services may seem like a modern marvel, but most grocery stores during the first half of the 20th century offered delivery, as did the local pharmacy, dairy, and a host of other businesses. The rise of suburbia (and the supermarket) after WWII threw a curveball into that business model as people became more mobile and spread out from urban centers.
Pizza delivery, especially the Domino’s “30 minutes or less” guarantee, has had a drastic effect on our own delivery operations. For traffic safety reasons, Domino’s no longer guarantees half-hour delivery, but the effectiveness of their advertising campaign still resonates with the public some 30 years later. At the parts counter, as well as with food delivery services like Doordash and GrubHub, there’s still an unspoken expectation that our items will be arriving at fixed intervals after the order is placed.
Fortunately, we don’t deal in perishable merchandise, so a delayed delivery doesn’t ruin the product. That doesn’t stop the phone from ringing off the hook with the dreaded “where’s my stuff?” calls, so we still need to keep up our pace to serve our commercial clientele. As soon as the call ends, or the online order is sent, we are “on the clock,” even if it is only the customer’s internal clock.
Auto parts deliveries generally fall into two categories; “hot shot” and “routed.” Dispatching these orders and staffing a delivery team depends greatly on your market, geography, and each customer’s expectations. If you recall the fable of the tortoise and the hare, the moral of the story was that “slow and steady wins the race.” Routed deliveries are the tortoise, quietly making steady progress in a direct path that ultimately got him to the finish line. The post office, UPS and Amazon all successfully make use of delivery routes. You can generally count on regular deliveries from each of these providers within a specific daily window, and most recipients are content to schedule work around these time slots. Stock orders, parts ordered in advance of a scheduled appointment, and customers at the edge of our service areas are prime candidates for route delivery. For emergency orders, vehicles tying up a lift, and those instances where we have to correct previous cataloguing, picking or delivery mistakes, we must rely on the hot shot delivery.
The hare in our fable is a “hot shot” in many ways, sprinting here and there at a frenetic pace, expending considerable energy and even showing off a little for the crowd. Hot shot deliveries showcase our store’s commitment to serving our customer’s needs, but it can be physically, emotionally and financially draining. No wonder the hare decided to catch a quick nap! It’s easy to get caught up in the moment when it comes to hot shot delivery. If a “top 20” customer asks (or demands) us to drop everything and run, the first instinct for many is to dispatch the part with the first available delivery driver. This can quickly spiral into a shortage of available drivers (or even counter staff) as they scatter to the four winds, each with a single item or order. The problem is only compounded when multiple drivers are dispatched to the same general area, or, in some cases, the same customer! We need to coordinate the chaos to give our customers the best service possible.
For those stores with a dedicated outside salesperson, their daily or weekly sales routes are an established roadmap that can be used as a template for routed delivery. While a salesperson might spend all day maintaining relationships and making sales along a particular route, delivery personnel need only a fraction of that time to cover the same mileage and drop off the requested parts and supplies. Scheduled delivery twice or even three times a day is a real possibility in many markets, with a minimum of vehicles and drivers on the road at any given time. We can also maximize the profitability of route delivery by calling customers along the intended route ahead of time to identify any “last minute” needs before the driver even starts their engine.
Driver scheduling and dispatch requires a balance of “speedy” and “steady” to coordinate the chaos inherent in a successful store operation. Everyone admires the speed and agility of the running rabbit, but sometimes we also need a herd of turtles to get the job done. Knowing how to use both types of delivery effectively maximizes productivity and profits!
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By Counterman
You can get pretty much anything delivered if you want it badly enough. In the parts business, we’ve been doing it for decades, but delivery on demand has crept its way back into grocery and prepared foods, hardware, and many other industries. It’s not a new concept, only more efficient and widespread than it was at the turn of the 20th century, and even the 21st!
Instacart and other grocery services may seem like a modern marvel, but most grocery stores during the first half of the 20th century offered delivery, as did the local pharmacy, dairy, and a host of other businesses. The rise of suburbia (and the supermarket) after WWII threw a curveball into that business model as people became more mobile and spread out from urban centers.
Pizza delivery, especially the Domino’s “30 minutes or less” guarantee, has had a drastic effect on our own delivery operations. For traffic safety reasons, Domino’s no longer guarantees half-hour delivery, but the effectiveness of their advertising campaign still resonates with the public some 30 years later. At the parts counter, as well as with food delivery services like Doordash and GrubHub, there’s still an unspoken expectation that our items will be arriving at fixed intervals after the order is placed.
Fortunately, we don’t deal in perishable merchandise, so a delayed delivery doesn’t ruin the product. That doesn’t stop the phone from ringing off the hook with the dreaded “where’s my stuff?” calls, so we still need to keep up our pace to serve our commercial clientele. As soon as the call ends, or the online order is sent, we are “on the clock,” even if it is only the customer’s internal clock.
Auto parts deliveries generally fall into two categories; “hot shot” and “routed.” Dispatching these orders and staffing a delivery team depends greatly on your market, geography, and each customer’s expectations. If you recall the fable of the tortoise and the hare, the moral of the story was that “slow and steady wins the race.” Routed deliveries are the tortoise, quietly making steady progress in a direct path that ultimately got him to the finish line. The post office, UPS and Amazon all successfully make use of delivery routes. You can generally count on regular deliveries from each of these providers within a specific daily window, and most recipients are content to schedule work around these time slots. Stock orders, parts ordered in advance of a scheduled appointment, and customers at the edge of our service areas are prime candidates for route delivery. For emergency orders, vehicles tying up a lift, and those instances where we have to correct previous cataloguing, picking or delivery mistakes, we must rely on the hot shot delivery.
The hare in our fable is a “hot shot” in many ways, sprinting here and there at a frenetic pace, expending considerable energy and even showing off a little for the crowd. Hot shot deliveries showcase our store’s commitment to serving our customer’s needs, but it can be physically, emotionally and financially draining. No wonder the hare decided to catch a quick nap! It’s easy to get caught up in the moment when it comes to hot shot delivery. If a “top 20” customer asks (or demands) us to drop everything and run, the first instinct for many is to dispatch the part with the first available delivery driver. This can quickly spiral into a shortage of available drivers (or even counter staff) as they scatter to the four winds, each with a single item or order. The problem is only compounded when multiple drivers are dispatched to the same general area, or, in some cases, the same customer! We need to coordinate the chaos to give our customers the best service possible.
For those stores with a dedicated outside salesperson, their daily or weekly sales routes are an established roadmap that can be used as a template for routed delivery. While a salesperson might spend all day maintaining relationships and making sales along a particular route, delivery personnel need only a fraction of that time to cover the same mileage and drop off the requested parts and supplies. Scheduled delivery twice or even three times a day is a real possibility in many markets, with a minimum of vehicles and drivers on the road at any given time. We can also maximize the profitability of route delivery by calling customers along the intended route ahead of time to identify any “last minute” needs before the driver even starts their engine.
Driver scheduling and dispatch requires a balance of “speedy” and “steady” to coordinate the chaos inherent in a successful store operation. Everyone admires the speed and agility of the running rabbit, but sometimes we also need a herd of turtles to get the job done. Knowing how to use both types of delivery effectively maximizes productivity and profits!
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