The Shipping Crisis: Dealers Fighting Longer Waiting Times And Higher Fees
The shipping crisis is impacting tire dealers across the United States. Darrin Mallet, owner of the Kilgore Tire Center in Kilgore, Texas, says he doesn’t order a lot of containers – “three or four a year, maybe five.” But most of the containers he ordered in the past 12 months have been delayed.
“I had one due at the end of last month and we now have no date” as to its arrival date.
“It could be in three weeks. It could be in another month. We are used to having a steady supply. But it was disturbed.
It is also grappling with escalating freight rates.
“I ordered a container in July of last year and received it in October. All shipping costs have been factored in with the container. The price of the tires basically covered the shipping costs.
“I turned around and ordered another container and received it at the end of February 2021.” It came with an additional $ 1,500.
Mallett was hit with additional surcharges – up to $ 4,000 in a recent case – forcing him to pass the costs on to his customers. “We have to do it,” he said.
Joe Ramsay, president of Pit Stop Auto Repair, a seven-store chain based in Venice, Fla., Said the slowdown in shipments had hit his dealership particularly hard in the past three months.
“Different models and brands come and go,” especially at level four, he explains.
“It’s hit or miss, depending on the size and who has it that day. You get what you can get sometimes.
Price increases from domestic tire manufacturers complicated matters.
“It’s done for a really interesting time in the market,” he says. “’I’ve said to all of my managers,’ Sell what you can get ‘. We have probably been less brand loyal in the past few months than we have ever been in the past.
“I’m not one to fall into the sky, but it’s worrying,” he says.
Steve Paden, owner of Elite Tire & Auto, a one-store dealership in Modesto, Calif., Purchases most of his tires from a wholesale distributor, who contacts overseas manufacturers. “I don’t have practical experience” working directly with factories, he says.
“But what I can talk about is checking inventory for a product that you’ve sold your entire career and all of a sudden that product is no longer available. ”
Most of Paden’s customers opt for cheaper tires.
“And it is the tires that have been the most impacted” by the maritime transport crisis. “They’re drying out.”
Like other dealers, it was forced to pass freight rate increases on to its customers in the form of high retail prices.
“In the last six months we’ve had to increase (prices) by about $ 100 per set of tires, on average. A set that used to cost $ 399 is now (sold) $ 499.
“The thing with that is, you think you’re making more money. But the reality is that you earn the same amount.
The slowdown in shipments is also affecting the largest dealers. Beth Barron, CEO of Morgan City, Louisiana-based Chabill’s Tire Service LLC, which has 18 locations, had ordered medium-truck tires from a foreign supplier.
“We received an email saying, ‘Each container will cost an additional $ 3,000. ”
“I wasn’t surprised because I had heard all the rumors” about freight rate spikes, she said. “But that prevented us from buying this product. It didn’t make sense to take all that inventory when we can buy something from a local wholesaler for about the same price.
Scott Mulvey, owner of Hoffman Automotive Tire Pros, a one-store dealership in Fayetteville, Ga., Says the downturn has spread to ground logistics providers, hurting his business.
Mulvey notes that its primary supplier, American Tire Distributors Inc., has honored deliveries. But he cannot say the same for the outside shipping companies that he has occasionally used.
Justin Hall, service writer at Wilmington Tire & Auto in Wilmington, North Carolina, says “there are shortages in all areas” and it has been more difficult for his dealership to get the product in. his outfit.
“I’m even talking about domestic tires. You are limited in your choice.