Ehren-HausHow many of you have lived the following scenario: Your manufacturer has informed you that the lead time for the plastic needed to fabricate your parts has been extended yet again. This has happened so many times in the past year, you've lost count. You wonder, ‘why does plastic seem to be so hard to get in a timely manner?
Below we will lay out the progression of events that has led to the world experiencing plastic shortages. Even though life is returning to normal in the United States, this current dearth is likely to continue to affect you in many ways.
You might remember the product shortages during the COVID-19 pandemic. Plastic manufacturers were also impacted by shutdowns and supply scarcity. Fewer truck drivers and port workers were available. Lockdowns and workplace safety precautions meant labor availability was down. The pandemic created a ripple effect on the supply chain that we are still feeling today.
We all knew that hospitals and medical facilities were the biggest consumers of personal protective equipment (PPE) for the obvious reasons. However, more industries and even the average consumer themselves needed PPE in order to operate. More industries needed plastic to protect food, clothing, and other products. Demand for plastics soared, while supply chains withered.
In addition to these challenges, an active hurricane season in 2020 forced many manufacturers along the Gulf Coast to shut down. Then in February 2021, a winter storm paralyzed that very same geographic region. Manufacturers were forced to shut down again and demand for energy increased. Some facilities sustained damage from the storm, further delaying production.
Then to top it all off a month later, the Suez Canal was blocked. Disrupting worldwide supply chains in its own unique way.
All of these events happening in such a short time has led to a significant shortage of plastics, among other raw materials. Coupled with increased trade in Asia and a short term lack of shipping containers, it is as if there’s a perfect storm brewing for a long-term shortage.
There is tremendous demand for plastics fabrication and yet so little supply. Some experts estimate it could be another year before the plastic shortage ends.
With the passing of the panic driven interest and the need for clear barriers such as sneeze guards, dividers and other containment devices, clear materials are becoming more available.
The lead times for clear materials i.e., acrylic, (Lucite, Plexiglas) polycarbonate and PETG of the past few months have greatly improved from the average highs of 16 to 20 weeks. Now most clear materials can be found – readily available or within 3 to 4 weeks.
Although lead times have decreased for clear plastics, they still remain high for many of the other plastic types. All PVC’s and their derivatives such as ABS, Styrene’s, HDPE’s, and even phenolics, are experiencing chemical and resin shortages as well as strict allocations to producers. Lead times for some materials can reach up to 22 weeks!
Because of the variability in production and tight controls on distribution, the cost of manufacture remains a tricky issue. For example, pricing of sheet goods may be determined on the actual ship day, not at the time the order is placed. This becomes a bit of a conundrum for establishing pricing for finished, fabricated and formed parts. Purchase orders issued for most of these sheet goods are subject to and can expect to have price increases up until shipment. Even if you stick to a material with relatively stable lead times, you still might encounter unpredictable price fluctuations.
To complicate things further still, the scarcity of chemicals also means that plastic products have fewer options for customization. Essentially, we are back to the basics - black, white, and clear are the only colors available with reasonable lead times. Any sort of color is extremely difficult to come by. You can still add color through printing or other post-production processes, but that will add both time and costs to production. Essentially, creativity for any plastic fabrication products is limited to design for the time being.
The plastic shortage may be cause concern for product manufacturers for the time being. Ehren-Haus has consistently stayed ahead of the game in terms of supply chain forecasting and plastics overall. We can help you navigate through this shortage and help you continue providing quality products. Contact us today and let us help you find the right solution for your plastic needs.
