Death, Taxes . . . and Price Increases

Tire Business magazine got it right — For 2021, tire price increases joined death and taxes as things one couldn’t avoid! Unfortunately, 2022 (at least the first half) looks like more of the same.

The steady stream of price increases from tire makers large and small in 2021 — in a few cases, five or more times in a 12-month period — was unprecedented, according to Tire Business.

According to pricing changes tracked by Tire Business, wholesale prices in some cases were 40% higher than they were in early January, depending on brand.

Increases throughout the year tended to be in the 8% to 10% range. At CMA/Double Coin, we’ve tried our best to mitigate operational costs and have absorbed considerable hits to our bottom line, but we, too, have had to raise prices to our customers.

Containers!

The rate for a single shipping container has skyrocketed over the last 18 months as the coronavirus pandemic disrupted supply chains and trade channels. Routes have seen costs rise by seven times, if not more.

To make matters worse, more than 600 container ships were stuck recently outside ports worldwide, twice the level at the start of 2021. Take an aerial view of the Los Angeles and Long Beach ports and you will see a good many of them.

Drayage!!

Everyone’s talking about the ocean shipping woes, but drayage costs have also skyrocketed. Moving the shipping containers from a port to a train or warehouse, or from a train or warehouse to a port, has never been more expensive. Supply chain disruptions and covid pandemic resurgences are pushing drayage fees at the nation’s maritime ports to new highs as shippers continue to see long delays and expensive rates to move their freight.

According to industry experts, the national drayage spot rate was 6% more this fall than the previous fall and 32% more than fall 2020. These drayage pain points are not expected to resolve anytime soon.

We’re On It!

At CMA/Double Coin, we are addressing these supply chain disruptions/costs on multiple fronts – from working closely with all our logistics partners —  to adding staff in our warehouse network, which includes our new state-of-the-art center in Houston, as well as facilities in California and Tennessee. In short, we are working extremely hard to get tires into the US and then distributed efficiently to our customers.

We are all in this together, and we are committed to maintaining open and consistent communications with our loyal customers.

We thank all of our customers for their continued loyalty to Double Coin. Better days are ahead!

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