HVAC contractors are being advised to expect delays and price increases over the coming months as the supply chain is faced with a perfect storm of factors here and overseas.
Raw material cost increases, container availability, shipping transit times, reduction in air freight, and demand from international markets are just some of the issues cited by manufacturers and suppliers who participated in a recent roundtable organised by the Air Conditioning Mechanical Contractors Association of Australia (AMCA).
Lockdowns, labour supply issues, and stricter safety protocols are all contributing to production slowdowns in major supplier markets, including China, Europe, and North America.
Delays in intermediate goods—especially electrical componentry such as semiconductors and integrated circuit boards—have also contributed to the problem.
Some manufacturers are experiencing delays of six months or more.
But supply issues and cost pressures extend beyond the point of manufacture. The slowdown in aviation has significantly reduced air freight capacity, while the lack of shipping container capacity has impacted all industries resulting in a five-fold price increase since the beginning of the year alone.
AMCA members claim brokers and logistics companies are no longer honouring longstanding commitments.
Even when container capacity can be secured, suppliers are seeing significant delays in transit times regardless of the country of origin or the shipping routes taken.
Congestion issues and transit times are being further compounded by the onset of skill shortages.
For example, a shortage of dockworkers has led to delays in offloading from ships while skills are also in short supply within local warehouses and manufacturing facilities, ranging from mechanical assembly workers to forklift drivers.
To counter supply issues, many companies are trying to carry more inventory while placing orders well in advance of normal timeframes.
Compounding matters further are sharp, double-digit increases in the prices for raw materials such as aluminium, copper, and stainless steel.
While price increases are problematic, several roundtable participants cited the speed and unpredictability of the changes as their biggest challenge.