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Why Is There A Shortage Of Garbage Trucks?

Throughout the Pandemic and the upheaval that it has caused within our economy, there has been a major shortage of new trucks on the market. Since truck manufacturers shut down their factories early in the pandemic, there haven’t been very many new trucks manufactured in the last year. While many businesses are in need of fleet upgrades in order to bid on new jobs or retire older trucks, the manufacturers aren’t able to meet the demand. Here are some of the recent events that led to lower numbers of truck production.

Microchip Processor Shortage

One of the contributing factors to the truck shortage, and an issue across other industries as well, is the shortage of computer processing chips. There are a few factors that have played into the chip shortage. First and most obviously, the pandemic. Factories in Asia, where the majority of these chips are manufactured, were forced to shut down early last year. Once factories were opened again, there was no way for them to catch up with the increasing demand from the consumers as everyone was stuck at home and using more electronic devices. As many auto factories were still closed, chip manufacturers flipped their production lines to begin to push out more computer chips because they were in high demand and could generate a higher profit margin. This would help the manufacturer make up profits lost during factory shutdowns. However, when auto factories opened back up sooner than anticipated, they were met with a shortage of the type of chips required for their new automobiles. Since then, many auto factories have had to shut down due to the shortage of chips needed to finish manufacturing vehicles. Chip production was further hindered by the blockage of the Suez Canal, which kept a tight hold on many chips from making their way from Asia to Europe. While chip and auto manufacturers alike are trying to find a solution to these shortages, some analysts believe this drought could last over a year. 

Steel Pricing and Shortage

Another contributing factor to the delay in production is the shortage of U.S. steel. The steel shortage is also causing prices to surge for the limited supply available. Many domestic steel mills slowed production last year during the pandemic because of the uneasy economic landscape. Once back up and running, these steel manufacturers were forced to try and ramp up production in order to meet demand. With iron ore and scrap prices also rising, they had the choice to either eat the 150% cost increase or raise their prices as well. These prices are too high of a cost for auto manufacturers, but buying foreign steel isn’t an ideal option either due to foreign commerce restrictions. Even with the restrictions, foreign steel is still cheaper than domestic. With the low overseas steel supply coupled with a shortage in shipping containers, foreign steel imports have been kept at bay. As foreign commerce restrictions are being reviewed, there is no guarantee that this restriction will stay in place. For this reason, many manufacturers don’t want to overproduce and be left with a surplus of product, requiring a sell-off below market value.

A major loss of production time, pandemic-induced economic uncertainty, and material shortages have collectively caused this issue for suppliers and manufacturers. This also leads to the price increases as the world goes back to “normal”, but manufacturers haven’t caught back up. There is no timeline for when these shortages will be over or when manufacturing will go back to normal. 

BTR is Here For You

In these uncertain times, Big Truck Rental is here for your business. We can provide quick solutions for your fleet with a long or short-term lease. Big Truck Rental has garbage trucks available for rent or purchase from our sister company, Route Ready, in as little as 3 days. 

Contact us here to learn more about how Big Truck Rental can aid your business today.

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