The Microchip Supply Shortage: Understanding the Bus Production Crisis
Bus fleet owners are among the many groups of people affected by the chip supply shortage. The current production crisis is caused by multiple problems at different stages of the global supply chain, which we discuss below.
THE PROBLEMS WITH MANUFACTURING
A LACK OF NEEDED RESOURCES
Bus manufacturing begins with the parts and raw materials.
Unfortunately, these are both in short supply. Crucial bus parts (such as microchips) and raw materials (such as steel) currently have limited availability.
At the same time, these bus parts and materials are in high demand. This combination leads to increased bus costs and increased lead time for getting a specific bus model.
A REDUCTION OF FACTORY OUTPUT
Even when bus manufacturing facilities get the needed parts and materials, there is still an issue. Factory output is lower than usual.
For reference, factory output throughout Asia is about half of what it was before the pandemic.
This leads to a slow down in bus production, which increases the time it takes to get finished vehicles to the dealership.
THE PROBLEMS WITH SHIPPING
It’s estimated that around 90% of the world’s goods are shipped by sea. About 60% of those goods are shipped in large steel containers. There are a few key problems currently at play in the shipping process.
GETTING CARGO TO THE VARIOUS PORTS
Truckers play a key role in transporting cargo to and from the shipping ports.
However, there is a shortage of commercial trucks available to get the job done. This is partly due to issues related to the shortage of available chassis, which is an important part of the vehicle. There is an overall shortage of parts and raw materials that plagues production, but there are also other contributing factors.
Over the years, the chassis market has faced consistent systemic issues. Then, recent tariffs placed on Chinese-made chassis lead to a further shortage of this important equipment.
In other words, truckers are having a hard time accessing the vehicles they need in order to do their job. There is also an overall shortage of commercial truck drivers, which further creates issues in the movement of freight.
TRANSPORTING CARGO SECURELY
There is also a global shortage of containers needed to transport cargo.
Increased demand and a lack of labor lead to these crates piling up at ports. This leads to a lack of physical space for truckers to deliver their cargo and return empty containers, which further exacerbates the issue.
There is also a bottleneck happening at warehouses. There is a shortage of warehouse workers, which slows down the facility’s efficiency. There is also a shortage of warehouse equipment that’s used to get the cargo onto the next step of the supply chain.
This leads to warehouses being at full capacity, but with limited ability to offload the cargo being stored.
We hope this article sheds some light on the current bus production crisis! Creative Bus Sales is the nation’s largest bus dealer and we do have a range of buses for sale. Check out the models online or at our dealerships. We proudly serve those throughout the United States.