Service Dealer caught up with a panel of senior representatives of manufacturers, suppliers and trade associations yesterday via a video conferencing call.
Having not held one of these for a couple of months or so, it was a fantastic opportunity for the magazine to take the temperature and see what's currently top of the agenda for this side of the industry.
Omicron
Unsurprisingly, coming just a few hours after Plan B was announced by government, Omicron and the ongoing effects of the pandemic were at forefront of the conversation.
Having not had much time to process the guidance issued only the night before, it seemed everyone was getting a grasp of what obligations their companies were required to meet once again. Clearly working from home would be applied where it could. Some said following the last time this was mandated, they had begun to bring back office-based staff for a few days per-week perhaps. But obviously this would have to change again.
Christmas parties (with or without wine and cheese) were also discussed. It sounded like some had already taken decisions to scale these back or postpone to the spring anyway.
Effect on supply
The larger concern with Omicron however, was what it would do to an already difficult and challenging supply situation. 'Adding fuel to the fire' was how one manufacturer put it!
As everyone reading this today will know, the situation with supply is still incredibly hard and frustrating. The phrase 'just when we thought it couldn't get any worse, it did', was repeated by a couple of suppliers yesterday.
What the main problem still appears to be is with carriage and logistics. The consensus was that actual manufacturing of products around the world isn't terrible - there are issues with certain components obviously - but on the whole it's not too bad. It's very much the shipping and delivery of these machines that's the real issue.
At the moment for example we heard there's a problem with the reluctance of European drivers to bring trucks into the UK for fear of being stuck here like many were last Christmas. 'Danger money' is almost having to be paid to these workers apparently. Also container ships don't want to dock in the UK, so stock is off-loaded in Zeebrugge or Rotterdam - and then put on smaller ships or trucks to make its way to us. All at escalating costs and delays.
Rising prices
These price rises faced by suppliers, as everyone will know, are having to be passed on to dealers and ultimately customers. There was a discussion around at what point will the customer refuse to tolerate any further price increases? A difficult one to judge, but it was felt that purchases in our sector are at least necessary rather than aspirational. Higher prices will just need to be accepted by consumers it was said.
Of course higher prices are somewhat arbitrary, if the goods aren't there for the dealer to physically sell to the customer. Concern was expressed for the dealer network, with an acknowledgement that some dealers will be suffering from cash-flow problems as a result of lack of supply. Working closely with their industry partners was a sentiment shared by many.
A further concern we heard yesterday, was more long-term. This was the worry that the huge numbers of orders currently in the system for new machinery, could be somewhat illusory. The notion of 'sandbagging', which has been mentioned previously on our calls, seems to be in the minds of several manufacturers. At the moment whilst stock is scarce, huge orders are being put in, just in the hope of obtaining anything. When supply catches up with demand, the fear is it will utterly outstrip it, leading to a surplus of machinery that no one wants. We are of course a long way off this. Certainly it was felt this won't happen in 2022, but maybe by 2023 it was felt?
Trade shows under threat?
Returning to the immediate effects of Omicron, there were worries voiced over the viability of January's UK trade shows - specifically LAMMA and BTME. There were real doubts amongst the potential exhibitors we spoke to, that these events will be able to go ahead as planned. Similar fears were raised over the huge Agritechnica show, scheduled for Hannover in February - for which it appears that an official announcement is imminent.
Again, as was said before when the threat of the virus was hanging over industry events, a show full of restrictions, distancing and genuine health risks to staff and visitors isn't appealing. Many felt they would rather a show didn't take place at all, than run under those conditions. It seemed people now had their eyes and ears open for any potential cancellation announcements.
SALTEX though, which had of course managed to take place in November, was praised by those who had attended. It sounded like the decent attendance that show had gained, had taken a few by pleasant surprise. Also commented upon was the level of battery machinery showcased at the NEC.
An interesting discussion was generated around whether this really could be an indication of the end of the petrol engine in the outdoor powered equipment sector. The feeling seemed to be that whilst battery would clearly become ever more ubiquitous for smaller kit, for larger machines and especially ag equipment, different alternative fuels would need to be found. Hydrogen was mentioned several times in this regard.
Once again, calls such as this, and the ones we hold regularly with a dealer panel, are incredibly important for a journal such as ours. As such, we once again thank those who took part for their generous donation of time and for their candour in sharing their thoughts with us.
