As I write this a few days before July, it seems like it has been much longer than just three months ago when I last wrote a quarterly update. Much has happened in the news and COVID is making a swift return just as all of us had hoped it was ending. I ducked into my local pharmacy last week for some last-minute items and there was a line in the back for people getting their vaccinations. The gentleman at the counter said there was renewed interest in vaccinations recently.
I believe transportation will continue to be affected by the virus through the rest of this year. It is also probable that 2022 will continue to see the same effects. I believe at this point current rates will be stable through the end of this year for transportation. We did see rates flatten as of the end of April to the first of May. I keep an eye on lumber pricing since I feel it’s a good predictor of where we are for supply and demand for raw materials overall. I have also been putting off a remodel at our home for our growing family for a while now. When lumber prices fall, we plan to move forward.
I am often asked about diesel prices and the correlation to over-the-road truck rates. My response has always been the same – rates are influenced by supply and demand. Meaning if you own a truck or trucks, you cannot park your rigs just because you do not like the cost of diesel. Through good and bad years, the trucking industry surges forward with owners taking the highs with the lows. A typical owner-operator has a truck payment and insurance payments to contend with every month. Those fixed costs are there no matter the current supply and demand or the current variable cost of diesel. Through the years I have seen drivers struggle through some tough times financially. To see them have upswings seems only fair. In addition, the trucking industry has had an issue with driver recruitment for a long time. The average age for drivers grows higher every year with fewer recruits. We simply live in a time that makes the job not as appealing as it once was. We rely on truck drivers for almost all that we do and products that we need. For that, I take my hat off to them.
We have seen product shortages galore this year. I continue to encourage our customers to complete orders at current pricing since we do not know what the future holds. I still firmly believe that rolling increased costs into current inventory makes the most sense. Demand tends to be the proof that validates higher pricing. When the demand levels off, the current market is telling us what pricing should be for said service or product.
I have continued to look around me these past 15 months wondering what lessons are to be learned in life and in business. I think those lessons will show themselves more in the coming years. However, I can’t help but want to see some of those lessons now and be able to apply them in the present. I am reminded of a Bill Gates quote, “A company’s ability to respond to an unplanned event, good or bad, is a prime indicator of its ability to compete.” I hope we can help you better compete, and we pride ourselves on personalized service. Let us know how we can better help you on any current or future projects. To current customers, thank you for your business and to potential new customers, please give us a call if we can help you in the near future. Stay safe and God bless.