Parts Shortages Trigger Spike in Vehicle Downtime
This article was originally published HERE
It’s been a perfect storm: pandemic-triggered supply chain issues causing shuttered factories and backed-up ports, plus transportation and staffing issues. This perfect storm’s wreckage: parts shortages now fueled further by pent-up demand.
“Beyond semiconductors, these [parts] can be metal stamped components, these can be aluminum or iron castings, they could be plastic parts – I mean, a whole variety of parts that feed the auto industry,” Alan Amici, president of the Center for Automotive Research, recently told a local media outlet in New Hampshire.
This ongoing inventory shortage of a wide cross-section of automotive replacement parts are increasing fleet downtime and likewise increasing fleet maintenance expenses.
The shortages vary by type of part and make and model of vehicle. The length of delays runs the gamut from days to weeks to months or even multiple months.
With Parts Arrival Uncertainties, Downtimes Worsen
In addition to excessive vehicle downtime, another key fleet management complaint is not knowing when to expect a back ordered part to arrive. A part may be on back order, but invariably no ETA is provided.
With this uncertainty, the fleet manager is caught between a rock and a hard place. They can’t predict to a user group when the fleet vehicle will return to the road, generating revenue.
The reality is today, when a vehicle incurs an unscheduled repair and a part must be ordered, no one seems to know exactly how long it will take to fix the vehicle.
And it is not just the fleet manager who experiences this uncertainty; even the repair facilities themselves often don’t know when back ordered parts will arrive.
The ongoing difficulty of sourcing new replacement vehicles has made the parts shortage even worse for fleets. Many companies have been forced to keep existing fleet vehicles in service far beyond their scheduled replacement dates.
As a result, these higher-mileage vehicles are now experiencing the predictable uptick of unscheduled repairs. This spike in unscheduled repairs is further complicated when replacement parts are not in inventory and must be backordered.
All these factors have created longer repair cycles – measured by the time when a vehicle comes into the repair facility to when it is repaired and picked up by the vehicle owner.
Vehicles now can sit nonproductively at service centers for weeks or even months simply awaiting the arrival of an essential part.
This exasperating situation has been going on for two years now. Parts shortages first started to appear in the fourth quarter of 2020, and since then, an ongoing series of sporadic inventory shortages for a variety of automotive components occurred throughout calendar-years 2021 and 2022.
Inconsistent Communication Creates Needless Problems
Needlessly aggravating the delay in repairing vehicles is inconsistent communication from service facilities on repair status. Service shops are notorious for not returning calls on a timely basis.
The following are some examples I’ve heard from fleet managers:
Quote: “One of our drivers took their diesel truck to a dealer for repair but it just sat there for a ridiculous amount of time. When I finally got through to someone and asked why the delay, I was informed that they are not a diesel shop. Why didn’t they tell the driver when the truck was first dropped off?”
Another fleet manager likewise complained about repair shops not returning phone calls, which creates uncertainty as to the reason for the delay in repair. Here what this fleet manager said:
“This lack of communication provides no transparency as to why a delay is occurring. After repeated efforts to contact the shop, I found out a $30 part was holding up the entire repair process.”
In this time of scrambling for parts, fleet managers also must be vigilant that repairs are being done correctly. One horror story recounts how the wrong suspension was installed on a truck for the wrong GVW – a very expensive mistake.
Parts Shortages Driving Up Prices
In addition to long downtime, continued parts shortages are also driving up the cost of maintenance and repairs.
In fact, some used replacement parts cost more than the same part when new. Two reasons for this phenomenon: first, the new part may be unavailable or, second, the rising demand for used parts is driving up prices.
In fact, during the past two years, parts prices have gone up 20%-30% on average. Furthermore, this measure is just an average – some parts have literally doubled in price.
Another factor behind increasing parts prices has been the higher costs of commodities used to manufacture the parts. These increased manufacturing costs are passed on to end-users.
Wide Cross-Section of Parts Shortages
A low inventory exists in a wide cross-section of parts. One component especially in scarce supply today are catalytic converters, primarily due to the large number of thefts.
Besides a shortage of catalytic converters, a long list of other parts are in tight supply. Here’s just a sampling:
- ABS brake modules
- Engine sensors
- Transmission control modules
And the list goes on.
Shortages Impact Accident Repair
The parts shortage is particularly troublesome for repairing accident-damaged fleet vehicles. Parts constraints are a major issue throughout the collision repair industry. Today, on average, securing parts takes 15-30 days longer than in 2019.
And this is a huge issue for fleets because, on average, 20% of vehicles in a corporate fleet are involved in either preventable or nonpreventable accidents and need repairs.
Accident-damage repairs often require entire assembly replacement. And currently, sub-assembly components are in short supply, especially with those that include embedded microchips.
How long will these parts shortages continue?
No one knows for sure, but the imbalance between supply and demand for automotive parts is forecast to continue throughout 2023 and quite likely beyond that.