In short supply
If you are building new marina infrastructure or undertaking refurbishment you are likely to have noticed suppliers of stainless steel, construction materials and engineered plastics getting increasingly hot under the collar about the price and availability of imported goods.
There is good reason. Thanks to an extraordinary set of circumstances, the word is facing unprecendented demand for certain items, shortages of others, and logistics challenges when it comes to shipping.
By way of example, Andrew Wilkes of Dixon Manufacturing in Warkworth says there are really only two nickel mines out of a few in the world with large enough capacity to supply the demands of the Stainless industry. Nickel is is in short supply thanks to the increased demand for electric vehicles. Add this to shipping woes and the situation as a supplier is getting tense.
“Day by day we are seeing an increase in the price of nickel,” Andrew says. “Our offshore suppliers will only hold a price for 24 hours.”
Andrew says that two local suppliers are predicting an increase of 20% in March and with ships being turned around, this means companies caught in the middle, as his is, are paying whatever the going rate is when it lands. He is aso facing challenges with shipping his export products. For example, he was quoted $1,400 to send product to Adelaide by sea freight in November. The actual cost was $6,500.
Tom Warren of Heron Marinas has also found the company caught up in the middle of massive price increases and shortages, including Stainless Steel and most other construction materials.
Heron Marinas is also waiting on a mesh bending machine and a multiwheel transporter that normally would have been here some time ago.
Heron has so far honoured the prices it quoted as long as twelve months ago, absorbing the price difference as a matter of good business.
“We have signed contracts and we can’t go back and change it, but in the future this will be factored in,” says Tom.
The upshot is that marinas and boatyards will need to anticipate increases within their budgets. Gareth Wilson is Operations Manager at Westhaven Marina. He says that future budgets will allow for material increases, or they will be short.
Phil Wardale says that many marinas reference their prices to the Consumer Price Index (CPI), which could be problematic as the CPI does not take into account the price of imported raw materails. By contrast the Construction Price Index has risen around 15% in the last year, and 12% the year before.
Brent Wilson, Manager at Marsden Cove Marina, cautions that eventually prices wil be passed on to the consumer.
While the marine and marinas industry are experiencing a pandemic-induced boom, there is no doubt that both operations and their suppliers will need to take a cautionary approach when it comes to planning future projects, so that we can all come out the other side of the pandemic and its effects in good shape.