If you have shopped for products in our industry recently, you are aware stock has been harder to come by. The “fight for materials” is real. Reduced production in 2020 from the COVID-19 pandemic and mass blackouts from the February freeze earlier this year have resulted in unprecedented inflation in materials, freight and logistics cost. All occurring while the demand for broadband is rising steeply.
While we’re proud at TCS to have kept all our employees through the pandemic and continued to manufacture at our same run-rate, the cost of materials has significantly increased. Prices for steel and chemical compounds used to make plastic have reached their highest levels in years as supplies tighten. At TCS we have seen prices increase more than 50% since last summer.
The fiber optic cable industry, including TCS, must begin adjusting prices on products to account for the additional cost incurred by the materials shortage. Unfortunately, TCS, and companies like us, cannot avoid the additional costs.
What can you do?
Plan ahead! While we are doing everything possible to increase inventory on-hand and contain costs, the materials shortage and rising inflation will have an impact on stock and pricing in our industry. If you have projects you know are coming up, contact us now and we will work together on a plan to bring in additional inventory for you. HURRY, our product team is reviewing their product price list now and will implementing increases in-line with our increase in the cost of materials.
How did we get here?
It’s been quite the journey for everyone the last 18 months. Let’s look at the timeline to make sense of this.
The COVID-19 pandemic resulted in reduced production in 2020. While we’re proud at TCS to have kept all our employees through the pandemic and continued to manufacture at our same run-rate, the cost of materials significantly increased.
RDOF auction begins. The Rural Digital Opportunity Fund (RDOF) and other government subsidies/incentives to close the digital divide begins driving an increased demand in our industry. Great news, except companies cannot find people to hire to meet the demand.
2021 arrives, phew it was not a guarantee!
The February freeze hits triggering mass blackouts in Texas leading to chemical plant shutdowns that disrupted global supply chains. The result was a shortage of the raw materials needed for just about everything. In May our industry is still reeling from the shutdowns.
Prices for steel and chemical compounds used to make plastic have reached their highest levels in years as supplies tighten. At TCS we have seen prices increase more than 50% since last summer.
We cannot state enough the importance to plan ahead, now! We expect the demand will continue to increase and the “fight for materials” to continue into next year.