M Focus on: Fleet Service & Management
Shortages cause some fleet managers to rethink purchasing policies
By DENISE FEDOROW | The Municipal
The seemingly never-ending COVID-19 pandemic has wreaked havoc in all areas — including fleet management — as shortages have made procuring new vehicles a longer and more challenging process. One of the biggest reasons for the vehicle shortage is due to the shortages of semiconductor chips. According to an article in Tech Monitor — “Here’s what we know about the global chip shortage” by Matthew Gooding, July 2021 — the shortage was precipitated by an increase in demand for electronics as businesses and consumers began buying new laptops and servers in order to work and attend school virtually. That article stated sales grew 6.5% in 2020 and by July 2021 had grown 26% higher than 2020. A principal analyst at a tech research company reportedly said it was the worst shortage he’s seen in his 30-year career. Most chip manufacturing is done by two companies in Taiwan and a drought — the worst it’s seen in 50 years — was affecting the process as water is necessary for chip manufacturing. Reportedly, automotive companies also scaled back production at the start of the pandemic thinking it would cause economic devastation, and Gooding’s article stated this 18 THE MUNICIPAL | MARCH 2022
pushed them to the end of the line for chips when they ramped up production again. Adding to it all is the labor shortage, supply chain issues and demand growing from those receiving stimulus funds to purchase new cars. Randy Fuss, director of government accounts for Doosan Bobcat and Bobcat Company in North America, said, “Manufacturing, in general — whether vehicle or equipment — is struggling with supply chain constraints due to very high demand as the economy tries to pull through and get past the pandemic.” He noted, “The challenge is demand, which is increasing significantly, and the supply can’t keep up — labor shortages and outside of that the offshore issues with the ports is (contributing). The combination of all that makes this the perfect storm.” Fuss added, aside from the microchips, “Everyone is competing for raw
ABOVE: Pictured are just a few vehicles present in the Union County, Ohio, Sheriff’s Office fleet. (Photo provided by Union County Sheriff’s Office)
materials — steel, wiring, electrical components and other materials.” Impact to cities and towns Fuss said the shortage has impacted cities and town’s budget cycles. “Cities and towns have planned for specific budgets and received quotes; in the manufacturing industries, prices have gone up. This has caused them to have to go through the approval process again with the increased prices.” The lengthy process of getting council approval has also made it more challenging. Tom Morgan, chief deputy sheriff of Union County, Ohio, said he started talking to the company his department had purchased its cruisers from in August and September 2021 about the orders for 2022 — asking them about the delivery times and what hurdles they might have to go through. “Many of our equipment purchase orders have a disclaimer on them to expect delays of 120 to 180 days,” Morgan said. “That’s pretty typical now for equipment purchases.”
