4 Major Factors Impacting the Cable Supply Chain—and How We’re Responding
These events of the past year and a half have created several challenges, from material shortages, price increases and transportation and logistics obstacles to hiring challenges and shifts in supply and demand. And the ride isn’t over yet.
You’ve no doubt seen the impacts on consumer products. If you’ve tried to buy video game consoles, zippers, chicken wings, appliances or a couch in the past few months, you know what we mean! The new PS5 and Xbox Series X and Series S gaming systems were launched in late 2020, and people are still having trouble finding them one year later!
There are also four major factors affecting the cable supply chain, too. Let’s take a closer look at these challenges —and the steps Belden took early on to sidestep them.
1. There’s a Lack of Shipping Containers
Nearly every product that moves through the global economy spends part of its life in a shipping container. Although it may be a simple steel box, the shipping container is now a hot commodity and has proven its value in keeping the supply chain moving.
U.S. ports continue to be overwhelmed as workers struggle to load and unload containers quickly (as of Dec. 5, 2021, the Marine Exchange of Southern California reports that 96 shipping containers are still waiting to dock at Southern California ports).
While some are calling this a container “shortage,” others are labeling it as a “dislocation” or “imbalance.” There may be enough containers (in theory), but many are stuck in places they shouldn’t be, which renders them useless. In certain cases, cargo ships are running too far behind schedule to wait for containers to be loaded back onboard (which could take days or weeks). Instead, they choose to leave empty containers behind at congested ports.
2. Natural Disasters Impacted Raw Materials & Travel Routes
When the media talks about natural disasters, it can be difficult to understand the full impact—especially when they didn’t happen close to where you live or work.
Hurricane Ida is a good example. This Category 4 storm made landfall on Aug. 29, 2021, and caused widespread destruction, power outages and flooding along the Northeast. The entire structured cable industry is still feeling the effects—and will continue to do so for a while.
Almost immediately, Hurricane Ida caused a shortage of construction materials, blocked important truck routes and impacted the price of packaging materials. These factors made existing supply chain issues even more challenging. For instance: More than 40% of the United States’ PVC capacity went down after Hurricane Ida, impacting everything from wire and cable jackets to windows and flooring. And these events were piled on top of the obstacles created after Texas’ deep freeze in February 2021, which had already created PVC shortages.
It's easy to overlook how many things are taken for granted—like PVC resin!—until they’re in short supply, and certain products can no longer be produced without them.
Recent weather in Vancouver, BC, is another example. The city’s ports were already jammed when record rain led to flooding and mudslides that took out roads, bridges and train tracks, causing further slowdowns in the supply chain.
The moral of this story: The impact of a weather event spans far beyond the state or province in which it occurs.
3. There Are Struggles Outside North America
Because North America is part of such a global economy, what happens outside the continent impacts what happens inside the continent.
Manufacturers that have to import finished goods (cables, cabinets, etc.) because they don’t make their own are impacted more severely by lagging lead times and price increases. Because Belden owns its cable, connector and cabinet manufacturing processes, we’ve been able to overcome some of these challenges that others have struggled with.
Even if a product is manufactured in North America, it may face a manufacturing slowdown due to the lack of necessary components from the Asia-Pacific region. Production getting back on track in North America doesn’t protect the supply chain from the impacts of COVID-19 outbreaks or weather-related events in other parts of the world. Those factors will still influence what North America can do.
4. Labor is in Short Supply
Even if we weren’t dealing with things like port backlogs, natural disasters and a pandemic, many industries don’t have the manpower they need to scale rapidly. A Stateline analysis reports that 42 U.S. states have more job openings than people looking for work.
Belden Continues to Power Through
The past 20+ months haven’t been easy. Everyone is looking for innovative ways to power through—even far beyond the wire and cable industry. (If you’ve tried to buy video game consoles, zippers, chicken wings, appliances or a couch in the past few months, you know what we mean! The new PS5 and Xbox Series X and Series S gaming systems were launched in late 2020, and people are still having trouble finding them one year later!)
Throughout each of these setbacks, we’ve taken crucial steps to stay ahead of the game. Our No. 1 focus every day is to allocate necessary resources to make sure you get the products you need.
Over the past year and a half, Belden has proven that it can quickly pivot business models and find ways to handle shortages, delays and price increases.
Early on, we prioritized proper planning and the establishment of solid partnerships with raw material suppliers. As a result, throughout these supply chain challenges, our lead times have been better than most other cable manufacturers—and our delivery times continue to be well ahead of others. We’re able to provide products faster: weeks or months earlier than almost any other cable manufacturer.
If we discover that a certain material is becoming difficult to source, we explore innovative ways to work around the bottlenecks. This has allowed us to remain successful in maximizing production.
We want to be open, honest and straightforward about what’s happening in the industry so you can plan accordingly. These challenges are real—and they’ll impact your projects for a while.
The just-in-time approach the industry relied on before early 2020 isn’t the right approach for projects happening now. We recommend adjusting your processes so you’re planning farther in advance.
When will these supply chain issues be resolved? Because that answer depends on so many factors—the clearing of port backlogs, factory closures in other countries, labor shortages, new COVID-19 outbreaks, etc.—no one knows for sure. Most experts caution that challenges will last until at least mid-2022. Others say it will never return to pre-pandemic conditions. Companies like Intel predict that the semiconductor shortage will continue until 2023.
No matter what, Belden continues to do everything it can to minimize inconveniences, maximize production and make sure you can get the products—and the information—you need to keep your projects moving.