If you’ve recently purchased a new copier, chances are, you‘re still waiting for it right now.
However, you’re not alone – everyone’s having the same problem. There are in fact two factors causing the delay: a shortage of chips and a backup in the global supply chain leading to a shortage of everything from electronics to toys.
1. Chip Shortages
Chips are vital components of almost every electronic device we use. The shortage of chips was caused by the increased demand for electronics during the Covid-19 pandemic.
Chip manufacturing is a complex and expensive process. Several firms are involved in the production of chips, including manufacturers and suppliers of technologies, materials, and machinery. Scaling capacity alone cannot solve the problem of shortages.
Taiwan produces 95% of the world’s most advanced chips. TSMC (The Semiconductor Manufacturing Company) is a leading chip manufacturer in the world. Over 90% of TSMC’s revenue is generated by customers outside of Taiwan.
The struggle to secure key components has affected many industries, ranging from electronics to automotive.
During the Covid-19 pandemic, TSMC had to reduce production like almost every other business in the world, while microchip demand soared across the globe almost instantly. Therefore, chip factories had to increase production with fewer workers, and as a result, supply simply could not meet demand.
Taiwan’s ports were also operating with a reduced workforce. At first, global shipping was reduced drastically during the pandemic – but demand for shipping quickly exceeded pre-pandemic levels.
Two of the largest ports in the US: the Port of Los Angeles and Long Beach Port, were affected by the same problem as Taiwan: forced workforce reductions. To compensate for the reduction in ships, more containers were stacked, which led to longshoremen spending more time unloading each ship.
Before Covid, Los Angeles’ port used to unload 10 ships per day. Today, it unloads around 15 ships each day. This means a 50% increase in productivity, with a reduced workforce.
While longshoremen’s productivity boost is impressive, but it isn’t enough. Every day 18 ships arrive at the port waiting to be unloaded. That nearly doubled the number that arrived daily before the pandemic.
Back up & Bottlenecks
Making matters worse, there aren’t enough truck drivers to take the goods from the docks to the consumers.
It resulted in retailers delaying products and a reduction in profits, which in turn raised shipping costs.
The limited cargo capacity of ships makes space a highly valuable commodity. The price of a single ton of freight jumped from $1,800 to $3,600, and there is no guarantee of the space that retailers bought. If a retailer gave up their spot in line because of price gouging or unpredictable shipping times, they would lose their spot and would have to wait for the next ship
There has been a significant increase in the cost of international shipping. This global shipping crisis isn’t just affecting copiers. From electronics to toys, to cars and car parts, clothing, and building materials, it seems like practically everything is being affected by the global microchip shortage and slow shipping.
Originally, shipping experts predicted these delays would resolve themselves by the summer of 2021. However, you may have noticed that it is currently the fall of 2021, and the delays still continue.
The delays are expected to be resolved by 2022, however, with new virus variants, these delays may be extended further.
Look Into the Future & Plan Ahead
So planning in advance and being proactive has never been as important as it is now. If your lease is coming up for renewal in a few months, or even a year, it is a good idea to start looking into copier options now.
Regardless of the copier brand -Kyocera, Canon, Konica Minolta, Xerox, HP – every manufacturer is experiencing the same delays.
Planning ahead is the best thing any business can do. KBA Document Solutions is working hard to ensure that all of our customers receive their orders on time. If you need to upgrade your office equipment, contact us today.