Cost Inflation Tsunami
How to increase prices when supply & demand are imbalanced and global transport capacities are short.
What your teams currently face in sales is nothing we have seen for years. Prices are on Fire!!!
Cost have rising up during the past 6-9 months at a magnitude we have not seen for long time.
Copper recently hit its 10 year peak price, Steel is up +35%, Ethylene up more than +70%, Freight Cargo transport rates gone up 4-times (+400%) and truck transport ist also up by 15%.
Suppliers globally in B2B markets report the need for significant price adjustments. Get ready and be part of it. Prepare well and execute well.
There are four reasons you need to know why the costs are up and every supplier needs to go for price increases:
1. The cold winter in the US, especially in Texas, has lead to several shut downs of production plants of the petro chemical industry. The facilities where not prepared for frost and in some cases it will take weeks to restore the capacity.
2. Due to the Pandemic many companies reduced their production or shut down some plants for maintenance. At the same time many stocks are empty. On top of that the border restrictions by the government extend the lead times and you get your material too late. We see force majeure and allocation announcements everywhwere.
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