Good morning! Weather is getting better, and we are slowly getting out of lock-down. Our life is getting better! Unfortunately, the PPE supply chain is getting worse.
Below is an update based on insight from our suppliers. They have more up to date information than the news in this fast-changing market.
This is the conclusion: The PPE supply chain will become more challenging to manage in the upcoming several weeks.
These are the reasons:
- Global manufacturing capacity is decreasing. Most of manufacturing is in developing countries. As the pandemic spreads like wildfire in developing countries, more factories are reducing their production capacity and some are shutting down.
- There is a global rubber shortage. In the beginning, Malaysia, Thailand and Indonesia, the top 3 rubber producers, refused to export to China. Now there’s another problem. Plantation workers are getting sick with COVID-19 and there aren’t enough workers to work in the plantations. As the rubber supply decreases, the price of gloves is going up and the stock is drying up.
- Airfreight fees continue to rise and air freight is in short supply. Buyers and sellers aren’t able to get their stock onto the limited flights. This has begun to increase demand for sea freight. Every week, we see the price increase.
- 3M is not taking any production orders in June, globally. Distributors can continue to sell the stocks they already have. However, due to limited stock availability, the price continues to rise, especially in the international market where there is less price control. 3M is having difficulty getting raw materials from China. It is uncertain when they will take production orders again and what their production capacity will be.
- Ventilator prices are going down, especially when you order the production. With a production order, you can receive your product within 3 -4 weeks and pay less than 50% of buying an already manufactured stock.
Our recommendations for your purchase:
- PLEASE plan ahead of time. It is getting harder to secure stock and arrange shipment, especially air shipment. 1 month is reasonable planning.
- Please buy production in advance. (Secure a production order.) It’s the way to get the best price and to secure the supply.
- Before you place the order, secure the funds first (100% of the product cost, estimated shipping, and estimated duties). Suppliers no longer patiently wait for payment or entertain late payment. Whoever pays first gets the products.
- There will be a surge of fake products, and the market will be flooded with low-quality products. For example, a factory that used to make underwear will now produce masks.
Aster Impact has built a strong relationship with our suppliers, and they give us a priority. They believe in what we do and want to support our cause(s). However, there is a limit to the goodwill. We work hard to maintain a good relationship and credibility. To do that, we need your collaboration. Plan in advance, secure the funds in advance, and inquire or place an order when you are 150% sure. Let’s work together to navigate the challenging market conditions.