Consumers and business owners all over the country are dealing with the downstream effects of a massive HVAC equipment shortage. But what, exactly, is responsible for this shortage? What types of equipment and parts are affected? And what can you, as a consumer, do to manage this shortage if you’re in need of HVAC equipment?
The HVAC Supply Chain and HVAC Shortages
In the realm of commerce, a “supply chain” represents the flow of goods and services between different businesses, or different “nodes” on that chain. At the start of the supply chain, raw materials are produced and shipped to businesses that can refine or change those materials. Those components could then be shipped to a manufacturer, who can create a finished product. The finished product could be shipped to distributors, who eventually sell it to consumers.
As you can imagine, there are many links on the supply chain. And a major issue with any one of those links could be enough to cause disruptions for consumers down the line. In the HVAC supply chain, there are two main issues in the supply chain causing problems with supply:
- Shortages of raw materials. HVAC products require a combination of many raw materials, such as plastic, copper, steel, and aluminum. Currently, there are significant shortages of many raw materials, but especially steel and copper. Without enough steel and copper to meet demand, manufacturers simply can’t produce enough parts and machines to keep inventory high.
- Shortages of semiconductors. Shortages of semiconductors are also a problem. Semiconductors are a special material that’s essential for most electronic appliances and devices. They’re a practical requirement for many modern air conditioners and heaters.
The Root Cause of Shortages
There are several factors that have led to these shortages, including:
- The COVID-19 pandemic. Many supply chains in a variety of different industries have suffered delays and deterioration because of the COVID-19 pandemic. Pandemic restrictions shut down many different forms of transportation and travel, limiting the flow of goods from one country to another. Lockdowns and restrictions all over the world also limited the number of people available to work at various locations, resulting in lower productivity, shipping delays, and other wrinkles. Cumulatively, the economic damage caused by the COVID-19 pandemic is hard to calculate – and since the supply chain often takes months, or even years, from raw material production to the emergence of a final product, we could be feeling the effects of the pandemic for years to come.
- The Suez Canal blockage. Though millions of people turned the incident into a meme online, the Suez Canal blockage of 2021 had a major economic impact that disrupted the HVAC supply chain in its wake. A combination of technical and human errors are thought to have caused the Ever Given, a 400-meter, 200,000-ton vessel carrying 18,300 containers, to become lodged horizontally and block the Suez Canal – a very important shipping route for international trade. It’s estimated that about 12 percent of global trade passes through the canal every day. It’s almost impossible to estimate the true economic impact of this incident, since it has such a wide-reaching effect, but it held up $9 billion of trade every day for nearly a week.
- The Texas snowpocalypse. Vicious snowstorms in Texas early in 2021 also caused economic disruptions. The so-called “snowpocalypse” resulted in power loss and other disruptions for multiple major semiconductor factories – complicating matters for an already-strained supply chain.
- The semiconductor factory fire at Renesas. Though it’s now back to full capacity, a major fire at the Renesas semiconductor factory in Japan destroyed nearly 6,500 square feet of area, with 23 machines destroyed in the process.
- Increased summer demand. HVAC experts expect surges in demand during the summer months. Some people use old air conditioners for the first time in months, figure out there’s a problem, and need to replace the unit. Others get hit with a wave of heat with no preexisting air conditioning – and they make the decision to upgrade their home. In any case, it’s normal for air conditioner repair demand and AC unit sales to increase toward the end of spring. This summer, demand rose disproportionately; thanks to more people working from home, more people are demanding better climate control for their home environments. It doesn’t help that we’re seeing heatwaves and high-temperature records all over the country, adding to the pressure to buy new AC units.
What Else Consumers Should Know About the Shortage
There are a few other important things that customers need to know about the shortage.
- HVAC companies are doing everything they can. The supply chain shortage isn’t just affecting one line of products or some companies in some areas – it’s something that’s hitting the entire industry. HVAC companies are suffering from lost sales and missed opportunities, and they’re doing everything they can to provide quick service to their clients – and sell HVAC equipment when possible. If it’s going to take 6 weeks to get a part in – that’s probably the best timeline you can hope for.
- It’s important to keep your existing unit in good condition. While the shortage is ongoing, it’s important to keep your existing unit in good condition – so you don’t need to replace it during the shortage’s peak. You can keep it in good shape by running it at reasonable intervals, changing the filter regularly, and having routine maintenance performed by an expert.
- If you need a new unit, try to shop early. If your unit breaks down or if you know you’re going to need an upgrade soon, try to shop early. Get several quotes from multiple vendors, preferably weeks or even months in advance of your need.
Despite the shortage of parts and units, at Mackey Mechanical, we’re doing our best to repair, replace, and install HVAC equipment for our residential and commercial consumers. We’ll work with you to get the parts you need as soon as possible – and give you the working equipment you need. Schedule an appointment today!