Orders for imported boats such as this Grady-White 330 are upwards of 12-18 months.
Since February 2020, in less than 18 months, the global yacht market has been on a veritable roller coaster ride, as well as many other markets. (probably all), as a direct or indirect consequence of the Covid-19 pandemic.
Universally, since around February 2020, boat builders, be it builders of small trailer boats to superyachts, have experienced economic and management effects. Generally, these ups and downs have so far been absorbed by the builders for the largest part.
However, a small part of those effects must eventually be shared with the consumer. The whole Covid affair is certainly a “Force Majeure” that has justified extraordinary sacrifices in 2020 and 2021 and could see further increases for the boat buyer.
Since December 2020, globally and on average, suppliers have applied price increases for goods, raw materials and services at an extraordinary growth rate, motivated by a generalised and robust growth in upstream costs. Figures published recently have seen an increase in oil (+100%), natural gas (+70%), steel (+123%) and copper (+98%).
One of the products for boat building, resin (base for fibreglass), has increased +60%. Interestingly one of the three largest resin producers globally has gone out of business, and the two remaining ones are struggling to meet demand. Wood is up +45%, and then when you need to ship the boat to market, transoceanic freight has increased upwards of +70%.
Since early this year, many suppliers that specialised in nautical components of all sorts have issued price lists with increased prices. Some have issued several editions, adding increase after increase. Depending on the type of goods, we see increases in the 15%-60% range on average: these increases are usually non-negotiable and are imposed by the suppliers.
At the same time, the availability of goods (raw materials and components), and the availability of transport services, are increasingly reduced. New engine production, both outboards and diesel marine engines, struggles with a lack of components to complete their engines. Waiting times are lengthening and can double or triple. The stocks available from importers and wholesalers can be reduced to practically zero. All this leads to delays in the arrival of goods and components at the boat factory, regardless of advance planning. These delays can affect the delivery time of the finished boats. Hence delivery dates are not uncommon, from 12 months to two years for boats from local boat builders and suppliers.
From reports received directly from suppliers, it seems this situation is generalised, not only throughout New Zealand & Australia but also worldwide.
The ‘better’ builders remain forward-looking, who work with suppliers using advance planning of purchase orders to minimise the risk of production delays. Such advance planning (in the past, the basis for controlling price trends) is no longer effective for the reasons above-described. We see a steady increase in all manufacturing costs – direct and indirect – which is now unsustainable at today’s price list level. This effect is amplified by the fact that orders are taken months and years before the boats are manufactured.
It is necessary to clarify that these increases are imposed on the boat manufacturer by suppliers retroactively for goods on delivery, even though such goods were ordered many months ago with agreed “locked” rates. At the same time, the delivery dates of goods keep on being delayed even though the builders planning with suppliers was shared and approved many months in advance.
To put it bluntly: most suppliers deliver when they want at the price they want, even though programs and orders are agreed and signed well in advance. The result is it hits the consumer in the pocket hard. When you do order your next new boat, appreciate what the manufacturers are going through. Delays are going to be with us for some time yet, and while 2024 for your new boat may sound light-years away, if you delay any more, it could be 2025.