Wabash National Corp. has announced plans to increase its pricing on new trailers by 4.5% to 6% due to cost increases of raw materials including steel, aluminum and wood.
“The amount of cost increases we are currently experiencing requires us to pass through these increases to our customers,” said William P. Greubel, Wabash president & CEO. “While there may be a brief lag effect in the near term in recovering these cost increases, we expect to pass a substantial portion, if not all, of the increases through.”
This price increase indicates a ripple effect as steel prices have soared, creating problems with the bottom line of manufacturers, and now in turn is getting passed on to the consumer. The Wall Street Journal Online reported on February 23 that the cost of steel jumped 30% in less than two months.
Scrap metal has been in short supply the last few years, mostly because there has been stagnant production of goods during the recent recession, Tom Mele of Connecticut Metal told Fleet Owner.
“Most of the steel produced depends on scrap,” Mele explained.
Now that the revitalized manufacturing sector is demanding raw materials, supply shortages— which resulted from the recession— have created a whiplash effect on the economy. The weak dollar has also been a decisive factor, as it inflates prices of imported steel while stimulating exports of raw material, Mele said.
The rising steel prices are not expected to decrease anytime soon, Mele said, citing rising fuel and transportation costs. Ultimately the rising cost of steel is a result of tight raw material supplies coupled with a rebounding U.S. economy.
“We resisted when the price of scrap metal went up but in the end we paid it because we had to. The manufacturers resisted when we increased the prices but the bottom line is, they need it,” Mele said.