Boat builders struggle to meet growing demand and solve supply chain issues
There is a growing interest in outdoor recreation with people looking for safe activities in the event of a pandemic, and this demand is driving consumer sales in the boating industry.
Boat sales jumped to 13 years in 2020, and the National Marine Manufacturers Association expects the boom to continue through 2021. U.S. sales of boats, marine products and services are expected to hit $ 47 billion. dollars in 2020, up 9% from last year.
Jason Constantine is President and Chief Operating Officer of Back Cove Yachts, a boat manufacturing company in Rockland, Maine. Constantine said his store was struggling to meet growing demand due to supply chain delays and labor shortages, leading to backorders until 2023.
“It’s wonderful that the demand is there. But we are really approaching two years in some cases, ”Constantine said.
He spoke with the host of “Marketplace”, Kai Ryssdal, about the challenges of his business. The following is an edited transcript of their conversation.
Kai Ryssdal: How is business at Back Cove Yachts in Rockland, Maine?
Jason Constantine: Business is great these days. We’re seeing an incredible demand in all boat sales across the industry, which certainly arose, I think, from the time off that people were given because of this pandemic. At the same time, however, it created a lot of challenges for us as a manufacturer, and I think it’s something that all manufacturers have to face today.
Ryssdal: Well, let’s go over these challenges in a minute. But who buys boats? Do you have, for example, newbies arriving and doing it for the first time due to the pandemic? Are people improving their existing boats? What is the demographics of your consumers?
Constantine: We don’t see newbies as much as you say in our market segment. But across the industry, we’re definitely seeing a lot of new people getting involved. So we see the impact all along.
Ryssdal: It makes sense. Will I have to take out a second mortgage to buy any of these things?
Ryssdal: It’s OK. The truth in advertising.
Constantine: Absolutely, yeah. Basically between $ 500,000 and probably around $ 800,000.
Ryssdal: It is therefore an investment. Tell me about the challenges, right, because it came to my mind as I was preparing for this interview, it’s basically a fabrication story, right? It’s American manufacturing, and manufacturing depends on supply chains. And as we’ve heard throughout this pandemic, supply chains are stressed almost everywhere.
Constantine: Yes, stressed beyond anything I’ve seen in my 18 years in this industry. It’s remarkable that we really had, I think, like a perfect storm of supply chain challenges. You know, we’ve heard that shipping containers are in the wrong places around the world and that obviously caused problems at ports. We had the snowstorm in Texas, where most of our chemical manufacturing and processing plants are located. So all of our plastic bases and petroleum based products, as well as obviously natural gas and things like that that are needed to make fiberglass. And yes, get on board one of the biggest container ships on the planet stuck in the Suez Canal, and we really have a big challenge with our supply chain.
Ryssdal: I laughed, but did you really feel that saving of the Suez Canal?
Constantine: Not yet. We will do it. I think how dependent and interconnected we are with this supply chain across the world has a ripple effect that takes quite a while. So we’re going to feel, you know, supply chain challenges for the foreseeable future.
Ryssdal: Tell me about the foreseeable future. I mean, if I order a boat today, how long do I have to wait to get it to you?
Constantine: We’re currently looking at 2023. Yeah, no, it’s been wonderful that the demand has been there. But we are really approaching two years in some cases.
Ryssdal: Couldn’t you just hire more people and build boats faster?
Constantine: It would be the easy and obvious thing to do, yes. However, the labor market is not stronger than the supply chain at this point. I mean, from a manufacturing point of view, you know, we’ve struggled with the job market. And that has only been, you know, exaggerated by the pandemic. We hear stories of people, you know, unable to find work, but you can’t go anywhere in town here and not find a help search panel.
Ryssdal: Last thing, and then I’ll let you go. What do you think will be the timeframe for some sort of normalcy for you? I mean, I can’t imagine it’s normal that you have a two-year backlog.
Constantine: No it is not. It’s a challenge. I think we’ll definitely try throughout 2021 to go back. Hopefully it’s going to be that awakening moment, I guess, for a bit of a manufacturing renaissance in this country.