Daimler Trucks says it's facing enormous supply chain pressure

Daimler Trucks says it’s facing enormous supply chain pressure

Supply chain disruptions continue to reverberate around the world, with the boss of the world’s largest truckmaker warning that parts shortages are slowing production of thousands of its vehicles.

Daimler Truck CEO Martin Daum told CNBC on Wednesday that the current supply chain constraint is one of the worst he has seen in his 25-plus-year career, creating major bottlenecks in the set. of company brands.

“We are facing enormous pressure on the supply chain,” said Daum, whose trucks are used for other vital industries such as logistics and construction.

“I would say it’s one of the worst years in my long career in transportation, where sometimes we have to touch a truck three or four times to add the missing pieces,” he added.

Truckmaker Mercedes-Benz said earlier this month that there were signs that the long-running chip shortage appeared to be easing. Microchips, or semiconductors, are a critical component of modern car manufacturing and were in short supply during the height of the Covid-19 pandemic and the resulting factory closures.

But Daum said shortages of other parts also continue to slow production of thousands of trucks at his international network of factories.

“We have, in a couple of factories, more than 10,000 trucks that are missing one or two parts and we are desperately looking all over the world for those parts,” he said.

Supply chain disruptions are causing a production backlog at the world’s largest truckmaker, Daimler Trucks.

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Inflationary pressures are also weighing heavily on Daimler Truck’s output, as energy and raw material costs are now significantly higher, with some price increases easier to pass on than others.

“Right now, we’re driving those price increases on the commodity side, so that we can at least maintain our margins in that business,” he said. The company is also in negotiations over salary increases for employees.

Still, the truckmaker, whose other brands include Freightliner, Western Star and Fuso, noted some bright spots. In the United States alone, Daum said, he sees pent-up demand of about 200,000 trucks as it continues to hit supply shortages through 2020 and 2021.

“That, in my opinion, makes me optimistic that we will see a not so bad 2023. And not so bad is a German expression because it could be a good 2023,” she said.

Daimler Truck last month reported an 8% year-over-year increase in first-quarter sales, with group revenue up 17% over the same period.

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