The View Ahead Looks Bright Despite a Few Obvious Potholes
As we reach the end of 2023 and look ahead to next year, it is easy to spot some potholes in the road ahead. Will they be as large as those challenges we have sidestepped over the past few years? Consider what we have gone through:
Huge Hurdles Behind Us
From 2020-2021 we were all shaken by a worldwide pandemic that directly affected our workforce as well as those of our partners, suppliers, and customers. Previously rock-solid supply chains were suddenly bent or completely broken, forcing us to scramble to find alternative sources or new designs. Temporary shutdowns at automakers helped to cause a shift in semiconductor allocation, and when they tried to resume full operations, a shortage of microchips caused a backlog of cars and trucks that has been difficult to reverse. A truck driver shortage and union strikes (and fears of more) have added to the frustration and made even smooth production operations look choppy and disjointed at times – both for automakers and upfitters as well.
And yet, we are still here, surviving and thriving despite these huge obstacles. In October 2023, Scelzi Enterprises completed their fiscal year with a 24% increase in shipped truck body volume over the previous 12 months, slightly exceeding their 10 year average. But it certainly was not easy. Others have survived with varying degrees of success.
Glimpsing into 2024
While peeking ahead at 2024, it is easy to see a few squalls that might lead to full fledged storms, but do any match the hurricanes just mentioned from the past 3 years? That does not appear to be the case, though there are some good reasons for concern:
- The US economy: Fuel prices remain high and inflationary pressures seem to be in a holding pattern for now. High home prices together with higher interest rates have dampened new housing sales, and new home construction is running 4% below 2022 averages.
- Wars and International Conflicts: the war in Ukraine has been joined by the Israel – Hamas violence, diverting attention and financial resources away from commercial activities and adding to feelings of uncertainty that can delay business decisions.
- Weather: historic patterns of rain and heat are being challenged and broken.
- A Presidential election is looming next November, and the divisions among us will likely be intentionally provoked and exaggerated by some factions for short-term political gains.
- In California, the state Air Resources Board (CARB) has set new restrictions on truck-based carbon emissions that will begin to take effect on January 1. These rules will require that a certain percentage of all trucks sold in the state be Zero Emission Vehicles (ZEV), and those percentages will increase at set intervals in the future. CARB states that trucks represent 6% of all vehicles on California roads but 25-35% of the harmful emissions. The result will be a change by automakers in the mix of chassis cabs offered for sale and upfit in California and surrounding states.
Steering with Both Hands on the Wheel
How will Scelzi and other upfitters respond to these challenges? “More advance notice of the CARB rules would have been my preferred choice,” states owner Mike Scelzi. “It is not easy to mix and match which models are produced in our facilities in different states. It certainly makes it harder for proper staffing and to adjust our supply chains for optimal delivery to dealers. But I am confident we will overcome it.”
And that is one thing 2024 will share with recent years: a confidence that obstacles can be overcome with a little bit of creativity and plenty of focused teamwork. At Scelzi Enterprises, that has proven to be a path to success for nearly 45 years. For more information, visit www.seinc.com.