Raw Material Costs and the Nationwide Labor Shortage

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As the economy begins to reopen now in what we hope are the late stages of the pandemic, unemployment is at an all-time high. As the labor shortage continues to sweep across the United States, workers have the upper hand when finding employment, and employers try to deal with the consequences.

We’re seeing a tighter labor market as well as increased costs for raw materials and shipping. As a result, some companies are struggling to find qualified workers, and many others may not be keeping their customers informed about ongoing changes. 

At Budget Mailboxes, we’re committed to keeping our customers up-to-date on all price increases and shipping delays. 

This post will explain what shortages are taking place and why manufacturers are struggling to find the right workers for the job. We’ll also discuss how those shortages are affecting Budget Mailboxes. 

Nationwide Raw Material Cost Increases

The cost of raw materials has surged dramatically in 2021. Unfortunately, this increase in raw material costs has had a knock-on effect for both manufacturers and consumers. 

As the price of raw materials goes up, manufacturers must also increase the price tags on their products to keep up with the inflation. As with many other services in 2021, the nationwide cost increase has also impacted our mailboxes industry. 

The country can expect to see at least a 10% increase in the price of raw materials. Furthermore, there’s no end in sight for 2021 as demand continues to be high. You might be asking: Why is demand so high? The answer remains complicated, and there are many factors at play. 

For example, within the manufacturing field, China plays a massive role in creating raw materials. However, the country has substantially reduced its production of steel and aluminum in the past year. 

Within the food and agriculture fields, poor weather has negatively affected the growing season in both Brazil and France. No matter which service areas you examine, the need for materials remains high. Unfortunately, the mailbox industry is no exception. 

At Budget Mailboxes, the price increase in raw materials has impacted all of our products. We have had to raise our prices throughout the year to keep up with the rise in material costs. Despite these increases, our team is working hard to provide our customers with competitive pricing and unmatched customer service.

Raw Material Shortages and a Tighter Labor Market

Both the nationwide raw materials and a severe labor shortage have substantially impacted mailbox production for our suppliers. 

Our top manufacturers, including Florence Corp. and Salsbury Industries, have made adjustments within the last year. As a result, our valued customers should expect higher prices and slower turnaround times for products from certain manufacturers. 

For example, Florence Corp. is experiencing variable delays for cluster mailbox orders. These delays might mean longer waits that don’t match your original estimated lead time. However, our team will always communicate with you regarding any changes to your order.

The raw material and labor force shortages are also affecting our price quotes. Because our industry is experiencing many sudden price increases, customers will now receive an expiration date with each quote. We will ask you to commit to the quote before the specified date to receive the listed price. 

We will continue to work with every customer to provide the best possible prices on all mailboxes. 

Nationwide Labor Shortages Based on Labor Statistics

While the need for many products is increasing, the availability of qualified workers continues to decrease. There are more job openings than workers in many states. The U.S. Chamber of Commerce has examined the statistics and officially labeled the shortage a “national economic emergency.”

The shortage has significantly affected blue-collar jobs and the manual labor market. However, the hospitality and restaurant industries have also been massively affected. 

Across the country, restaurants, hotels, and factories don’t have enough workers to keep things operating normally. The worst part? There’s no end in sight to the tight labor market, at least not in 2021. 

Many employers are offering employees higher wages, better job benefits, and training opportunities. Despite this, the Bureau of Labor Statistics shows that quit rates are higher than ever. In addition to other factors, the high quit rate is due to the health concerns of older workers brought on by the coronavirus pandemic and its new Delta variant surge during the summer of 2021.

To combat this, businesses are increasing wages, and employers are improving working conditions. However, the data continue to show that people are simply not applying for jobs. As a result, many workers remain unemployed, and companies continue to run at half capacity. 

Despite competitive pay and plenty of employment opportunities, businesses find it difficult to get new hires for their jobs. 

The nationwide labor shortages have also impacted our top manufacturers who fulfill our customer orders at Budget Mailboxes. Because these manufacturers do not have the reliable workers necessary to run their factories effectively, they can’t keep up with the increasing need for their products.

Demand for commercial and community mailboxes has increased, and the labor shortage is growing with it. However, these companies — and their skilled workforce — are doing everything in their power to keep up with orders.

How are they fulfilling orders despite the lack of workers? By working extremely hard. The workers at our partner factories are striving to fulfill your orders as quickly as possible.

The Nationwide Fuel Cost Increase Affects Shipping Prices

The U.S. is also experiencing a nationwide increase in fuel costs and shipping prices. The cost of fuel is increasing for three main reasons:

1. An increase in crude oil prices
2. An increase in refining costs 
3. A 57% decrease in the rate of fuel production

Increased fuel costs are leading to higher shipping prices. These rising fuel prices have also impacted the manufacturers and suppliers that work with Budget Mailboxes.

The combination of increased fuel prices and a nationwide worker shortage has meant that most manufacturers are experiencing severe delays in their delivery timelines. Unfortunately, these delays also affect our company and our customers. 

At Budget Mailboxes, we value our customers greatly. Therefore, despite increasing national fuel costs, we will continue to offer free shipping on all orders over $199. 

What Can You Expect From Budget Mailboxes?

There’s no denying that the past year has been a volatile time, with unprecedented changes to many businesses and their hardworking employees. The mailbox manufacturing industry is no exception. 

Increasing prices for raw materials and fuel, plus a nationwide workforce shortage, have led to higher shipping prices and delays in delivery times. 

Consequently, we regret that you may have to pay higher prices for our products for the time being.

Despite these changes, all of us at Budget Mailboxes are committed to providing competitive prices and unbeatable customer service. You can count on our team at Budget Mailboxes to give you all the up-to-date data and keep you in the loop during every step of the ordering process.

What to expect for online pricing

• As a result of the economic factors listed above, we have had to raise prices multiple times this year to account for the sudden increases in manufacturing and shipping costs.
• In the past, we have been able to notify our pending quote customers well ahead of time. But this year has posed real challenges to the way we have done things in the past.
• Given the volatility of current manufacturing costs, we may have to raise prices again before the year is over.
• However, we will make every effort to notify our customers ahead of time in the event of these price increases.
• As always, for Cluster Mailboxes, we will continue to offer our competitive CBU Price Match Guarantee*.

*Note: we cannot match competitors who sell their products at or below cost or have delayed raising their prices due to the sudden volatility in costs.

What to expect for sales quotes

• All quotes will have an expiration date to which we will need to commit. 
• We will print “Valid until” dates on each quote. The standard time frame is 30 days from the creation date. However, some may be less, depending on the manufacturer and any known changes regarding future pricing increases.
• Placing your order (by submitting your payment) as soon as possible is the best way to secure your order before any future price changes take effect. Do not let your quote expire. If you have concerns about the validity of your quote, please get in touch with your account manager.
• ALL online dealers feel these pricing changes. Even so, we still commit to getting the best pricing possible. Talk to your account manager if you have any concerns.

What you can expect from our support team

• If you have not yet received a shipment notification within your order’s estimated lead time, it does not mean it has not shipped. It is often unnecessary to contact us for a status update, as we reach out to the vendor automatically when orders are beyond their estimated lead time.
• Please allow up to 3 business days beyond the estimated lead time to obtain a status update from the vendor. We will communicate any confirmed delays by email as soon as we hear back. We greatly appreciate your patience amid any fluctuations in estimated lead times.

Florence extended lead times 

Florence Corporation is experiencing variable delays for cluster mailbox orders due to overwhelming demand.

However, Salsbury Industries cluster mailboxes with standard numbering usually ship in 2-3 business days at the earliest. Please note that any cluster mailboxes by Salsbury Industries with custom numbering will take longer to ship, usually 14 business days at the earliest.

Conclusion

It is important to note that these economic factors affect all online mailbox stores, not just Budget Mailboxes. Where other online brands may not provide customers with ongoing support during this period, we have the expertise and the team to keep customers in the loop through every step of the ordering process. If you have any questions at all about pricing, lead times, or just products in general, feel free to call, start a chat, or submit a support ticket. We will respond as quickly as possible.

For further reading:

Articles on Raw Material Costs

• LinkedIn: RAW MATERIALS PRICE INCREASE (White Paper)
• WorldBank.org: Raw material commodity prices continue rising amid stronger demand
• Reuters: Factbox: U.S. companies raise product prices to tackle wage, raw material inflation
• Bloomberg: The Price of the Stuff That Makes Everything Is Surging

Articles on Raw Material Shortages

• Modern Retail: ‘The crisis is painful’: Brands are making tough choices because of raw material shortages
• Reuters: U.S. manufacturing gains steam; raw material, labor shortages mounting

Articles on Labor Shortages

• WSJ: The Great American Labor Shortage
• Business Insider: The U.S. labor shortage is a ‘national economic emergency’...
• Barron’s: The Labor Shortage Is Worse Than It Looks, and Help Isn’t on the Way
• U.S. Chamber of Commerce: U.S. Chamber Launches Nationwide Initiative to Address National Worker Shortage Crisis and Help America’s Employers Fill Jobs

Articles on Fuel Cost Increases

• Total Reliance Logistics: HOW CHANGING FUEL COSTS IMPACT SHIPPING RATES
• FreightWaves: Fuel costs push rates higher faster in 2021