I was looking through a picture book my wife makes every year, from the year 2020 yesterday and thought to myself what a decade the last two years have been. So much has changed from the way we buy to the way we travel and explore. Still, looking back, it was one of my most active outdoor years and that's not unique to me, I think.
Overlanding exploded in popularity as people sought out the outdoors as an escape. Many people have been turned on to the healing power of vehicle based exploration and more are discovering this every day. And it's not likely to let up anytime soon. Industry analysts and IBIS predict that the outdoor recreation industry will grow 2.4% every year for the next 5 years and be a $7.3B industry. The tent and awning industry is a $3B industry and it is growing just as quickly.
Coming with that are all the associated pros and cons.
There are now far more players in the overland space. It's so much easier to find clubs, groups and gear. Where there used to be one or two manufacturers of, say, roof top tents, now there are dozens, and innovation has never been greater. Knowledge about the hobby is flowing like never before and there is an excitement in off-roading like there hasn’t been in decades.
On the other side of the coin, the outdoors is starting to feel the hurt of being loved so much, and the global supply chain disruptions coupled with the sudden increase in popularity and [formerly] cheap gas created high demand, and low supply, creating a squeeze on popular overland items shipped from overseas.
In addition to completed products, domestically produced goods are also feeling a strain as raw materials are being held up making for more expensive manufacturing, long waits and costlier goods. What has historically been 5-7 day turnarounds on shock rebuilds at ICON, for example, have taken weeks as they wait on parts and work through backlogs. I’m currently coming up on week four for mine to come back. If you’ve found yourself waiting patiently for parts, take some solace in knowing you aren’t alone. So how did we get here? What is the current state of the market and what does the future bring?
First, a little background on the problem with the supply chain.
Simplifying the problems of the supply chain is dangerous, but there are a few key players that point to the larger problems.
Did you know that 40% of all the goods that come into the US come through 2 ports - Los Angeles and Long beach. In normal times, volumes can be somewhat predictable and shipping companies can more or less keep the flow going in and out. It used to be common, for example, for ships to wait no longer than 24-48 hours at anchor and for containers to dwell on docks for roughly 2-4 days. As of December 2021, those numbers had ballooned to weeks. The problem, as anyone stuck behind a slow vehicle on a tight trail can tell you, is that the fastest you can move is the speed of the slowest part of the chain.
So why the bottleneck? Have you ever wondered why the whip Indiana Jones uses makes the characteristic *crack!*? Well that sound you hear is the air exploding as the tip of the whip goes supersonic and creates a shockwave. The large inputs you put in with your arm get concentrated in a tiny area and all that energy gets pretty dramatic. Now go backwards up the whip. A change at the bottom will grow and grow in magnitude as it travels up the whip. This is called the bullwhip effect. In short, one small change can ripple backwards through the supply chain and cause massive disruption. Not having a part for a mining machine means lower output of ore, which means reduced steel output, which means fabricators have a harder time sourcing steel and racks and bumper production gets pushed back and the costs go up. The resulting bottlenecks have increased the cost to ship 10x, as each slot on a ship becomes more precious to the person waiting for that critical item and more cargo gets backed up.
So why didn’t the mining company have that spare part? Optimized inventories. You’ve probably heard it called “lean inventory”. What it means is having what you need just in time to use it to avoid stockpiling goods that not only aren’t going towards profit but cost money to store. This principle is famously used by Toyota to make their company lean and increase their profits. Done right it works in good and bad times (Toyota was one of the few companies not initially affected by the chip shortage, allowing them to keep up production while others couldn’t), but without great care and discipline it can create huge problems when things aren’t normal.
Pair this with an industry that has become highly globalized and reliant on shipping and trucking for every part of that supply chain and you can see how this all adds up to be a huge mess. When the pandemic started, demand dropped off a cliff and manufactures canceled orders and prepared to weather the storm. When demand came surging back companies were caught completely unprepared to restart a supply chain that was very fragile and when we all started buying again…we sorta broke it.
The meat and potatoes of this 5 minute business lesson is that your stuff costs more, is harder to find and may take a long time to get. This affects everything down the line and makes all goods more expensive, contributing to our crazy inflation.
So where are we now?
Thankfully, we are starting to see some relief from the supply chain strain, but we are not out of the woods yet. Where items were backordered at Morris and Overlander, we are starting to get stocks back. Some items made to order like racks and bumpers might still be a wait as they work through backlogs to get deliveries made but we are finally starting to rebuild our stock of the best curated overland products.
Still, some products will be more or less available for some time as manufactures sort out how to deal with these disruptions in their own ways.
With new products from MSR plus others coming soon as well as some of the most popular items in stock, we will have plenty of other gear to keep you going from racks and awnings to suspension kits and lighting.
What about the future?
It's too hard to predict where we will be with regards to the supply chain but signs are pointing to some relief on the horizon. Backups at ports are easing and volumes are stabilizing somewhat, although some specialty items, especially electronics, may be be hard to find for some time. What we do know, is that the love of the outdoors and the overland industry appear to be growing at a steady pace with no end in sight. Yes, high gas prices are certainly going to put a damper on travel (read here how to make the most of it) and there are still some headaches with international travel with regards to COVID-19, but the outdoors is still a wonderful place to heal in a world that is not getting less stressful.
In 2022 and beyond my hope is that we can love the outdoors a little more carefully, be a little more patient and slow down enough to really get the most out of what the hobby has to offer.
See you on the trails.
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