With oil prices continuing to rise and oil shortages impacting every major company, there has been a lot of speculation lately. Is this the new normal? How much more will the price go up? Will delivery delays continue? Will I get all the oil bulk oil I purchase?
Unfortunately, many of those questions are valid, and even the best predictions would be merely educated guesses at this point. However, here are a few factors to consider to help guide your oil purchasing decisions:
1. Supply is Limited
Short supply of base oils & additives has led to the industry’s significant oil supply issues. Every major company continues to face shortages. June and July 21′ were likely the most difficult months in dealing with these limited supply issues. August isn’t a lot better, but it appears things will improve in September through the end of the year.
2. Transportation is RidiculousEverything about transportation is a challenge in the oil industry right now. Everything from the cost to ship products to a substantial shortage of drivers. To give you an idea of the talent challenges, there is only one driver available for every five bulk trucks needing to be shipped. This talent shortage is causing significant delays in shipping finished goods on time. It’s gotten so bad; most companies won’t let drivers leave their warehouses with a partial truckload. Castrol has added 40% more bulk truckloads than the May average to address demand.
3. Safety Stock is Down
Most safety stock has been depleted to address the current supply demands. As we are coming into hurricane season, there is risk that if a storm hits the Gulf Coast, there could be additional shortages.
What does this mean for your store?
If you carry a quality oil like Castrol in your shop, there is good and bad news. The bad news is Castrol and every other quality oil manufacturer isn’t projecting to be out of the current supply disruption until October or November of 2021. The good news is that it’s getting better each passing week.
While your store might feel the impact of out-of-stock SKUs, there are a few things you can do to help us help you.
Order early, order often, and stock up on bulk oil.
We are working our tails off to ensure you not only save money on quality oil, but you get it in a timely manner.