Soaring energy bills and raw material costs are having an effect across the supply chain, according to exhaust system manufacturer Klarius.
“These are unprecedented times, we’ve had to regularly review the post-pandemic roller-coaster of material costs but most recently it’s been more like a tsunami,” says Mark Brickhill, CEO. “We used to guarantee customer pricing for 6-12 months, but now we’re having to pass on costs mid-month! Unlike petrol on the forecourt, our industry and customers haven’t experienced such fluctuations before and no amount of working with suppliers can protect end-consumers from the current cost price inflation, especially from fuel and energy.”
A particularly challenging area for the automotive and transport industries is the extreme volatility in AdBlue production costs. Large volumes of natural gas are used in the production of AdBlue. Russia’s actions continue to put pressure on European gas supplies, which is escalating gas prices, so AdBlue costs are on an upward trend.
“By my reckoning, half of Europe’s fertiliser, urea and AdBlue capacity is now moth-balled because of gas costs,” continues Brickhill. “Modern environmentally friendly, low-emission diesels require AdBlue, and we’ve already seen 11 cost price changes since January with AdBlue four times more expensive than a year ago. Despite this we continue to serve our customers, whilst others are failing to deliver. This is thanks to sound supplier partnerships protecting AdBlue availability.”
“We will continue to work together with all our customers to maintain supply, but this will inevitably mean further cost increases on very short notice. For what it’s worth, I’m very sorry for this and I wish we could protect customers from these costs. However we’re a distributor and filler, not one of the gas producers.”