Sager Electronics’ director of supplier marketing for power products, Paul Kopp, explores the power supply chain past, present and future
For the past four years, power supply sourcing has been challenging, including a surge in shipping cost/time, extended manufacturing lead times and price increases. While these challenges have continued in some measure, there have been signs of stability and improvement.
Most power supplies are manufactured in Asia and shipped to the US via ocean freight. According to the Freightos Baltic Index, global container prices spiked in September 2021 to $11,000 per container from $3,500 at the start of 2021. Into mid-2022, full container quotes for shipments from Hong Kong to Long Beach, were frequently $18,000 to $20,000.
Thankfully, from mid to late 2022, prices moderated, with international container freight prices decreasing by over 50 per cent from November 2022 to the end of January 2023. Freightos reports the cost of shipping a 40ft container from Asia to the US West Coast declined by over 80 per cent since April 2022.
During late 2020, port congestion in Asia and the US peaked, causing delays in sailings and contributing to longer transportation lead times. Pre pandemic, the shipping time from Hong Kong to the US through Long Beach was typically three to six-weeks. Due to congestion and reduced vessel/container availability, lead time increased to twelve to sixteen weeks, causing significant supply chain challenges. Per Freightos, ocean shipment door-to-door transit time from China to the US improved from 13-weeks in December 2021 to seven weeks in January 2023.
Those procuring power supplies should feel reassured that ocean shipment pricing, port congestion and transportation lead times have significantly improved.
Pre pandemic, standard manufacturing lead times for AC/DC and DC/DC power supplies were around eight to 12-weeks. Early in the pandemic, demand/production slowed and lead times increased to 15 to 20-weeks. At the time, customers and distributors were operating JIT, ordering on lead time or less and managing inventory based on customer forecasts.
As the pandemic continued, material and employee shortages strained capacity and lead times rose to 24-weeks, then 36-weeks, peaking at 60 plus weeks. Lead times are stabilizing and improving slightly, now averaging 36 to 40-weeks. Some manufacturers with strong supply chain controls are even quoting 14 to 16-weeks lead times, especially for <300W AC/DC supplies.
Lead time improvements are contingent on component availability and manufacturing capacity, and the power supply industry faces difficulties in both areas. Maintaining a longer buying horizon for power supplies is recommended. The expected continued shortages of key components like semiconductors and mosfets suggest power supply lead times may remain at >36-weeks through 2023.
Power supply cost has fluctuated in recent years due to supply chain disruptions, shifts in demand and raw material/component price changes. Resulting price increases were up to 20 to 30 per cent depending on type, specifications and availability. In the past six months, pricing has leveled out, with fewer and less frequent increases. It is hoped this trend will continue, leading to a sustained period of stable pricing.
A strategy to navigate fluctuations in the power supply market is to partner with an authorized distributor like Sager Electronics. With a world-class line card, expansive power supply inventory and continued product investment, Sager’s technical sales team can assist in sourcing in-stock and short lead-time power supplies to meet production requirements.