My neighbor owns a boat building company (mostly flats type bay boats). He is also a regular contributor for a local weekly paper. Here is a recent article that may be of interest to those in the market for a new boat. Or boat stuff.
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Here We Go Again!
BY: DOC
About 40 years ago, I built my first boat using fiberglass and have been doing it ever since in one way or another. Over those same years there were obviously price increases in raw materials. Normally, those price increases were very small, almost insignificant, but there were a few times during fuel crisis’s, gas shortages and spikes in the price of oil that led to more significant increases, where sometimes we’d see increases on a weekly basis over a period of a couple months. Well, here we go again, but this time it’s going to go down in the record books!
Back then, those increases were usually a few cents a pound and might have equated to 5% to10% or so over a period of time. In the mid 1990’s there was a series of increases that rattled the industry like never before, but the price increases over the last 6 or 7 years made all those previous ones look like a small bump in the road. During that same period of time when I’ve been writing this column, I’ve warned boaters, and want-to-be boaters, to buy a boat at that time because of impending price hikes, and each and every time that’s exactly what happened. Boats, fishing rigs, have basically doubled in price over the last 4 to 6 years. Where the average price for a nicely rigged 17 footer back then was around $17,000, today it is closer to $30,000 or more. Unfortunately, tomorrow is going to be a very different story!
What has driven the price of a boat up so high, and everything else for that matter, has been the price of oil since all of the raw materials, parts, rigging and whatever are either made directly from oil, or oil/fuel was needed to heat or melt the material during the manufacturing process. Of course, the costs of transportation and shipping went up as well. Also, wars, the economy and world-wide financial meltdown, environmental legislation and ridiculous emissions standards have contributed to even higher costs, but don’t get me started on that one.
Just to give you an idea of how various parts of a boat have increased in price, in just the last couple of years a fuel tank that cost $200 is now $400, a fuel gauge that was $23 is $42, fuel line has doubled, marine copper wire quadrupled, fiberglass resin is up 90%, a stainless steel railing stanchion was $13 and is now $22, a stainless steel Destroyer style steering wheel used to be $45 but now costs $86, white gel coat was $1.12 a pound at wholesale price and is $2.85 a pound today, a 14” galvanized trailer wheel was $30 but is $85 or more today, and the list goes on, and on. If you’re thinking that what has happened so far was a bad dream, well here comes the nightmare!
On or about, April 6, 2010 my E-mail inbox was suddenly nearly full, and I suspect that was the case with most all fiberglass and composites distributors, auto makers, boat builders, plastics companies and custom fabricators world-wide. At first, I gazed over the list of senders, and each one was from a manufacturer of fiberglass, composites or other related products and I suddenly had a sick feeling in my stomach as I knew it had to be price increases. Sure, I’d seen increases in the past, maybe one or two at a time with more occurring over the next month or two, but never before on about 100 products all at one time!
I opened the first notice, then the second and by the time I got to the last one, I was in complete disbelief of what I was reading. It was almost like each price increase notice was written by the same person. However, instead of the increases being a few cents a pound, which in the past might have been equal to _ to 2 percent, there was no mention of a couple cents a pound. This time, the manufacturers were talking in percentages, with the average increase being 7% to 12%, and a few as high as 20%. Remember, these increases are at deep wholesale prices, not retail!
The reasons given for these record breaking price increases were basically all the same. Due to economic conditions, price of oil, financial and credit restraints, and reduced demand and inventories, these manufacturers stated that “they were experiencing unacceptable margins” (not making a profit) and to continue to produce their products, price increases were mandatory. For example, Owens Corning, a huge company, stated that they threw over a $100 million dollars at the problem and it didn’t solve a thing, so they were announcing increasing most prices by 20%. You can only imagine what the smaller companies must be experiencing.
After my vision cleared, I phoned a couple of these manufacturers to inquire if this was a one-time deal, or if they thought there might also be more increases coming over the next few months. You don’t want to hear what they said, but if you’re thinking about purchasing a boat in the near future, it would be in your best interest to do it right away, and here’s why.
How this first round of nightmarish, record breaking price increases will affect the price of boats is anyone’s guess, but if it continues to follow the paths of previous price hikes, within the next month or two, we could see the price of not only new boats, but also boat repairs and anything else that has to do with plastics, paint and you name it, go up at least 20%. To make matters worse, August 1st marks the new 2011 model year changeover for new boats, motors and trailers, and you know what that means.
So, let’s say that you’ve had your eye on a new fishing rig that retails for $30,000, and the dealer is offering you a fantastic discount of 15%, which means you can save $4,500 and get it for $25,500. That’s a great deal, but if you were to wait, say a couple of months, that exact same boat could be upwards of $36,000. If that dealer is still willing to give you a 15% discount, the price you’ll pay will be higher than the full list price had you just purchased it sooner. Just remember the old saying, “the early bird gets the worm”!
Oh! And if you’re thinking that once these price increases slow down or are over with, that prices will once again go back down, don’t count on it, because when gas went up to $4 a gallon and oil hit $140 a barrel and both came back down, the prices of these materials that we’re talking about didn’t drop a dime!
The only good news I can offer you today is that the weather seems to be improving, waters are becoming clearer and cleaner, and the fishing should get better very soon, if you already own a boat. If not, you might want to get out and get one before the other shoe drops!
AS ALWAYS, STAY SAFE & HAPPY BOATING!!!
---------------
Here We Go Again!
BY: DOC
About 40 years ago, I built my first boat using fiberglass and have been doing it ever since in one way or another. Over those same years there were obviously price increases in raw materials. Normally, those price increases were very small, almost insignificant, but there were a few times during fuel crisis’s, gas shortages and spikes in the price of oil that led to more significant increases, where sometimes we’d see increases on a weekly basis over a period of a couple months. Well, here we go again, but this time it’s going to go down in the record books!
Back then, those increases were usually a few cents a pound and might have equated to 5% to10% or so over a period of time. In the mid 1990’s there was a series of increases that rattled the industry like never before, but the price increases over the last 6 or 7 years made all those previous ones look like a small bump in the road. During that same period of time when I’ve been writing this column, I’ve warned boaters, and want-to-be boaters, to buy a boat at that time because of impending price hikes, and each and every time that’s exactly what happened. Boats, fishing rigs, have basically doubled in price over the last 4 to 6 years. Where the average price for a nicely rigged 17 footer back then was around $17,000, today it is closer to $30,000 or more. Unfortunately, tomorrow is going to be a very different story!
What has driven the price of a boat up so high, and everything else for that matter, has been the price of oil since all of the raw materials, parts, rigging and whatever are either made directly from oil, or oil/fuel was needed to heat or melt the material during the manufacturing process. Of course, the costs of transportation and shipping went up as well. Also, wars, the economy and world-wide financial meltdown, environmental legislation and ridiculous emissions standards have contributed to even higher costs, but don’t get me started on that one.
Just to give you an idea of how various parts of a boat have increased in price, in just the last couple of years a fuel tank that cost $200 is now $400, a fuel gauge that was $23 is $42, fuel line has doubled, marine copper wire quadrupled, fiberglass resin is up 90%, a stainless steel railing stanchion was $13 and is now $22, a stainless steel Destroyer style steering wheel used to be $45 but now costs $86, white gel coat was $1.12 a pound at wholesale price and is $2.85 a pound today, a 14” galvanized trailer wheel was $30 but is $85 or more today, and the list goes on, and on. If you’re thinking that what has happened so far was a bad dream, well here comes the nightmare!
On or about, April 6, 2010 my E-mail inbox was suddenly nearly full, and I suspect that was the case with most all fiberglass and composites distributors, auto makers, boat builders, plastics companies and custom fabricators world-wide. At first, I gazed over the list of senders, and each one was from a manufacturer of fiberglass, composites or other related products and I suddenly had a sick feeling in my stomach as I knew it had to be price increases. Sure, I’d seen increases in the past, maybe one or two at a time with more occurring over the next month or two, but never before on about 100 products all at one time!
I opened the first notice, then the second and by the time I got to the last one, I was in complete disbelief of what I was reading. It was almost like each price increase notice was written by the same person. However, instead of the increases being a few cents a pound, which in the past might have been equal to _ to 2 percent, there was no mention of a couple cents a pound. This time, the manufacturers were talking in percentages, with the average increase being 7% to 12%, and a few as high as 20%. Remember, these increases are at deep wholesale prices, not retail!
The reasons given for these record breaking price increases were basically all the same. Due to economic conditions, price of oil, financial and credit restraints, and reduced demand and inventories, these manufacturers stated that “they were experiencing unacceptable margins” (not making a profit) and to continue to produce their products, price increases were mandatory. For example, Owens Corning, a huge company, stated that they threw over a $100 million dollars at the problem and it didn’t solve a thing, so they were announcing increasing most prices by 20%. You can only imagine what the smaller companies must be experiencing.
After my vision cleared, I phoned a couple of these manufacturers to inquire if this was a one-time deal, or if they thought there might also be more increases coming over the next few months. You don’t want to hear what they said, but if you’re thinking about purchasing a boat in the near future, it would be in your best interest to do it right away, and here’s why.
How this first round of nightmarish, record breaking price increases will affect the price of boats is anyone’s guess, but if it continues to follow the paths of previous price hikes, within the next month or two, we could see the price of not only new boats, but also boat repairs and anything else that has to do with plastics, paint and you name it, go up at least 20%. To make matters worse, August 1st marks the new 2011 model year changeover for new boats, motors and trailers, and you know what that means.
So, let’s say that you’ve had your eye on a new fishing rig that retails for $30,000, and the dealer is offering you a fantastic discount of 15%, which means you can save $4,500 and get it for $25,500. That’s a great deal, but if you were to wait, say a couple of months, that exact same boat could be upwards of $36,000. If that dealer is still willing to give you a 15% discount, the price you’ll pay will be higher than the full list price had you just purchased it sooner. Just remember the old saying, “the early bird gets the worm”!
Oh! And if you’re thinking that once these price increases slow down or are over with, that prices will once again go back down, don’t count on it, because when gas went up to $4 a gallon and oil hit $140 a barrel and both came back down, the prices of these materials that we’re talking about didn’t drop a dime!
The only good news I can offer you today is that the weather seems to be improving, waters are becoming clearer and cleaner, and the fishing should get better very soon, if you already own a boat. If not, you might want to get out and get one before the other shoe drops!
AS ALWAYS, STAY SAFE & HAPPY BOATING!!!
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