As a leading provider of load handling systems, any major event in our industry, from materials to new safety measures, makes us take notice. The 2018 announcement of tariffs on steel imports is no exception.
President Trump has recently proposed a 25% tariff on steel imports from foreign countries to the United States. This means that foreign countries will have to pay more – significantly more – to deliver their steel through the US borders. According to the Commerce Department, one third of the 100 million tons of steel that is used by American businesses every year is imported – so this is obviously an extremely impactful decision. And it’s a decision that will most likely cause steel materials overall to become more expensive.
Potential for Decreased Production
While the goal of the tariff is to promote the sale and use of US-sourced steel (which has had difficulty competing with imported prices), the tariff is expected to raise the overall price of steel. And perhaps the most significant side-effect of that increase is that it could trigger a subsequent decrease in the production of steel goods. And that’s where Permadur and our customers must pay close attention.
According to Fortune: “The higher price of steel will also impact the construction industry, which uses the material for beams, and the oil and utility industries, which rely on steel pipelines to build the energy infrastructure that serves American consumers. As a result, there will likely be fewer goods made in the U.S.and fewer workers hired to produce them.”
In other words, difficult times may lay ahead. The outcome predicted in the quote above represents a worst-case scenario, and it is one that all companies should seek to do everything possible to avoid. The most clear answer is that companies must dedicate themselves to…
Controlling Production Costs (and here’s how can Permadur help)
If the price of materials increases, companies will need to adapt and cut their production costs any way that they can, in order to stabilize their own costs & protect their bottom line. On one hand, finding production efficiencies can help mitigate the impact of increased material costs & help to preserve your profits. And on the other hand, maintaining as stable pricing as possible could not only help retain existing customers & demand – it may provide you with a significant competitive advantage over other providers and help attract new business.
Permadur’s magnet lifting systems provide numerous cost-cutting advantages:
- Use Staff Efficiently: Many of Permadur’s magnet and lifting systems are designed to be operated with ease by one person. By using a lifting system that does not rely on multiple operators, businesses can reallocate manpower to other tasks or even potentially reduce the number of staff people required to be productive on any given shift.
- Reduce Risk Exposure: Permadur’s lifting systems are among the safest & most reliable on the planet. With benefits such as their ability to continue to function even if a facility loses power, Permadur can help reduce workplace injuries as well as injury-related costs such as loss of production, potential litigation, increased insurance costs, etc.
- Reduce Energy Costs: Both Permadur’s magnet & vacuum lifting systems feature extremely low energy consumption, so your facility can significantly lower those nauseating electric bills.
- Use Space & Equipment Efficiently: Beyond merely building, installing & servicing below-the-hook lifting systems, Permadur’s staff includes experienced engineers who can help design an entire system that is custom-fitted to optimize how your individual facility can be used. We will evaluate your operation, space, processes, and staff, and determine how to configure your production space, equipment, and staff in such a way that you can realize the maximum potential of your facility. By eliminating waste & operating at peak efficiency, you’ll simultaneously reduce costs and increase production capacity.
No matter the headlines, it will always pay to have safe, efficient, cost-effective operations
The news (or “fake news,” depending on your point of view!) will always be fluctuating and markets will never be perfectly predictable. Whether due to these new steel tariffs or other unforeseen factors yet to come, manufacturers should anticipate and defend against rising costs of materials. And the best defense against those costs is to have an operation that operates at peak efficiency, with impeccable safety, and the wisest possible use equipment, manpower, and space.
Permadur’s material handling systems are specifically designed to move steel and other materials in a safe and cost effective manner, ultimately providing businesses working with steel to maximize productivity while minimizing costs and staff. While the steel industry may be bracing for some changes in the coming months, our below-the-hook lifting systems will continue to be a dependable rock (the name means permanent & durable, after all) as one of the industry leaders in safety and cost effectiveness.