Part delivery times have reduced since the UAW strike but another disruption looms with possible East Coast and Gulf Coast port strikes that could start this fall, according to Greg Horn, PartsTrader chief industry relations officer, who recently spoke during a “Collision Repair in Focus” webinar.

The International Longshoremen’s Association (ILA), representing 85,000 members including port workers on the East and Gulf Coasts, halted talks with the United States Maritime Alliance (USMX) after it learned of automated gate truck processing being used, Horn said. The contract is set to expire Sept. 30.

Horn said the strike would impact seven of the top 10 ports in the United States.

“It will impact not only the aftermarket coming in from Taiwan — because they do come through the Panama Canal to make some deliveries to the East Coast — but it’s also going to impact European manufacturing,” Horn said.

He said this would also impact vehicle components manufactured in Alabama and South Carolina.

“This is potentially the next thing to keep an eye out on and see how it’ll impact the industry,” Horn said.

Horn also dove into the impacts the industry could still be seeing since the UAW strike that happened in 2023.

He said the inflationary trend from 2020 through July 1, 2024, shows recycled parts are growing at a higher inflationary rate than OEM parts.

“That is really interesting to me because that is a part whose pricing is truly linked to the OEM MSRP,” Horn said. “That was influenced by the UAW strike and the potential worry of shortage of part components causing collision repairers to increase their utilization of salvage parts and salvage assemblies during that strike time.”

However, he said the average aftermarket part price decreased to $309 in July versus $316 seen in December 2023, he said.

In the past year, the median delivery days plus two standard deviations for parts was at its longest period in October at 14.8 days. Since the UAW strike ended, the number dropped to 9.3 days in July, which is below the 11.4 days the industry experienced in July 2023.

“The good news is that we are, since March, really trending significantly below for all part types,” Horn said.

Horn also explored the use of aftermarket versus OEM parts in the webinar.

For example, he looked at data for model years 2018-2023 of the Toyota Camry, which is the top insured vehicle for AARP, he said.

OEM part utilization for the vehicle is 58.9% he said.

“We look at this pretty dramatic drop off for this vehicle series in OEM utilization as time goes on,” Horn said.

“When you look at front lamps, in particular, this is a great place to look at if these manufacturers are putting the logo in the headlamp assembly.”

This would potentially indicate it as a part that doesn’t have a quality substitution or a CAPA equivalent.

He said that Chevrolet OEM front lamps are used 59% of the time  compared to 10% of CAPA-certified parts. Honda’s lamps are used 49% and CAPA 24%. He said CAPA parts are used 31% of the time for Toyotas.

Insurance companies often allow OEM parts only for the first 12 months or 12,000 miles, he said.

Every calendar year another 300,000 Toyota Camry vehicles hit this availability of aftermarket parts, he said.

“That’s really what’s the key to this idea of a rapid rapid decline in OEM utilization,” Horn said.

Horn also gave some collision repair data on electric vehicles (EVs) during the webinar.

EV repairs require just under 91% OEM parts compared to 66.5% OEM parts for internal combustion engine vehicles (ICE), he said.

“Most EVs are specific models and do not share a lot of sheet metal with non-EVs so they are unique parts,” Horn said. “They also have a lower percentage of repairable parts because it’s usually a lightweight aluminum or a specialized plastic.”

Horn said 21% of EVs are more likely to be drivable in a collision versus ICE vehicles.

“If you’re rear-ending somebody in an ICE vehicle you’ve exposed the air conditioning, the radiator, a lot of potential leakages, and in an EV it’s just going to be the front trunk,” Horn said.

Yet, EVs on average cost $963 more to repair versus an ICE vehicle, he said.

“That goes down to the lower repairability of parts — the specialized parts, the OEM parts — all leading to a higher repair cost,” Horn said.

IMAGES

Image courtesy of Ultima_Gaina/iSock