Boat sellers can't meet rising demand as pandemic scuttles supply chain

Boat sellers can't meet rising demand as pandemic scuttles supply chain
The showroom floor at Lodder's Marine in the Cincinnati area is normally full of boats, but this photo taken in August shows the impact of a sales surge during the coronavirus pandemic. Photo courtesy of Lodder's Marine

ORLANDO, Fla., Sept. 4 (UPI) -- Americans who sought to buy a boat this summer to escape coronavirus pandemic restrictions experienced a rude awakening: limited choices and waiting lists.

Demand outstripped supply as manufacturers dealt with sick workers and difficulties obtaining materials and components. Consumers faced virtually empty showrooms, non-negotiable prices and bigger deposits, often for back orders with no certain delivery date.


Sometimes, by the time a customer decides on a specific purchase, "someone else has made an offer and the boat is sold," said yacht broker Barin Cardenas, founder and chief executive at Yacht Creators in Fort Lauderdale, Fla.

"As soon as boats hit the floor, they're sold," said Matt Lodder, president of Memphis-based Marine Sales Group. "Lately, customers are putting down deposits on any boat, even before it arrives, just so they know they will get something. I tell them the wait can be 30 days."

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Competition among buyers means little bargaining over the price tag. Negotiations still are possible for custom-built yachts over $1 million, but not for smaller, production-line boats, Cardenas said.

And once they purchase a boat, buyers also may have to wait a week or more for an inspection because inspectors and insurance agents are overwhelmed, Cardenas said.

Boat factories sometimes can't fulfill orders because they lack essential parts, such as engine components, generators and windshields, industry observers said.

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Aside from lacking parts, manufacturers face workforce interruptions due to sick employees and freight carriers experienced service disruptions. Sometimes suppliers faced interruptions that held up production at boat factories, Lodder said.

A shortage of windshields held up construction on dozens of fishing powerboats for several weeks during the spring at Maverick Boats in Fort Pierce, Fla., about 120 miles north of Miami, said Skip Lyshon, vice president of sales.

The company makes about 20 boats per week and wants to increase that to 30 boats per week, he said. But finding some parts, such as stainless steel fixtures, engine harnesses and trim tabs, has been difficult.

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"To be honest, our purchasing department went on Amazon and eBay to find certain acceptable substitutes a few times over the past summer," Lyshon said.


The plant also faced absences due to COVID-19 exposure and positive test results, said Angie Brandt, the personnel manager. Such staff issues have limited the company's ability to ramp up production as planned, she said.

"If employees don't feel comfortable working during the pandemic, we let them take time off, and a few of them haven't returned," Brandt said. "We are looking to hire about 30 people now, and there is some competition locally for skilled labor."

Even buyers who don't want a new boat are seeing the effects of surging demand, Marine Sales Group's Lodder said. Used boats have virtually disappeared from the market.

"We've got two pre-owned boats and we typically carry 30," he said earlier this week.

Lodder's showroom in Fairfield, Ohio, has few boats to display, but prospective customers keep coming, he said. Almost half of them this year are first-time buyers, compared to an average rate of one-fourth.

Since the buying surge began, everything from kayaks to large yachts has experienced greater sales volume, said John-Michael Donahue, communications director at the National Marine Manufacturers Association, based in Washington, D.C.

A lot of the existing inventory has been snapped up, creating shortages in part because of interruptions in manufacturers' supply chains.


Powerboats for fishing, especially the cheaper models that sell for about $25,000, have seen the greatest demand, along with personal watercraft designed for one or two people, Donahue said.

"We're seeing increases in sales across the industry, essentially in every segment," he said. "The highest demand is for more affordable models -- for people who are new to the boat market."

Across the country, new powerboat retail sales were up by 59% in May compared to April, and up by 19% over last year. Sales of personal watercraft, or water scooters, jumped by 41% in June compared to June 2019, Donahue said.

Donahue's association also coordinates 25 large boat shows held around the country, Many were canceled after the pandemic began, he said.

The shows are public showcases for manufacturers, brokers and dealers. They might be good for long-range planning by consumers and to highlight upscale yachts, but they can't make basic boats any easier to obtain.

"There is some inventory out there, but it's restricted," said Matt Gruhn, president of the Minneapolis-based Marine Retailers Association of the Americas.

"Retailers are taking orders, and manufacturers are still dealing with workplace restrictions like social distancing," Gruhn said.

The spike in sales is part of a roller-coaster year. Boat sellers dealt with almost no sales in March during pandemic-related lockdowns, said Roger Moore, owner and CEO of Nautical Ventures Group in Fort Lauderdale.


As a result, he cut all 127 employees' pay to $10 per hour for a month, from the highest paid managers to clerks, rather than resorting to layoffs. He then restored pay as the pandemic restrictions eased and business returned.

"We thought the bottom was falling out of the market as everyone stayed home," Moore said. "I wanted to avoid layoffs. And then we had this sudden surge in calls and sales as people realized outdoor, distant recreation was safer."

That's because, in part, families who were confined at home realized they could still travel safely by boat and even dock at a shoreline restaurant or business, he said.

Big manufacturers like Yamaha also must cope with periodic supply chain disruptions, said Bryan Seti, general manager of Yamaha's Watercraft Group in California.

"The unknown factor is where COVID-19 will pop up next, and whether it will affect our locations or our suppliers," Seti said. "All our factories are open, but the supply chain issue is a problem sometimes. People don't know when normal will happen again."

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