To all our customers: 

The last eighteen months have been trying for all of us.  We're sure you have heard lots of news regarding the state of our industry and the economy in general.  We'd like to share with you what things look like here at Pacific Western, good and bad, what we've heard, and what we experienced.

It is now routine for our suppliers to raise prices.  Costs are going up for many reasons. For example; The cost of transporting goods from overseas is seeing unbelievable increases because there was a downturn in demand in early 2020 and older container ships and containers than usual were scrapped.  New containers, as well as new ships, will continue to come on line.  They are being built at a higher eco-friendly standard using natural gas instead of diesel making them cleaner to run but more expensive to build.  Unfortunately, it is the customer who will experience the higher costs. 

Arrival times of shipments are unpredictable.  One manufacturer called and apologized to us saying a container that should have arrived last January, for some unknown reason, just arrived in July.

Covid-19 also caused port delays, both overseas and domestically, causing ships to come and go less frequently making container space on ships less available.  So right now, container space is at a premium.  For example, one supplier told us in March of 2021, a 40' container cost $4,600 to import, the same container now costs $16,500 in July and in August it was $26,000.  Not only did costs skyrocket but delays are becoming the new norm. 

Domestic suppliers are facing challenges as well and are unable to evade rising costs.  On July 1st of this year, we were notified by one distributor that, overnight, they were raising prices on more than 12,000 items from various manufacturers.  

No doubt many of you heard about the shortage of semiconductors which are used in all kinds of electronic items that we use every day, including locomotive models which affect our industry.  One manufacturer told us they purchased a twelve-month supply of chips and currently they have a five months’ supply left.  After soliciting primary and secondary suppliers, they still did not find a source for additional chips and are very concerned because those suppliers have no idea when additional chips will become available.  Another one of our manufacturers just announced that the next batch of engines they are producing will be priced 30% more than the last batch they built. 

We carry about two million dollars worth of goods on our shelves, so we are well stocked to supply you and we are not changing the prices of locomotives and rolling stock currently on our shelves.  We will do our best to cushion the effects of the increases but there is a limit to our ability to absorb the extra costs. 

Remember costs are going up, delivery schedules are unpredictable and if you want something as a gift during the holidays, you need to order now.  We cannot stress enough the importance of ordering as soon as possible.

Thank you for your continued loyalty to PWRS,

---