Material Madness: Part Two
Follow us for our five-part investigative series discussing contributing factors to the roofing industry’s current supply chain challenges. We have researched the issues and will spend several weeks highlighting the circumstances affecting material shortages and price escalations.
Part Two
Transportation
Long lead times for everything from receiving mail to purchasing a car became the norm in 2021. Transportation issues have included port backlogs, truck driver shortages, global deficit in shipping containers, and more.
Goldman Sachs estimated that $24B worth of goods are parked outside of California ports along. Ocean shipped goods have been parked at ports in the US at an alarming rate. The current administration has focused on keeping one port open for 24 hours to begin to relieve the issue. That does not address moving the containers offloaded at ports. As of November 1, 2021, 80,000 containers were sitting at the port of Savannah and another twenty-five ships were parked waiting for offload. These containers are ultimately moved by truck. This dovetails into the truck driver shortage.
According to the American Trucking Association, “ATA estimates that over the next decade, the industry will have to recruit nearly 1,000,000 new drivers into the industry to replace retiring drivers, drivers that leave voluntarily (e.g., lifestyle) or involuntarily (e.g., driving records or failed drug test), as well as additional drivers needed for industry growth. These trends do not account for the impact of potential laws that may either alter the industry dynamics positively (e.g., lower the minimum age to drive across state lines) or negatively (e.g., regulatory mandates that push drivers to exit the industry or be less efficient).”
The transportation crisis is further exacerbated by a lack of shipping containers. According to Bill Bellico of Sika, “There are not enough intermodal containers available to service the volume of goods to be shipped. Multiple factors have driven this situation including increased demand of consumer products during Covid-19, out of balance trade routes and inability of manufacturers to produce new units.” These factors not only have caused great delays but also increased costs. According to Construction Dive, the percent price change for non-residential construction services jumped the most in the area of truck and transportation of freight.
References:
What the Heck is Happening with Roofing!?
https://usa.sika.com/sarnafil/en/resource-center/news/supply-chain-update.html
5 graphs that illustrate construction's challenging year
https://www.constructiondive.com/news/5-graphs-materials-price-contractor-construction-challenging-year/609999/
Commercial property insurer FM Global spotlights six key facets of current global supply chain strain
https://newsroom.fmglobal.com/releases/commerical-property-insurer-fm-global-spotlights-six-key-facets-of-current-global-supply-chain-strain?print=1