Panel Addresses the Supply Chain at SWACCA Meeting
A panel of speakers representing manufacturing, distribution and contractors discussed the current supply chain issues facing the industry at the South West (Florida) Air Conditioning Contractors Association (SWACCA) meeting held June 8, 2021 at the Embassy Suites in Estero, FL.
Contractors have been faced with equipment and supplies shortages, price increases and unpredictable delivery schedules for months with no end in sight. The onset of the summer cooling season will only add to the severity of these conditions. Zac Myers of Daikin, Dennis Nelson of Baker Distributing; and Dave Johnson of B&I Contractors shared their perspectives on the supply chain issues with the SWACCA members.
Dennis discussed price increases and shipping delays as two of the biggest problems distributors face.
“We’re seeing a lot of disruption in the market but the biggest thing is price increases,” he stated. “We used to have them in the beginning of the year, 3% to 7%. Now, we’re seeing up to 15% increases every couple months. Another big issue is shipping. A truck driver shortage has led to a bidding war for trucking services, driving prices up even more and wreaking havoc with scheduling.”
Dennis added that Baker’s large buying group is working as hard as they can on producing accurate forecasts, anticipating lead times and shifting purchasing to provide substitutes where possible.
“What I suggest for contractors is to work with your distributor salesperson and try to plan ahead as much as you can,” he concluded.
Zac addressed supply and demand and emphasized planning as well. “We’re facing a situation where the economy is on fire and we’re seeing a shift in population to southern states. So the problems on the supply side are being amplified by the needs on the demand side. We have some good opportunities once we get through the supply issues if we plan ahead for it. The supply chain is doing its best to catch up with the demand. We need you guys to plan as much as possible. Last year we adjusted production to manufacture more of the popular equipment but demand is starting to outstrip us again. With multi-family projects you’re going to have to get way out in front with your planning.”
Dave spoke about some of the difficulties contractors face trying to plan for the future. “As a commercial contractor, we’re seeing the price increases for our supplies across the board. Quoting projects is extremely difficult with costs rising so rapidly. And when the materials are three months out on deliveries it becomes even tougher. Our metal shop has been drastically impacted. We used to buy metal in 10,000 pound rolls and now we’re limited to one-tenth that amount in purchases, much of it as flat steel. We’re set up to manufacture from coil lines so adapting has been a challenge. Hopefully, there’ll be some slacking up on what we’re seeing but right now it’s scary. We’re hoping we have enough metal to complete the jobs we’re committed to.”
SWACCA Executive Director Cheryl Harris closed the meeting highlighting some excerpts from a recent Cotney Law Group seminar on the supply chain. “As contractors, you have to be certain you have a hold harmless clause in your proposals and quotes addressing schedule disruptions due to causes beyond your control and possibly shorten the expiration dates for the quotes.”
For information about SWACCA and their programs, visit www.sw-acca.org.