Himes Team Tackles Speed to Market Demands vs Supply Shortages

As the world has endured shutdowns due to COVID-19 as well as continued labor shortages, construction materials are taking longer than expected to arrive. What does that mean for our clients and the delivery of their projects? Here is what we know, and here is how Himes is overcoming some of these challenges.

We’re all dealing with material and equipment shortages on our projects. One of the unexpected impacts is paint shortage. John Morikis, CEO of Sherwin Williams stated in an earnings call back in late April: “We likely will need to take further pricing actions if raw material costs remain at these elevated levels”. A shortage experienced by Sherwin Williams (one of the largest manufacturers for paint) will likely affect other manufacturers as well. AkzoNobel notes that spray on fireproofing, paint thinners, and other similar products face the same supply and price pressures.

So, what do we do?

Recently, one of our Associates heard someone say, “change the spec, and go to one of the Home Improvement Stores.”

This may be an alternative depending on the performance required for the finish. Home Improvement retailers cater to the residential market and are selling different grades of materials at different price points. Matching the performance and durability spec for a commercial grade paint or coating to those offered at the retail center, especially for an industrial application may prove to be a challenge. One solution may be to add paint and coatings to the list of items for early procurement.

That is, if you don’t change your mind on a paint color and understand that prices are up between 10-20%.

Questions to Ask

The “paint’ shortage is due to a disruption in the supply of some of the chemicals needed in the production of paint. Could this be a fault in Texas for their inability to deliver reliable and continuous power over summer or winter? What about natural disasters like the hurricanes we’ve had this year? Or, as others have said, is it the renewable energy sources that have failed to keep up with the demand?

We know paint may be the latest on the list, but it certainly isn’t the only issue our Associates are facing.

“Currently, in Montréal and in Canada all together, we are experiencing a historically price surge for steel and a long lead time for steel products. In fact, there has been a significant rise in steel and iron prices over the past year. A steel fabricator I am working with on my project in Montréal, advised me of a 20% to 30%price increase over a period of a week. In addition to these new higher prices for steel and iron, the lead times are now historically longer than it used to be. Typically, it would take about 8-10 weeks to deliver Structural Steel, beams, deck, and joists. Now it would take between 20-24 weeks. This in part is due to COVID-19.

The initial building structure design on the project I am working on was all steel. However due all the new challenges I mentioned above, especially the lead time to procure steel, it basically to not possible to meet the lease final project acceptance date. The solution we took as a team to meet our lease milestone and final delivery dates is to switch the building structure design from steel to concrete structure for the building.”

– Ahmed Ibrahim — Sr. Project Manager Montréal, Québec.

 

“A building is only as reliable as its roofing system… it keeps the water out, houses mechanical cooling & electrical equipment, and protects everything inside the structure. Since the historic storms impacted Texas last winter, there has been an incredible impact on the production and availability of polyisocyanurate, a common insulation material for roofing (and precast panels).

Lead-times have skyrocketed to 12months+ in some cases to secure this material for construction projects. Allotments for 2022 are almost entirely booked. Alternative roofing methods such as XPS systems, have seen renewed interest as market forces deal with this situation, and construction projects adapt to the uncertainties created.

During these trying times, we advise all our Clients to leave no procurement stone unturned, and to look as far ahead as their budgets can for releasing materials early. 

No roof, no building…Mission Critical!”

– Andrew Watson — Sr. Project Manager Ashburn, VA.

As an Owner’s Representatives, we are committed to working with our clients and their entire teams to find working solutions to meet speed to market demands and keep projects moving forward. Our Teams are looking and ordering ahead, finding working alternatives, and keeping project teams focused on the project goals and delivery.

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