State of the market letter : Shortage of Material
It’s not news that the year 2020 has brought about more changes and disruptions than any time in recent memory. Every day there are reports of lumber shortages, price increases, freight and rail issues, etc. We have received notices from several of our suppliers.
“We are seeing first-hand the shortages of raw materials. These shortages will almost certainly result in increased prices of raw and finished goods over the next few months. We have already seen prices begin to increase and anticipate market prices will continue to increase over the next several months. These increases are simply microeconomic factors at work” excerpt from Northwest Hardwoods notice
Roseburg reports “due to critical supply chain disruption (of MDI resin) we will be put on allocation immediately. This will impact our business over the next 6-8 weeks as we will be running at 50% capacity. Until we are running at full capacity, we will not be entering any new orders.”
In a recent article on Builder online that addresses lumber as it pertains to home builders, “Average lumber prices have surged more than 170% since mid-April, reaching a record high over $800 per thousand board feet.”
On the freight side of things, “Productivity at the 12 container terminals in LA-LB is expected to diminish further, chassis shortages will intensify, drayage capacity will be stretched to the limit, and import distribution warehouses throughout Southern California will be even more challenged in moving product to stores and regional distribution facilities throughout the country” according to an article by Bill Mongelluzzo, senior editor with The Journal of Commerce.
The news and articles can become overwhelming. The bottom line is that we are working hard to continue supplying our customers with the products you need, when you need them. Unfortunately, that will almost certainly mean an increase in prices and freight, and possibly substitutions as needed, but we promise to be transparent and will let you know when these situations arise.
As always, we appreciate your business and look forward to our continuing partnership as we all work through these unprecedented times. Feel free to reach out to us if you have any questions or concerns.