Business

Prepare for Unexpected Supply-Chain Disruptions

Suggestions for construction businesses to plan for supply chain shortages.
By Dan Boaz
August 18, 2021
Topics
Business

The United States is currently facing severe supply chain disruptions. This is affecting many industries, but the construction industry has been hit especially hard. Caused by a myriad of factors that likely won’t improve soon, these disruptions are forcing organizations to rethink their supply chains.

The COVID-19 pandemic shuttered many small and medium-sized businesses as more people worked remotely. This led to a spike in sales of new and prebuilt homes, which peaked last fall. Due to a shortage of building materials, sales have slowed down. This is extremely problematic for construction companies because there’s still a high demand for buildings and the materials needed to construct them.

What’s causing this supply chain disruption?

While this is a multifaceted issue with various causes, a massive deficit of delivery drivers is one of the reasons businesses are left with fewer shipping options. North America faced a driver shortage even before COVID-19, but the nationwide shutdown slowed down commerce, forcing many drivers to go on unemployment. A lack of drivers has led to a higher trucking rate. It’s difficult to find vehicles, and drivers are asking for $4 a mile instead of $2. This has created the perfect storm for inflation in the trucking world. It will be a long time before rates return to pre-pandemic levels—if it ever even happens.

International shipping is also becoming a hassle. Ports are clogged with docked ships full of cargo that have yet to be unloaded. If construction companies can’t get supplies, they can’t meet deadlines. They must be willing to explore other options.

How can construction companies avoid supply chain issues? A growing nationwide demand for buildings means many construction businesses are running into the same problem: a shortage of building materials. Most of these companies don’t have shipping and transit departments, so they’re forced to rely on outside carriers. While it’s impossible to foresee every issue or delay, there are some ways to avoid or mitigate inventory disruptions.

1. Plan ahead
Construction companies must work in the time constraints of contract deadlines. Businesses are facing the same issues: high demand, production costs, expedited shipping and moving small amounts of products quickly.

Even a single inventory delay can be disastrous. Project managers need to plan ahead to make sure they have what they need before starting a project, even if it’s months in advance. Contractors may have to explore different vendors if they’re unable to obtain certain supplies in a given time frame. By ordering sooner, purchasing in bulk and looking further ahead, they’re less likely to encounter unexpected deficits.

The right technology can also help; using supply chain software to oversee inventory will help contractors know exactly what they have at any given stage of a project. Always think three to six months ahead and have a detailed inventory of materials needed to complete a project. This can save valuable time and resources later.

2. Explore expedited shipping alternatives
While expedited shipping options tend to be more expensive than standard freight, exclusive use vehicles can save construction businesses money over time. This means these supplies are the only items on the truck or transit vehicle, which maximizes every inch of space in that container to fit as much cargo as possible. This also requires ample planning. Instead of ordering just the supplies needed for a current project, why not order the necessary supplies for the next five or even 10 projects? Take advantage of each delivery by using all the space available in each container. This helps lessen or avoid supply shortages later.

Establish a relationship with a reputable freight company. A knowledgeable expeditor can walk contractors through all available options. This will help them understand freight shipping times and costs before emergencies happen.

Most importantly, avoid businesses that don’t offer flexibility or transparency when moving freight. Businesses should know where their shipments are at all times.

3. Keep options open
While overseas vendors may offer cheaper supplies, inventory manufactured in the United States, Canada or Mexico may be more accessible for United States-based construction businesses. While there may be a current truck driver shortage in this country, there’s an even bigger airplane shortage when it comes to international shipments.

Capacity has also changed; there’s less space available for overseas air shipments. That’s why it’s ideal to look into North American suppliers. Yes, it may be more expensive, but diversifying vendors and having a backup plan will ensure contractors are getting everything they need on time.

What’s the path to success?

Forecasting construction projects, using North American suppliers and looking into expedited shipping alternatives can help construction businesses plan for supply chain shortages. The current need for construction likely isn’t going anywhere, and organizations that prepare for this demand will stay ahead of the competition.

by Dan Boaz
An entrepreneur, innovator and logistics expert, Dan Boaz has been involved in transportation for more than 30 years. In 2007, he founded AirFreight.com, a logistics company that specializes in expedited shipping, and continues to improve the company through advanced technology and innovative strategy.

Related stories

Business
Waging War
By Matt DeSarno
Does it matter that many if not most of the contractors that engage in wage theft do so unknowingly? Not at all. But new technology solutions can help you avoid it altogether.
Business
Shipping News
By Christie Chapman
Brinkmann Constructors’ $40-million warehouse project in a new Denver-area logistics hub opens for business amid the pandemic-sparked ecommerce boom.
Business
Steady as They Grow
By Erika Walter
Business growth is never an accident. As five ABC Top Performer companies make clear, it results from a combination of tangibles and intangibles—including a proactive mindset, a commitment to health and safety and a cautious appetite for risk.

Follow us




Subscribe to our newsletter

Stay in the know with the latest industry news, technology, and our weekly features. Get early access to any CE Events & Webinars.