And Here We Go

For several months Best Choice has been warning our customer base on the possible problems we all may face this year. As our peak season is very slowly starting, we are seeing some of these premonitions come true with no real end in sight.

To catch anyone up who did not read the last blog post; we are facing unprecedented supply shortages globally. This is being mixed with all time high demand, workforce shortages and low interest rates. Those ingredients have produced some issues for the global supply chain, and we are all dealing with this now.

May did not bring any real sustaining heat and although some of us are busy it should not compare to 2020 May breaking open after the initial COVID sales dip. This may end up being particularly good for us in the long run.

One item we have an issue with today is filters. Lead times are being pushed back to 60 days. We initially started this year with 15-day lead times. Keep in mind too we (HVAC industry) all had filters issues a couple years ago and never fully recovered.

Best Choice has orders from March still waiting to be filled. We are not alone here. This does not look to be getting any better any time soon. We have filters coming but we will be out.

Some of you sell or give cases of filters to customers, you may want to stop. You also may want to grab them where you can (Lowes, Home Depot, Amazon) because you will run out.

Another item we are seeing some issues with is flexible ductwork. The days of our inventory towering over us is a little different right now. We have it. We are still ordering max capacity allowed. But we are seeing lead times creep out and backorders come in.

Be prepared for upsizing your R value. Consider metal pipe. If you have a large commercial or residential project understand you MAY NOT be able to get flexible ductwork in bulk. Speaking for ourselves we are not selling bulk orders going forward. We can not afford to. This is something else I know everyone is struggling with.

Fiberglass insulation is starting to become an issue also. This will include fiberglass duct wrap, duct board and duct liners etc. Same story different material. Lead times and availability. This could possibly be a much larger issue just because you can not pivot anywhere. At some point you need to wrap or line ductwork. You have bubble wrap but that only goes so far. These items are not in as bad of shape as the others, but we believe it is trending in that area.

Who bought the R22 dip? Hopefully, you. Refrigerant is a daily mover, so we are used to swings. But these recent swings are very drastic. Our cost on R410a has increased by almost 35% in 5 months. R22 is selling for $650-$750. Do not expect this price to come down anytime soon.

Speaking of refrigerant, our equipment inventory is VERY strong as of today. We have some holes of course, especially horizontal coils, but we have quite a few boxes in stock with more coming. This is one item we place extra attention to daily. With double digit increase in equipment sales YoY we have positioned ourselves to maintain our dealer business. At this time, we are not taking on new equipment business. To our dealers, one change you will see is that for the for seeable future when you order a coil you will be required to order a condenser.

The last item we will discuss today is metal. Metal has been able to limp along for the most part. Inventory is of course not as strong as we are used to, but we have it for the most part. But apparently someone does not. I only say this because customers who do not usually visit us are starting to come around. Expect some delays in our metal shop and day to day activities. We are REMARKABLY busy right now and just like everyone else shorthanded.

2021 The Year of Inventory. Shortages are not good but what follows them makes everything increase. More are coming.

All items we discussed today are up at least 12%. We will be increasing prices on some of these items within 30 days. You didn’t think metal could go up anymore? Well, it has not yet. But we are expecting an August or September increase. Not sure exact amount as of today.

One thing that would really help alleviate the shortage issue is employment. Again, staying as far away from politics as possible we are speaking only what we know, and we believe. The May jobs report added 559,000 jobs. Seems good right? Eh. Not great. Majority of jobs added were from business that suffered the most during COVID. Restaurants added 186,000 jobs by themselves.

Construction and retail shrunk in employment, not good. They missed the estimated jobs number by 100,000. Unemployment is still around 5.8% and that is after roughly 8million jobs were wiped out from COVID. We have a long way to go. Hopefully with lifting restrictions this rate will increase in June and July.

As we move forward, we will continue to update you with what we know. For the customers who have remained loyal to us, I am here to say we will remain loyal to you. We WILL protect your inventory the best we can. We are turning down business unfortunately just to keep items for customers who we know may need them soon enough.

Please watch your pricing this year closely. Some of you can not absorb these price increases. The whole world has raised prices. It is ok for you to as well.

If there is anything we can do please let us know. We are here to help. Let us be your partner in these strange times. As always thank you!

Best Choice Supply Company