Who Has a Crystal Ball?

Before I get into this, I want to start us off on some great news. As most of you should have seen by now, we are starting our toy drive for the holiday season. These last couple years have been hard on many families and the ones who often suffer most are the children. We are giving a raffle ticket for every new unwrapped toy, coat, or $10 cash donation we receive. These raffles will range from gear, gauges, gift cards to cash giveaways. We would love to get all of you to help and chip in. We all have had a solid year and should take care of our community. We are also dropping off donation stations at your place of business. You can run your own incentive program to get homeowners to donate. We will do all the leg work of picking up toys and dropping them off. So please reach out for more information and let’s show the community some love. We will also be posting a ton on of this on social media promoting everyone who participates. Let’s make a difference this year! https://fb.me/e/2LTVyZAHr Click for information!!

Ok. Well, I do not think I can say anything at this point to surprise or shock any of you. I am sure you are numb at this point. One thing we all should be proud of is what we all were talking about back in April is now headlines on every news channel in America. At least we all knew what was coming.

Looking ahead we recently had a sheet metal council call with the major manufacturers in the United States and they gave their outlook on the metal economy, price increases and supply chain issues. It seems like supply is improving slightly. Now keep in mind this is raw metal, flat sheets, coils etc. We have had issues getting 60” wide metal but 48” seems to be doing decent. Price increases are expected in Q1 and possibly Q2 also. Their issues seem to be surrounded around logistics (We will talk about this later) and labor shortage. Surprise…

Our equipment manufacturer is echoing some of the same as above. We are coming off the peak season of shipments so we are hopeful this will have some time to catch up slightly. We are an optimistic group though. We fully expect a Q1 price increase on this also. Although Q1 is pretty typical for the industry.

Everything else is in line with the above items for us other than 2 major items. Insulation and flex.

Flex has not been a stranger to issues this year. I laugh when I say this because we were told that isn’t true by “certain” individuals when we first warned everyone. We may have been early, but we were not wrong. Flex is by far the biggest issue for us. We allocated flex. We took care of our most loyal customers. We strategically ordered to get more feet per truck. I promise you, we worked HARD to keep you all happy. But ultimately, we couldn’t keep up and gaps hit our inventory.

Looking forward on flex nothing major has changed. We have negotiated a deal with our manufacturer to try to increase our inventory. We have a great relationship with them (and all our vendors) and I could not imagine being in this situation with another flex manufacturer other than J P Lamborn. They are the elite of the industry. As we wait to see if our deal will work out be prepared though, a price increase is coming. It is in the double-digit range

Now to insulation. Insulation looks like it may be a real issue. This includes duct board, duct liner, and FSK duct wrap. This seems to be a raw material issue. We are always heavily loaded on these items but there is a good chance we run out for a few weeks. Get used to bubble wrap. Apparently, others have been out of duct board for a while, just judging by some orders we have sent out over the last few months. If duct board is something you rely on, please plan accordingly. By all means call us and let us know what you need but be prepared we will probably allocate and may just not have these items shortly.

Like I said above, everything else is in the hit or miss boat. Batteries to glue to heat pumps. Please plan. WAY AHEAD.

We strongly believe commercial to dominate 2022. If you have any commercial jobs next year. Start the conversations now! We need to be prepared for jobs through Q2 2022 now.

While I hopefully have everyone’s attention I want to touch on a few items. Some pertain to these issues, but one does not, but we all NEED TO TALK ABOUT IT…

If you are one of the poor souls, like me, that watch these television shows called the news you will see that shortages and price increases are dominating the air waves. Like I said we all knew this was coming, but all along we have said we don’t know when it ends. This could be argued that the more attention this gets the faster things get fixed. I hope those people are right because we could have a killer year if that happens as an industry. But I would argue it doesn’t end anytime soon.

The Los Angeles port has upwards of 60 ships waiting to be unloaded. Each ship has roughly 20,000 shipping containers on it. The Los Angeles and Long Beach port averaged about 200,000 containers unloaded per week in August. Now they are going to 24/7 operation. But this was tried earlier by Long Beach port. 24/7 for four days. It did not have enough trucks and they went back to normal operation. https://www.wsj.com/articles/l-a-port-to-operate-around-the-clock-to-ease-cargo-logjams-white-house-says-11634115601

This has forced companies like Fedex, Walmart, Costco etc to charter their own ships as a work around. Think about that for a second. What does that cost? More than it did 6 months ago I promise. https://www.wsj.com/articles/biggest-u-s-retailers-charter-private-cargo-ships-to-sail-around-port-delays-11633858380?mod=article_inline

If they unloaded every shipping container today and had normal operation starting tomorrow. These companies need to recoup those costs. Maybe as an industry we had our time and now retail is getting theirs. But I would place my chips on this isn’t over. But now nobody should have an excuse to not know.

Shop for the Holidays early, and probably cheaper now. Also, for our Toy drive!

Last thing. I feel like this has been swept under the rug with all the other issues. But refrigerant changes in 2023. Yes. You read that right. Yes, it will be a COMPLETE disaster. It is mildly flammable, as of now. Storage, transportation, training, certifications on and on.

Do not worry about this though. I want to let you know we are tackling these issues for you. We already have certifications, training and tools lined up for you. We will be reaching out soon. PLEASE follow us on social media. We work hard to keep you informed and sometimes that is best place to get answers!

As always, we are here for you. Thank you for reading.

Your Best Choice Supply Team