Following a season of heavy storms in areas of the Midwest and the rollout of manufacturer price increases nationwide, many dealers reported current or anticipated difficulties in securing product in quantities large enough, and in the required time frame, to meet customer demand.
Joe Corah, commodities division manager at Do it Best Corp., said that many member locations placed heavy orders in the fourth quarter of 2011 and the first quarter of 2012 fearing that a replay of last summer’s allocation periods would leave them with insufficient inventories to meet another round of storm-centric demand. This year’s story adds another dimension with the industry-wide announcement that shingle prices would rise during the first quarter to keep up with increases in raw material costs, along with a general uptick in residential remodeling that Corah says is seeing more consumers replace their roofs.
The result: increased ship times and limited product availability, particularly in the Midwest, where some dealers don’t expect the product availability to normalize until late summer.
Roofing Supply Group, No. 7 on this year’s ProSales 100, is keeping its customers updated on the price increases through itswebsite, which links to releases sent by seven roofing products manufacturers detailing their respective price increases and start-dates, which range from 5% to 10% and have been implemented as early as March 1 and as late and June 1. The roofing products manufacturers that ProSales reached out to were not available for comment.
Pat Jennings, Roofing Supply Group’s Midwest district manager, also notes that the compound demand is affecting Midwestern dealers. “It stretched us,” he said. “It was beg and borrow to try to fill orders. The manufacturers did find ways to get product into the market.” He said that roofing product demand doubled from a year ago in the areas hit by storms.
Despite consecutive, damaging storm seasons, Mike Wuerdeman, a buyer at Springfield, Mo.-based Herrman Lumber, said his inventories are stable for the time being. “We bought awfully heavy in the winter and it really hasn’t affected us,” he said. “We had everything out of inventory. Our vendors also bought really heavy.”
Mike Schwarz, marketing director for ABC Supply, No. 1 on the 2012 ProSales 100, accredited the higher demand to slightly warmer weather, adding that the company didn’t adjust its winter buying habits in anticipation of spring and summer allocations. He said that some ABC Supply locations experienced extended ship times, but to no great extent.
Yet Wuerdeman and other dealers who say they’ve yet to be affected by the side effects of the excessive demand aren’t entirely optimistic for the near-term. A roofing dealer in Omaha, Neb., who bought heavier in 4Q 2011, says that the uptick in demand following local storms could lead to another period of allocations. Manufacturers “can only produce so much,” he says. “If demand is there for it, they’re in the driver’s seat.”
According to Corah, this is already contributing to delayed and staggered ship times for new orders as manufacturers work to keep pace with demand in part by pulling extra product from non-affected regions. “It’s not like all the orders are getting shipped in four to six weeks,” he says. “Some of them are five to eight weeks.” Meantime, he reports that some of his members are looking outside their area for manufacturers and distributors who have product on hand, even if it means paying a premium.