Monday, April 12, 2021

Supply chain shortages

Don went to our local hardware store last week. While there, he fell into conversation with another customer who happened to be an electrical contractor. The contractor mentioned how he was unable to obtain the plastic switch, plug, and junction boxes that are essential to modern home wiring – and which, incidentally, are required by code.

This meant the contractor was delayed in fulfilling his own contractual obligations, which as you can imagine was as frustrating for him as it was for his customers. This is just one example of supply chain shortages that have been cropping up everywhere.

There's an organization called ISM® (Institute for Supply Management) that has a fascinating report on what's going on at the ground level for the supply chain. (I am reprinting some of their data with written permission from their Research & Analytics Manager.)

In the category of "Electrical Equipment, Appliances, and Components" (meaning, for such items as the junction box shown above), respondents are desperate: "Things are now out of control. Everything is a mess, and we are seeing wide-scale shortages."

For the category of "Wood Products," respondents are saying, "Prices are rising so rapidly that many are wondering if [the situation] is sustainable. Shortages have the industry concerned for supply going forward, at least deep into the second quarter."

This February ISM® report has many informative breakdowns in the supply chain. It has a long list of commodities going up in price (which includes, well, pretty much everything), commodities going down in price (which listed one item: dairy), and commodities in short supply: "Acetone; Aluminum; Computer Displays/Monitors; Corrugate; Corrugated Boxes; Electrical Components; Electronic Components; Freight – Ocean; Isocyanates; Methacrylate; Personal Protective Equipment (PPE) – Gloves); Plastic Products; Polypropylene; Propylene; Semiconductors; Steel; Steel – Cold Rolled; Steel – Hot Rolled (4); Steel – Specialty; and Steel Products."

A ZeroHedge piece entitled "There Is A Shortage Of Everything And Prices Are Soaring: What Happens Next" discusses many aspects of the supply chain and includes useful charts. Referencing one chart put out by Goldman Sachs, they state: "One striking feature of these reports is that supply chain disruptions are 'very widespread' and although the semiconductor shortage and its drag on auto production has garnered significant attention, Goldman economist Jan Hatzius notes that many other consumer goods – from headphones to sofas to roller skates – have also faced supply challenges this year."

They give two reasons for the disruptions:

  • "First, manufacturers were caught off guard by a faster-than-anticipated recovery in demand and hadn’t ordered enough inputs in advance to meet production needs.
  • Second, the increase in goods demand while transportation services are limited by the virus has led to an undersupply of shipping containers and congestion problems at West Coast ports, resulting in lengthy shipping delays."

Right now the semiconductor shortage is getting the most press – it impacts a tremendous number of industries – but make no mistake, lumber and junction boxes and steel are just as important. So, for that matter, are canning supplies.

Even more alarming, there appears to be a one-year delay on network router orders as the chip shortages worsen. This means internet service providers could be directly impacted. Think how much business is done via the internet, and you'll start to grasp the scope of the problem ... a problem that has been exacerbated by the millions of people now engaged in remote work.

Some think the supply chain is being manipulated to create artificial shortages. Others maintain it's just a natural fallout of pandemic closures, disruptions, and transportation issues. Most authorities believe it's a bottleneck situation that will ease with time.

But whatever the source or the reason, the effects are very real; so much so that Biden (a man without the slightest modicum of business experience) recently signed an executive order calling for a review of the global supply chain.


Here in our new home, we're in the planning (and in some cases, early construction) stages of a vast number of projects to turn this property into a self-sufficient homestead. We find ourselves having to get very creative when it comes to supplies and materials, and are in the process of scrounging or purchasing second-hand or "freecycling" various components. Clearly this is good for our budget and it encourages us to think outside the box; however it's also helpful that nothing we're building has to be up to "code."

We've been trying to purchase a unit of both OSB (oriented strand board) and 2x4 lumber, and – here's the thing – we can't. Our local hardware store simply cannot get lumber in any quantity. This morning Don was quoted a price of $60 for a single sheet of OSB. So, unless and until some creative alternatives come available, many of our projects will have to be put on hold.

So what I want to know is how all of you, dear readers, are dealing with supply chain issues. What shortages have you experienced? What work-arounds have you come up with? What creative alternatives have you tried? Your experiences will help everyone.

36 comments:

  1. Homesteaders might find that it pays to start building with logs again. That's only said HALF in jest.

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  2. For lumber, if you can source saw logs and someone with a sawmill (portable or otherwise) you can get lumber sawn to your specs. I got lucky last fall and this spring that the guy who'd done a bunch of milling for us had some lumber on hand. He'd been paid by the person who wanted lumber, stored it at his place and the people never came to get it from 11 years go. Sure, some was junk and Pete threw those in for free. With a new barn there's tons of projects that can use up those odds and ends. My cows don't care...

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  3. Patrice, I read about the router delay today. Routers are commonly enough needed item that if that is true, it will significantly impact many, many businesses.

    I was in the local Large Box Construction store yesterday. I did not note any significant gaps, but then again I was not looking too hard.

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  4. Can't predict the future, but we have a metal fabrication shop and have already been informed of our suppliers having "limits" put on them though at this point they are reasonable. Also since new admin. substantial price increases. The other part of shortages (in addition to the 2 reasons listed) is that we as employers are up against $1096/week unemployment. There are help wanted signs everywhere from fast food to professional fields. How do you control people? - make them dependent on you. (stepping off soapbox)

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  5. One of our kids and their spouse have been looking to buy a house or some land to build a house. They decided not to build, and I'm glad now that they did. Who knows what the cost would be by the time they were done?

    The housing market is crazy. They wanted some acreage, and not something real fancy (ie expensive). They looked at several homes that were sold after their first day of showing. They will close next month on a house on 15 acres. The seller was motivated (health issues), and they were able to get it for less than asking price only because it needed some work done that they are willing to do. Now I hope they can get the materials they need to do some repairs.

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  6. We are purchasing a small sawmill to mill our own lumber. We do have an Amish community near, that has a lumber yard. OSB and Plywood are a big problem, however. The canning won’t be a problem for us, as we purchased tattler lids from your suggestion, years ago...thanks!

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  7. I needed fence posts to replace/repair a poorly done section of fence and put in privacy fence. None to be had since last summer. So until they are available again and affordable, I'm using 7' steel posts and privacy screen behind the problem area.
    Same for another problem area where I was going to put a pergola, except that is 10' posts and bamboo fence.
    I'm looking for large bamboo to treat and make landscape edging with since landscape timber has been out for as long.
    Just one step at a time, as things come along.

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  8. I retired after 50 years in the construction industry. We had a lot of ups and downs mainly due to China buying up materials in the early 2000's. For one major project valued at 129mil we actually pre-bought steel studs, drywall and electrical wiring by the warehouse anticipating the shortages. Shortly after that suppliers would quote you a price for then and then only, place the order or loose.

    I can't imagine how bad it is out there now. I'm generally not a conspiracy theorist but dang if everything going on now doesn't look like one.

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  9. went with a neighbor to the big box lumber/hardware, etc store. She needed to replace some paneling that had warped. Wanted Luan. No luck unless she wanted a door or a half sheet (she needed 8 full-size sheets). The paneling that she found that would work had gone up in price $9 per sheet (now $30 per sheet) in the past week. Went to the other big box lumber/hardware, etc. store. Wound up buying birch plywood and paying $28.00 per sheet. That was after she asked. The tag actually said $48.00/sheet.

    Plenty of empty racks in the lumber area.

    kathy in MS

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  10. This is what WAR looks likE. Plan accordingly.

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  11. I worked for a small wood manufacturing business and it is not just OSB or plywood that there is a shortage of but MDF board too. Our supplier told us last week we had purchased the last of their monthly "allotment" the week before and they didn't know when they would get anymore in. It could possibly be months. And vendors won't even give you a quote because the prices are rising daily, if they have any product in the first place. And here in the Western New York area you can't find bicycles,and furniture and appliances are taking 6-8 months after ordering before they come in. And canning lids,haven't seen any of those for over a year. I am starting to see packs of jars that come with lids but can't find packs of lids anywhere. Its interesting to see what shelves are empty for that week when going shopping!

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    1. Have been seeing some regular lids at walmart. Few jars regular mouth. But not many and not at all the walmarts lately.

      They are only Ball brand. Most of what I see are the plastic lids and the ones for fermentation (?). And some very expensive small imitations of regular canning jars. Of course, they are not for canning as you cannot get a lid for them.

      kathy in MS

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    2. There is no evidence that Joe Biden was taking money from China. As reported by the WSJ. Facts matter.

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  12. This is discouraging since I need new seats in four chairs so I can upholster them for our use. The cost of plywood will make the free chairs expensive!

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  13. Post Alley CrackpotApril 13, 2021 at 12:51 AM

    So let's talk about the supply chain elephant in the room: prices went up because more money went seeking fewer goods, and a lot of that came out of the 3D money printer known as the Fed.

    A high tide of surplus money raises all of the ships full of garbage just as much as it raises all of the rest of the fleets full of stuff you need.

    "... the supply chain is being manipulated to create artificial shortages ..."

    This had to come out of the Zero Hedgies.

    Nobody else could be ignorant enough to have already forgotten what happened in the Suez and what had happened before that in Texas.

    You're not in control of this ride, you're just on it, because nobody with power wanted to stop the Big Government Fat Kid from printing his own coupons for free jelly doughnuts.

    And now everyone else gets to be punished for it.

    While we're on the "Full Metal Jacket" theme, how long before we can expect the "blanket parties"?

    Asking for a friend. :-)

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  14. Patrice and Don, no one can anticipate ALL of their ever-changing needs. But most of us who followed Rural Revolution and acted on your advice and example are infinitely better prepared. God Bless You.
    Montana Guy

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  15. And most of America won't give a hoot until the shortage turns out to be toilet paper... sad but true. Go figure.

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  16. I am fairly certain that President Biden has lots of people around him with business experience providing expertise in this area. And I do not believe he has ever declared bankruptcies...

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    1. You are probably right...he just takes big bucks from China instead.

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    2. Biden has never declared any bankruptcies because he has never ran any business of consequence. He's spent the last 5 decades sucking on the taxpayers teat.

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    3. Post Alley CrackpotApril 16, 2021 at 9:53 PM

      Taxpayer Teat, the widely acclaimed source for Government Cheese, ask for it by name! :-)

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  17. 1/2" OSB is available are at the Home Despot here in Lower Michigan for $35 a sheet. However, other lumber products are unpredictable in terms of availability, and much higher in price than last year...(we couldn't get treated 2x4s for weeks - we had to show up the morning they got a shipment or it would have been gone). In order to finish the lofts in the barn and finish framing the basement, we are going to need more lumber than we currently have... or we are going to frame the basement with steel. At this point, the prices are similar, which is quite a change from when we first priced out both options two years ago. I expect as soon as we are released from quarantine (3/4 of us have the 'Rona - it's been a 12 day head cold, nothing more), we will be trying to bring home another load of whatever lumber we can get for these projects.
    XaLynn

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  18. I work for a local Home Depot. The supply chain is well and truly broken. And while I'm seeing bits and pieces of recovery in some areas, other areas are only getting worse and worse. Don't slack on your preps folks, its not going to get better any time soon.

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  19. 3/8 OSB was 48 dollars a sheet this weekend in Portland Oregon. Crazy, but I needed two.

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  20. Our son has been saving for years to have a small addition added to his house, just a couple of rooms. His contractor quoted him $66,000 in December but said that it was too wet to do the work. Now it is dry enough but the price has jumped to $100,000.

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  21. Here in NE Wisconsin lumber is hard to find. If you can get it it's very expense. We built 3 years ago and I recently spoke with our builder who said our lumber package alone would be at least 50% higher than when we built. Shortages in other trades as well.

    I dumpster dive on construction sites (with permission). One can occasionally pick up useful items. I also volunteer for an organization that does home deconstruction. I've picked up some useful items that way.

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  22. Buy a portable sawmill. Best thing I've bought in quite awhile.

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  23. Makes me think of the line in Rudyard Kipling's poem, The Gods of the Copybook Headings, - "And though we had plenty of money, there was nothing our money could buy." Prescient.

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  24. We recently needed our furnace replaced. Our furnace guy told us he had a hard time giving us a bid because the prices kept increasing every time he checked.

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  25. At our big box hardware store, we used to be able to pick up 6-foot 2x4s for about 1.25. My son and I went a few weeks ago to pick some up and they had gone up to over six dollars. We collected our 1x8s for seedling shelves at an outrageous price and got out of there. My husband has since made me some vegetable trellises with PVC and vinyl lattice-not the most sturdy or attractive, but will work for now.

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  26. A friend of mine on the ham radio called me asking if I had any 3/4" Sked 40 PVC pipe, as there was none to be had out and about. A large hardware store not having this kind of thing is like an ice cream shop not having vanilla!

    If you see it and think you'll need it in the near future, BUY IT!

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  27. A year ago I was doing a little planning for a shop project. It was going to require a couple of sheets of 3/4 ply, 2×4, 2×6, a a few other things. I took photos of the price tags to fine tune the plans and the cost as I drew up the plans. Two weeks back, I headed to the orange store to get some of that lumber. To say I was stunned would be an understatement. Tripled!!! Needless to say, the project is on hold until I can gather enough lumber from alternate sources.

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  28. I just built 4 raised bed boxes out of used pallets. Yes, used pallets can be hard to work with; you have to be selective as to quality, etc., and develop a “method” for deconstructing them, but it’s doable. I can get all the used pallets I want at no cost. HINT: the block-style “Euro” pallets work well as the base.

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  29. I just finished building 4 raised bed garden boxes out of used pallets. Total cost $0.00.

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  30. We are in the same position. We sold our large family home, to downsize to a retirement homestead. The place we bought, while great location and potential, has been empty for several years. It needs a LOT of work and repairs. The cost of construction supplies, and the wait to get them is crazy. We have about 6-8 different lumber/hardware/big box stores that we rotate through for available supplies and lowest price.

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