Commercial Roofing Costs are on the Rise. Guess What? So Is Everything Else…
It seems that the cost of commercial roofing and construction is continually on the rise. There are obvious, and even not so obvious reasons for this trend, including the increasing cost of materials, ongoing adoption of green regulations by municipalities, and even demand for new construction. However, there is one recent regulatory change that not only impacts commercial roofing and construction; it impacts every industry that relies on this method of transportation. What is it?
Trucking. Yes the government imposed changes to the trucking industry that, coupled with an aging and frankly aging-out workforce, creates the perfect storm.
“The federal government, in its divine wisdom, implemented a safety program for truckers that called for a weekly cut of 15 hours of drive time,” said Steve Little, KPOST Company president. “Couple that with the 15% decline in available truckers, and we have 30% less availability of trucking. That hurts everyone.”
What is the New Regulation?
The Federal Motor Carrier Safety Administration has imposed changes to the trucking industry via their Hours of Service rules and regulations. The administration decreased the number of hours that a trucker can work and imposed minimums on the breaks required. These new laws went into effect in July of 2013 and while they are not recent, the impact has rippled across multiple industries, including commercial roofing.
“These changes will impact more than just the actual delivery of materials or products, it will have a domino effect across commercial roofing,” said Steve. “If laborers are required to wait on jobsites for materials, that negatively impacts the project with unnecessary overtime and job delays. The true impact will unfold over the next several years.”
The Impact to Commercial Roofing is Vast
“Before the regulatory change, we could place an order on Monday and typically have materials by the end of the week or certainly early the next week. Now that time frame is longer,” said Steve. “The ability to react to customer needs is critical in every industry. Having to wait for materials or product will negatively impact the bottom line, especially with many General Contractors changing their buying cycles to “just in time” contracts.”
Commercial roofing product manufacturers are also impacted. According to Terry Faas, director of commercial operations roofing systems for Johns Manville, the fact that commercial roofing relies on flatbed trucks generates even greater constraints due to the new regulations.
“Flatbed truck capacity is the most limited of all modes of trucking equipment and the new hours of service create a greater constraint, limiting our ability to get the equipment we need in order to deliver on time,” said Terry. “Additionally, if the shipment is a two-stop load, after the driver delivers to the first stop, which is usually the job site, they’ve run out of hours to deliver to the second stop. The shipper, such as the manufacturer, then incurs an additional cost for the driver to keep the load overnight, consequently forcing us to miss the delivery date to the customer. This is not a good situation for anyone. “
Some manufacturers are building regional distribution facilities to shorten the distance for deliveries with the hope that it will save time. Unfortunately it will not save money.
“Obviously having to build new facilities costs money, and that will be passed on to the consumer. While these regional facilities may make up some of the time delay, this solution will not alleviate cost increases,” said Steve.
While cost is one aspect that will be impacted by these new regulations, the construction companies will have to change the way that they conduct business. In addition to being seriously proactive on getting materials ordered, they will also need to find ways to offset increased costs early in the process.
So what is the solution?
According to Terry Faas, there is no easy solution.
“We are looking at options, such as increasing our dedicated carrier base, stocking material closer to the market and improving the proactive communication to our customers so they know what’s happening before it happens.” Terry went on to say “Getting orders and information from our customers in a timely fashion can help us plan better and ultimately be a better service provider to them. Converting from flatbeds to vans where possible can also help mitigate issues.”
There are other mitigating circumstances that exacerbate the trucking issue. For example, the average age of a trucker is 57. Without a strong push to encourage new drivers to the industry, there will not be a talent pool to replenish the industry. Couple that with the decreased number of hours truckers can be on the road, and the combination creates a bleak outlook for this critical service.
“There is not a great solution on deck at the moment. Obviously the idea behind the regulation is to keep truckers safe as well as those who share the highways with them. However, the negative impact to commercial roofing and other industries is immense,” said Steve. “There has to be another way to ensure safety without causing such a large cost increase to so many. Without a better solution, we will see prices continue to increase while delivery times get longer. This does not bode well for many, particularly the consumer.”