Proactive approach aiding construction industry – Daily Journal of Commerce

In 2016, Chris Neffendorf installed an exhaust air duct on a Portland office building. Sheet metal products are among those becoming more difficult to procure amid coronavirus-related closures, contractors say. (Sam Tenney/DJC file)

While construction teams carry on during the COVID-19 pandemic, some are beginning to encounter a materials supply chain that has been taxed to the limit especially beyond U.S. borders. Government-imposed economic shutdowns have left manufacturers, distributors and their customers all scrambling to keep shelves stocked and workers equipped.

Lead times on orders are increasing. Material shortages are persisting. Its the new norm, and no one really knows when that will change.

Two weeks ago, (if) you would have asked how is a particular project in Hillsboro going for us I would (have said), Fine; no issues, said Eric Wiesmann, purchasing manager for Rosendin Electrics Hillsboro facility. And three days later, factories are shut down and materials are put off until June. So Id say today its undetermined; next week Im probably going to tell you every one of our projects is going to be impacted.

Many countries have required factories to suspend or severely limit operations. Outputs are slowing, and delivery times are growing and U.S. customers are noticing. Andersen Construction Vice President Brian Knudsen said international shipments of a number of items elevators, doors, flooring, thin brick and others are being delayed.

We have had a thin brick product on a project delayed not only due to the German factory being closed, but also because the broker for the product is from New York and they are closed, he said. So getting the delivery information has been difficult, causing uncertainty.

Meanwhile, for the Halsey 106 mixed-use building in Portland, general contractor LMC Construction is trying to ensure there wont be a shipment problem.

On this one, we have quartz countertops coming from Vietnam, and at this point we havent heard of any issues, project manager Ken Bello said. But what were trying to do is procure and get this stuff on ships as soon as possible so we have them here.

LMC Construction has tried to be proactive, Vice President Kyle Anderson added.

Everything were hearing is be prepared for materials coming from China to take a lot longer, he said. But right now it hasnt hit us because weve tried to get ahead of it and get material on-site and get additional storage.

A similar approach is being taken by Hoffman Construction, according to Vice President Dan Drinkward. The firm has been able to work through supply chain issues so far, he said, but there are concerns about long lead times especially for items coming from overseas.

Locally, even before state emergency measures were being taken, builders were working to mitigate supply chain issues. For the Robert Libke Public Safety Building project in Oregon City, procurement of items like rooftop HVAC units and storefront systems was moved up to accommodate a wider delivery window, P&C Construction project manager Will Somme said.

We have to get out in front of it, he said. Its been minor, but the whole shipping industry is overwhelmed right now.

LMC Construction expects to see more of that, Anderson said.

All we can do with our clients is be as transparent as we can about whats potentially coming up and what were seeing, he said, and then we just react to it on a case-by-case scenario.

While issues vary for each project, Hoffman Construction has adjusted by ordering materials earlier than usual, forgoing factory inspections in distant locations, and working with subcontractors and distributors to try and identify potential problems before they become critical.

Were trying to set up projects up front and avoid sole-source specifications that could lead us into a bottleneck that would put a project in a difficult position, Drinkward said. Were trying to build some flexibility into the supply chain anticipating were going to have impacts and understanding we dont know what we dont know yet.

What is known is that numerous fabrication shops in Clark County, Washington including ones that work with steel have closed. That impact has stretched across the Portland-metro area.

Weve had some subcontractors and suppliers from Washington basically tell us theyre shutting down, Anderson said. Most of our Washington-based subs are still working. The ones weve heard of are the ones with an actual fabrication shop in Washington, where they feel like they have to shut it down.

Much of that burden is being shouldered by distributors, Wiesmann said.

Were going to distributors and asking them to find new light fixtures, panel boards, breakers different brands of those products and were going to multiple distributors, he said. Everybody is working harder, and its this very odd blend of circumstances that leaves people working harder and making less money.

In 2019, electrician Charlie Niemann installed a light fixture at the Wells Fargo Center. Materials distributors have been experiencing shortages of various building materials, including light fixtures. (Josh Kulla/DJC file)

Fortunately for LMC Construction, the material impacts it has experienced so far have not been critical, Anderson said. The closure of a door manufacturer in another state forced project managers for a renovation of the Silvertowne Apartments in Silverton to hunt for alternatives. Meanwhile, a team handling a different project ran into difficulties sourcing bath hardware. Other items that are proving more difficult to procure, Anderson said, include sheet metal products and steel products.

We made the substitution from a different manufacturer for a slight material increase, and thats what were seeing for the most part, he said. But the other thing were starting to see more and more of is suppliers and manufacturers warning us that their lead times are going to be longer.

Andersen Construction has multiple tower projects under way in downtown Portland. Its receiving similar messages, Knudsen said.

We have received notices from most of our trade partners about material delays on all of our projects, he said. Many times they are not specific, only that there will be delays, but the timing is not specific or is given as a range of weeks or months of delay.

Not every contractor in the Portland-metro area is dealing with such uncertainty. Yes, larger materials, and especially ones not standard sizes, seem to be problematic. And of course, many international shipments appear likely to be slower for the foreseeable future. But some firms have yet to face material shortages or delivery delays.

It is definitely an important topic to examine, and seems to be coming up a lot on some of the calls with developers, said Angie Cole, director of marketing for general contractor Lorentz Bruun Construction. We are very fortunate, however, in that we have not experienced any of the challenges you mentioned. We may be a lucky exception.

Ultimately, as the pandemic continues, no one is sure what the long-term effects will be, either on their projects or the wider construction industry. Everyone is responding to the situation at hand.

Nevertheless, Drinkward and others say the industry is already adapting to the new realities including supply chain challenges in a more cooperative fashion than in the past.

Its ever-changing, but weve figured out largely how to do it, he said. And were seeing with the (resumption of construction) now in Washington, with our projects up there, although many of them were considered essential, now theyve got new guidelines and the new normal. Its actually one of the things weve hoped and offered up. As other businesses start up, we have a lot of lessons weve learned on how to do it.

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Proactive approach aiding construction industry - Daily Journal of Commerce