The Global Supply Chain Crisis – How It’s Affecting the Plumbing Industry

ship unloading in port during global supply chain crisis
Container shipping boat at dock yard main logistics system of transportation of cargo container.

The global supply chain crisis has disrupted industries across the globe. As the world recovers from the COVID-19 pandemic, one of the most badly hit industries was logistics. Distributors and engineers that required a ready supply of plumbing products had to wait for months on end, resulting in heavy losses.The disruptions in the supply chain can be traced all the way back to the start of 2020. In certain parts of the world, especially manufacturing centers like South Korea, Taiwan, China, Germany, and even South Asian nations like Vietnam, the coronavirus hit hardest.This causes a serious problem for architects, engineers, and distributors, creating a cascading effect that eventually results in missed deadlines and unforeseen project delays. If you’re facing issues and delays with your plumbing products supplier, it might be time for you to consider a change.

What Went Wrong?

While many companies are suffering, primarily due to ever-increasing lead times and rising supply costs, some businesses, like Dakota Plumbing Products, located in Ft. Lauderdale, FL, have been able to weather the storm, and come out better simply because of their business model, their forethought, and the ethos that they stand by.The situation turned for the worse as demand rose for items like lumber and paint. In response, factories that were scaling back production suddenly lurched into action to meet the rising demand. However, by then, the gap had widened quite a bit. To ramp up production, factories needed to buy raw materials, most of which are generally exported. For example, a plumbing fixture made in China may require parts that are brought in from Vietnam. The rapid rise in demand caused a clog in the logistics system. To exacerbate the situation, the world suffered from a significant shortage of shipping containers, which meant finished goods were just piling up in warehouses. But where’d all the containers go? To put it simply, they got stuck. During the early months of 2020, China was shipping insane volumes of personal protective equipment. These were sent to all parts of the globe, including areas that don’t send a lot of goods back to China. As a result of that, the shipping containers were just left there, such as parts of West Africa and Southern Asia. This happened at a time when China was ramping up production to meet demand in wealthier markets, especially North America. Owing to an imbalance in demand and supply, costs increased sharply. Fast forward to 2022, and almost everything is in short supply. From plumbing fixtures to computer ships, everything is scarce. A couple of years ago, you could ship a 40-foot container for under $2,000 from Asia to the USA. Today, costs have skyrocketed, with importers charging premiums as high as $25,000.That’s why so many companies have gone out of business, and many others are teetering on the brink. At Dakota Plumbing Products, we maintain complete control of our supply chain and product. Thanks to our existing contracts and robust supplier connections, we were able to mitigate any disruptions to our supply chain throughout these testing times.

How the Supply Crisis is Affecting the Plumbing Industry

faucets in stock during supply crisis
Row of brand new chrome colored water faucets.

The plumbing industry in the United States primarily relies on goods brought in from overseas. Big-name brands are finding it difficult to source inventory, especially due to the extortionate pricing used by logistics providers. For many larger brands, the problems don’t end when their containers arrive on the docks in North America. Upon landing, items need to be moved back and forth between distribution centers. These became all the more difficult, especially due to the Californian wildfires. Union Pacific Corp, a haulage services provider, also put a temporary stop to moving containers inland to clear out a deadlock that had occurred outside Chicago. In fact, brands like Home Depot, Costco, Walmart, and Target have resorted to chartering ships to import goods, primarily to ship in-demand goods such as plumbing supplies and power tools. The plumbing industry has definitely been hit hard by the global supply chain crisis, with many larger businesses struggling to meet demand. As Americans across the country look to invest in plumbing fixtures and home improvement projects, larger brands have found it difficult to meet demand. As the Omicron wave hits, lead times are only expected to get worse. Busy routes, especially those from manufacturing hubs like China, are often clogged, with manufacturers finding it more and more difficult to ship components and raw materials. Even businesses that handle manufacturing onshore are finding it difficult to move inventory. That’s also due to a severe shortage of truck drivers across the country. A slew of retirements, coupled with people simply quitting their jobs in lieu of less stressful employment, have resulted in larger brands finding it hard to move inventory. In some parts of the country, warehouses are full to the brim. As a result, lead times have stretched exponentially, from days to several weeks or even months. The American Trucking Association revealed in a one-page summary that it was facing a shortage of more than 80,000 drivers – a historic high. It estimates that this figure will double by 2030.The plumbing industry is reeling at the moment. The global logistics machine, known to work at a humdrum pace in normal times, has almost ground to a halt. Many plumbing companies reduced demand owing to the overall uncertainty around the COVID situation, and the sudden increase caught them off-guard. Companies that hadn’t built any redundancies in their supply chains now face the risk of prolonged lead times, with their worst fears being that demand subsides by the time deliveries arrive. Thankfully, Dakota Plumbing Products has been largely unaffected by all this. In fact, they have been taking steps to actively grow and expand their operations!

A Business Owner’s Perspective – Dakota Plumbing Products

Dakota’s full warehouse during supply chain crisis

Since our inception, Dakota’s goal has been to build long-lasting relationships with both our customers and our factories overseas. We have refined this over the years and worked with our factories to enhance our production capacities by more than 50% since we began by building additional facilities. In addition, we have worked diligently with our customers to monitor and anticipate their needs and growth expectations. We had already begun to scale up production in late 2019 since the building sector was resuming its expansion. With this anticipation in mind, we constructed a two-year platform to more than double our par levels from the prior year. Instead of relying on last-minute deliveries, we made sure that we have substantial stock available, and that our suppliers were capable of meeting our growing demands. This has allowed us to maintain complete vertical control of our supply chain, thus ensuring timely deliveries to our clients, including popular items like our 50-50 sinks. In fact, many of our competitors are now reaching out to us because we are one of the few names in the industry that can ensure timely delivery and have ready stock available! Whether you are a dealer, builder, architect, designer, or homeowner, we guarantee that we can meet your plumbing needs and ensure that products reach you on time. We believe that our customers are not just an outlet for our product lines, but an extension of our growing family. And family looks out for one another as we have over the past few trying years. We are prepared for any potential obstacles and are quick and adaptive to any scenario that may arise. In fact, whereas many are suffering, Dakota Plumbing Products is thriving and growing. In 2022, we will be establishing a new distribution center to feed the west coast of the United States, as well as upgrade our operating systems to meet today’s expanding industry demands. We aim to stand steadfast with our family and friends and overcome any challenges.

David Kaye

President, Dakota Plumbing Products