Post-COVID Delays & Price Escalations

The bottom line is, Post-COVID delays are affecting the supply chains, associated customer service, labor shortages at manufacturing facilities and we feel it every minute of every day while trying to serve you as fast and economically as possible.  This ultimately has an effect on what would otherwise be prompt and routine service.  The slow down has dramatically lowered expectations for entire industries and reduced the speed at which we move, while increasing the amount of communication we have to relay to and from one another in regard to constant updates, etc. Below is a simple summary of some the things we're experiencing and how it ultimately affects our clients day in and day out. In simple terms, 'Don't shoot the messenger'.  

Our company has actually grown in man-power throughout the pandemic and our production levels have stayed on track, however, this supply chain hold up and poor customer service standards from vendors has created an unwanted 'bottle neck' in scheduling and urgency.  Rest assured, that we still operate as fast as possible, will not lose track of your order and we'll attempt to keep you as updated as possible with as much reliable information as possible at all times.     

Quote Delays

Prior to the pandemic, we were able to turn around really fast quotes after making some phone calls to suppliers and getting our estimate compiled in short order.  This is no longer the case.  Many suppliers are short-handed, delayed in response and/or are not responding at all to messages.  For example, typical phone call hold times with a supplier used to be 0-10 minutes.  Currently, we wait on hold for very common parts for upwards of 30-60 minutes if we're lucky or even days and sometimes weeks.  Since we don't just make quote prices up out of thin air and rely on real-time pricing to deliver the best possible quote to you, this creates a bottleneck effect in the quoting process and thus the modern delay.  As you can imagine, this allows us to only deliver a handful of quotes a day in lieu of dozens.  Our 'pricing valid' time lines can change virtually over-night. So if we quote something, its very possible that the very next day, the pricing that was quote is no longer valid. The popular AC equipment manufacturer Carrier, recently informed us for example that 'last night there was a 30% increase on everything'.  Un-announced, just bam, our stuff is 30% more now. 

Parts & Equipment Availability

Like the quote delays we now have, availability for the parts we're attempting to quote is also delayed.  Inventory at suppliers is NOT being kept on-hand and much of what used to be "common parts" is no longer very common.  Every day, we're astonished by some new reports of any random once-common part being reportedly "12-16 weeks out from the manufacturer." and in some extreme cases "52-60 weeks!  We then become the bearer of bad news when we are forced to relay that information along to you.  In some cases, we're even having to use different brands of equipment on one job in order to accomplish the mission.  

Pricing Escalations & Inflation

We often receive weekly/ monthly notifications about price increases due to scarcity.  In the good old days, that happened once a year.  With the aforementioned delays and availability issues in play, this causes a natural scarcity of resources and thus a very undesirable price escalation.  With AC units, for example, we've seen costs on a standard AC unit leap from around $2000 pre-COVID, to now $6000 post-COVID.  We're certain you see it too if your shopping for a new car or truck or even at the grocery store for common everyday household goods.  Things are just flat-out more expensive and the all-mighty dollar simply doesn't go as far as it used to due to inflation. 

How We Fight Price Escalations

To better combat the price escalations, we perpetually adjust our own pricing to help absorb that blow and remain super-competitive.  Sometimes you don't necessarily see this, but it's there.  For example, we try our best to simply NOT increase our labor rates and absorb the economic impact on the labor side of our billing model.

• Creative sourcing and constant, real-time price checking on materials, parts and equipment
• Negotiating pricing on your behalf and based on volume to the best of our ability in order to gain better, more affordable outcomes
• Consistency with our labor rates
• Budgeting in lieu of hard pricing which provides Not-To-Exceed savings relayed to the client

Read more on Quotes vs. Budgets and see the Not-To-Exceed billing style we also use to help curb your bills. 

This article has been shared by Direct Service, Construction and Design to specifically accommodate our intended clientele.  The intent of sharing this information is to better inform the public of these general topics, expand knowledge and safety for all and provide crucial information in regard to their MEP and building systems and/or assets. It is NOT our recommendation that any article recommendations or how-to scenarios be attempted by anyone other than a qualified or competent person.