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Cost increases

5.7K views 16 replies 12 participants last post by  PPD  
#1 ·
Just curious if any of you have been told or warned about any potential price increases coming up in May or June? TiO2 futures have sky rocketed and transportation costs are up almost 17% since the beginning of the year and are expected to go higher due to cost of fuel and a major driver shortage.

I have been notified by one of my suppliers. Wondering if any of you have heard anything yet.
 
#3 ·
The current situation doesn't look good for the short term. But long term maybe there will be some more interest in companies using US sourced raw materials which would be good all around. It's this transition period the paint industry is in that is going to hurt for a few years. Companies have been maximizing profits by using foreign sources and you can't blame them, but those sources look like they will be getting much more expensive in the next few years. Of course myself and a lot of industry types blame the SW Lowe's buyout for part of it. SW controls quite a bit more of the domestic TiO2 supply now than they did a year ago, and of course that jacks the price up for competitors. And when the other sources have to raise their prices.....well it don't look good particularly.
 
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#4 ·
I think price increases are more difficult for you as a supplier than we as contractors. Since paint materials are a small portion of the overall job costs, a 10% increase in paint, is an overall 2-3% increase in total job cost. Not very hard to pass an extra 50-100 to each bid to cover that. Paint cost and transportation cost hits everyone the same way, so I'm not worried.
 
#5 ·
Yup, you are correct. But i did ask if anyone had heard anything, not if it was going to greatly effect their profitability. Like it does mine.

What you tend to see happen when things like this occur is the majority of the products on the market stay around the same price and the higher end products go up considerably. This is because the higher end products will not be able to source the materials they need without having to pay more, while the major product lines will just adjust their formulations to compensate. Over a period of time this causes the mid level and lower paints to constantly perform worse and worse as their quality slowly goes down hill, while the higher quality products get more expensive. This has been going on in spurts for 25 years and is why there are so many fewer paint companies than there were. It may not effect the painters immediately, but eventually it will.

But what i am hearing is that the industry is starting in a cycle of upward spiraling costs unlike what it has seen for quite some time. They are expecting the next 7-10 years to be pretty tough for the high end paint companies. As if they haven't been tough for them the last 7-10 years! I suspect that you, the painters, may see quality levels drop off considerably faster in the next several years especially with the "staple" products along with continuously rising prices.
 
#7 ·
I don't know. Why they don't put those same liabilities on gasoline companies is another big question i have. They were after all the largest lead polluters by a very wide margin.
 
#9 ·
I have been told that the new electronic driver logs for trucking is hitting the industry hard. Lanes and routes that used to be able to cheat your seat time alittle and make it in say one day are now being forced to make it into two days. So to compensate rates have gone up from the carriers to compensate cause now not only can an individual driver haul less loads per week, carriers overall are legally stuck moving less freight per week unless they increase the number of rigs and drivers.

High congestion areas and traffic delays too are affecting the e logs too. Rumblings you may see truckers trying to change the current pay system from per mile to hourly or daily rate since I guess you can't cheat the seat time sitting in traffic despite no odometer increase.

Someone closer to the industry can feel free to correct me. But I heard the electronic logs are causing some of the increases for moving goods.
 
#13 ·
New truck Trolls as well in New England states. Will drive up prices of all raw and retail goods. And yes it absolutely matters in a bid proposal you can’t pass every price increase on to customer. Christ sound like a politician who keeps raising taxes and saying ah it’s only a cost cup of coffee everyday what’s big deal.
And yes I’ve heard there will Be price increase actually more than one coming soon. Let’s not forget all prices are rising housing, gas, insurance.... ah what’s big deal just pass on to customer....