Supplies feeling the heat

The mercury burst through the forty degree mark the other day, suggesting that summer is well and truly on the way.

Operators using machines with air conditioning will be glad to chill out, while others using older, or open platform equipment will not be so lucky. However, the heat set me thinking about last summer, and the chronic materials shortages everyone in the construction industry suffered.

For those with a chronically short memory, the price of raw materials went through the roof, leading to a sharp spike in steel prices and the federal government setting the price of cement in stone. This, coupled with soaring diesel costs and rampant inflation caused lots of downtime and many key contracts being re-negotiated.

So how prepared are we for such a shortage happening again? You might think that is ridiculous given the contrast between the economic climate between then and now, but surely it is possible? After all, the speed at which the global tsunami hit the Gulf caught everyone by surprise – and the signs that a shortage might happen again are there for all to see.

For example, a cut in oil production has lead to a moderate price increase - in fact at the time of writing it has just gone past the US $60 per barrel mark. This is of course good for the region generally, but it has meant that the price of shipping has increased, because not only is the price of fuel rising, the vessels are not carrying as much cargo. This has lead to the price of steel going up… and so the whole cycle begins again.

It is vital that plans are put in place now to deal with these shortages. It is one thing to get hot and bothered under the noonday sun – it is quite another to do so because costs are spiraling out of hand, and at a time that our businesses can least afford it.

Greg Whitaker is the editor of Plant Machinery Vehicles Middle East.

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