The Realities Of The Turf And Irrigation Supply Chain

To Our Valued Contractor Partners:

As your valued partner, our goal is to help your business succeed. We want to create an open dialogue with you about the challenges our industry continues to face, as disruptions are projected to continue through at least the first half of 2022:

Raw Material Shortages

Increased demand for common green industry products coupled with shortages of raw materials, delays of essential components, and manufacturing challenges have driven price increases.

• Plastic resins have seen price increases of more than 265%. This is impacting products made with plastic including PVC/poly pipe and fittings, drainage, rotors, sprays
• Worldwide copper shortages pushed prices of copper up more than 80% since 2020, impacting cost of wire, lighting fixtures, and brass products (brass is 60% copper)
• A global shortage for microchips used in electronics is impacting products like irrigation controllers and lighting transformers. Microchip manufacturing is backlogged 21-26 weeks
• Major components of fertilizer: Nitrogen, Phosphorus, and Potash are seeing significant shortages domestically and globally due to increased demand, extreme weather, and production shortages
• Potash price per ton has increased 71% to more than $600 per ton and Urea has increased 238%Freight & ShippingFreight and shipping challenges continue (both sea and ground) due to shortages on containers, truck drivers, and fuel pricing.• Trucking shipping rates & fuel costs have increased sharply, up more than 40% • Container shipping costs from Asia are up as much as 10x year over year
  • 2021 saw an increase of 308% for container ships with a week or more delay
  • Flatbed load-to-truck shipping rates are up 40.1% over 2020LaborLabor shortages continue; impacting costs from manufacturers, raw materials, packaging, shipping, and labor/production.• Driver shortages are causing a weekly backlog of more than 150 loads for every available truck
  • Cargo ships anchored near the west coast ports could face more than a 4 week delay to the dockWhat to Expect

  Now is the time to plan for delays, as well as higher manufacturer prices, due to the reduced availability of transport and the higher costs associated with it. The Central team has been diligently working with our manufacturing partners to stay at the forefront of any supply-chain issues and price increases. However, we expect to continue to see:

• Manufacturer price increases across all categories in irrigation, turf, lighting, and hardscape
• Longer lead times and shortages on all items
• Fertilizer prices will continue to climb, and inventory levels remain lowWe have been strategic with our purchasing and have been actively stocking our warehouses with additional inventory. This proactive planning has allowed us to bypass many of the challenges that other distributors have had with inventory shortages.The good news is, we will see a continued spike in demand for irrigation and landscape services as consumers continue to make capital improvements on their homes and businesses. This means another strong year for our industry.

Central Helping You Grow

• Leverage our Early Order Programs and stock up programs when available. This will help lock-in pricing and guarantee product delivery when you need it.
• Plan commercial projects as far in advance as possible. Reach out to your Central rep so we can partner with you to secure all the materials needed ahead of time.
• This year, we have already seen industry-wide price increases, as much as 45%! We anticipate another round of price increases again later this quarter. For specific product increases or increases per manufacturer, please contact your local Central branch directly.
• We encourage you to evaluate your current pricing structure and adjust prices/quote length as necessary. Actively communicate with your customers and be transparent with your pricing.

We will continue to keep you informed as we help you navigate the obstacles this season. We believe that a strong partnership is the best way to get through challenges. As always, thank you for your continued support.

Sincerely yours,

Anthony Luciano

VP of Sales & Marketing Central Turf & Irrigation Supply