Untangling the packed warehouse problem – dare we suggest it? – might solve the building materials problem

We wonder if there is a need for our Minister of Building and Construction  to arrange for a chat with the Minister of Transport and whoever else might help in getting building supplies from the place where they are stored to the places where they are needed.

We ask because on Tuesday we spotted a headline that advised:

Building materials shortage: Tradespeople unable to offer fixed prices due to shortages

Two days later we were drawn to the news that…

Warehouses in Auckland ‘completely full’ with building materials

The first story said housebuilders are being deterred from offering fixed prices on jobs by escalating prices and critical shortages of materials.

Mortgage brokers are now finding escalation clauses cropping up in contracts to allow for material prices to rise; they say banks favour fixed-price builds, so getting a mortgage could become harder.

“To me, it’s uncharted territory – I haven’t seen this before,” Paulette Trotter, who’s been in the finance industry for three decades, said.

The situation is exacerbated by the pandemic choking the supply chain north and south from Auckland so severely some builders are having to down tools.

Mike Blackburn of Canterbury’s CBS construction co-op was reported to have been hearing of the pressures on their 600-plus tradie members.

“I had an email this morning from a builder who said by [Monday] afternoon, it’ll be tools down for them, they simply don’t have the building materials to carry on working,” Blackburn said.

 Oh dear.

This does not bode well for the Government’s programme of policies aimed at dealing with the housing crisis.

But then we are told Auckland warehouses are overflowing with building materials that importers have been prohibited from distributing during lockdown despite severe shortages.

Building Federation chief executive Julien Leys was reported as saying level 4 restrictions had left distributors hamstrung.

He told of one business that unloaded 70 containers a week but could not shift the product from its warehouse under restrictions.

“They have no more space left, they are literally running out of space. It’s across the board from the bigger suppliers to the smaller building suppliers who normally only keep about one months’ inventory,” he said.

“All of a sudden they’ve now got their warehouses or their storage areas completely full and they have nowhere else to put these building materials.”

We are puzzled.

True, the Auckland supplies locked up in warehouses perhaps don’t cover all the areas of shortage.

Even so, it looks suspiciously like the Government could do a better of managing key parts of the economy.

 

 

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