Fires, strikes, shipping challenges and more.
A series of issues in B.C. are creating a shortage of one of the most used materials on earth: concrete.
Racy Sidhu, the chairman of Concrete BC and a managing partner YAAT Ready Mix Concrete, explained the shortage stems from short term and long-term challenges.
In the short term, a major strike is impacting approximately 35 per cent of Greater Vancouver’s concrete supply. Nearly 300 union employees are either on strike or refusing to cross picket lines.
In May, about 160 Rempel Bros. Concrete ready mix drivers/plant operators went on strike. Shortly after, 110 Ocean Concrete employees and 24 Allied Ready Mix Concrete employees refused to cross picket lines and are not working. Most are members of Teamsters Local No. 213. The remainder of the workers are represented by the International Union of Operating Engineers Local 115. Rempel, Ocean and Allied are all owned by Lehigh Hanson which in turn is owned by Germany-based HeidelbergCement.
What led to the strike involves working hours, missed breaks and wages.
“When one third of the supply is out of the market it becomes difficult for other players to take up that demand,” said Sidhu.
And those players also have customers in the U.S. they are supplying.
In addition, one of the ready-mix plants in the lower mainland experienced a fire that halted production in June. While LaFarge, the plant’s owner, stored extra ingredients to grind, they did not anticipate the shutdown to last several weeks. Another plant in Seattle had a 40-day shutdown scheduled and similarly stored extra ingredients so it could continue to produce, but high demand caused it to burn through these materials faster than anticipated. Another supplier has been experiencing rail transport delays on product arriving in New Westminster.
Those left producing are at emergency levels, forcing them to ration materials.
The lack of concrete supply is causing damage industry-wide and will soon be felt everywhere – projects being delayed and shut down; historic construction cost escalation; workers being laid off; and increased prices for taxpayers and home buyers,
— Chris Gardner
Independent Contractors and Businesses Association
“That is the bigger picture that’s driving some of the short term pains along with compounded effects of the strike,” said Sidhu.
Strike negotiations are slated to take place this week.
The industry is also facing workforce constraints.
The fallout of the Humboldt, Sask. crash that killed 16 led to restrictions of commercial vehicle hours. Sidhu explained this, combined with a shortage of workers, noise bylaws and more, mean even when concrete is available it is taking time to get to site.
Sidhu noted he has received calls about major transit projects and highrise pours that are facing delays.
“It is putting a lot of strain not only on individuals that are constructing these structures, but also on our personnel and dispatchers,” he said.
Concrete BC has been meeting with government officials, urging them to declare concrete a strategic resource.
“I know that Lafarge and Lehigh do their best to provide cement to the Lower Mainland, but their business also needs to supply the U.S. which is important for our economy,” said Sidhu. “But when there is a crunch like this it would be nice if some of that could stay in our market.”
Even if that supply stayed, Sidhu believes it would be difficult to satisfy demand with the strike.
Jason Saunderson, executive director for Concrete BC, said in the long-term, the group plans to pursue more ways to get and train drivers, including asking the province for more foreign workers.
“Lots of people are looking and are unable to find qualified people to do these roles,” said Saunderson. “Government is aware of this and they are looking into solutions.”
Concrete BC urged the industry to be patient and added it is reaching out to many of the major associations to address concerns and keep members updated.
“Work with your supplier or find alternative suppliers that have availability,” said Sidhu. “You need to preplan and be prepared for orders to move. Stay in constant contact with the ready-mix producer.”
Other groups have begun to sound the alarm on the concrete crisis.
The Independent Contractors and Businesses Association (ICBA) has called on provincial officials to use their authority under the BC Labour Relations Code to appoint a special mediator to resolve the strike.
“The impact of this labour dispute goes far beyond three companies and two building trades unions,” said Chris Gardner, ICBA president. “The lack of concrete supply is causing damage industry-wide and will soon be felt everywhere – projects being delayed and shut down; historic construction cost escalation; workers being laid off; and increased prices for taxpayers and home buyers. It is not an understatement to say that we haven’t seen this kind of supply shock in the industry for decades.”
Gardner added the province must do whatever it takes to make a deal.
“Losing this much supply will increase costs for taxpayers and home buyers at a time when supply chains, inflation, red tape, and special government procurement deals are already driving up prices,” he said. “Whether it’s the Pattullo Bridge, Lions Gate Hospital, projects being built by YVR and BC Hydro, or housing projects of all kinds, the impact is far-reaching, and government cannot sit on the sidelines. This is hurting everyone.”
The Homebuilders Association of Vancouver (HAVAN) stated large commercial and industrial projects are taking precedence for deliveries of what supply remains available, leaving little for housing projects for the small and medium residential builders.
“Members are telling me the larger concrete suppliers have advised them to not break ground on any projects planned with concrete foundations, estimating the strike could push on through September or October,” said Ron Rapp, HAVAN CEO. “Recognizing our members build 65 per cent of Metro Vancouver’s homes, cancelled projects can add up quickly, with grave impact on the ability to deliver our regions desperately needed housing.”
Rapp added multi-family builder Polygon has advised HAVAN that orders are now taking three to four times as long to deliver, noting the results are reflected in significant project delays and added costs.
“The two sides should bargain in good faith, however, if agreement cannot be reached, then mediation should be considered and or mandated,” said Rapp.
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