Safeguarding your bottom line as lumber prices rise : By Deb Hilmerson
Like many contractors, you may have bid jobs a year ago with no clauses for increased direct project costs. Then the onset of COVID created construction delays and shutdowns. On top of that financial standstill, now you may be experiencing material and skilled worker shortages. Some of you may even be turning down work because you can’t find enough skilled labor.
This situation could be putting your bottom line at risk in more ways than one. And shortcuts aren’t the answer.
We’re dealing with ridiculously high lumber prices and untrained workers
Lumber is in short supply and expensive when you can get it. Extraordinary residential market demand has driven up the cost of standard grade 2x4s by an estimated 140-150%. If you’re still using 2x4s for safety rails and leading-edge fall protection, and didn’t plan for rising lumber prices, that’s a direct hit on your bottom line.
Worse, most of the 2x4s you’re using for wood safety rails are for temporary purposes. It’s not much different than tossing extra cash directly into the landfill at the end of each job.
Then there’s the other challenge associated with using 2x4s: Our industry doesn’t have as many skilled workers as we did before the pandemic. And if you are not using experienced carpenters to build and install your wood safety rails and leading-edge fall protection, there can be safety and compliance issues. Someone could fall and die. You might be cited by OSHA.
Changes made by large construction companies are now paying off
Many leading contractors started moving away from using 2×4 safety rails years ago. Those that had the expendable income to invest in construction-grade, engineered safety systems are now saving money on costly disposal fees, extensive material and labor cost, OSHA fines and project delays due to material availability. And they are profiting from the reuse and re-renting opportunity this one-time investment offers.
Although you may be cautious about spending right now, consider this: Just a couple years ago, the cost per linear foot for safety rails made with 13-gauge hot-dipped galvanized steel was about twice that of using 2x4s. Now with the skyrocketing cost of lumber, the cost per linear foot of steel safety rail systems is almost equivalent to the cost of building 2×4 safety rails. Even better: Once you pay for the galvanized steel safety rail system, you make money reusing/re-renting them for subsequent jobs, and to top it off, the project lifespan of the safety rail is 15+ years!
Building 2×4 guardrails is time and labor intensive, and requires skilled labor. On the contrary, if you invest in an OSHA-compliant system that is easy to install with minimal components, you can assign the task to someone just learning the trade while your experienced workers can be used more efficiently.
Bottom line: Risks go down. Profits go up. And you’re better prepared the next time lumber prices soar or you are short on skilled workers.
But of course, nothing is quite that simple. Demand for construction-grade, engineered safety systems is on the rise and there’s also a steel shortage. Steel suppliers are doing what they can to keep their existing customers going. This tells me two things. One: Your direct competition may now be switching to engineered safety systems which will make their bids even more competitive moving forward and give them another revenue stream. Two: If you can swing this important investment in your company’s future, the time to act is right now.
Deb Hilmerson, President & CEO, Hilmerson Safety
Changing a mindset takes a mountain of grit, something that describes Deb Hilmerson perfectly, from her hard hat to her steel toe boots. Her 30 years in construction as a field laborer, safety director and consultant landed her in the right place at the right time to transform archaic equipment practices on construction sites to more efficient lean alternatives.
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