It’s no secret that the U.S. construction industry is heavily dependent on building materials and finishes from foreign manufacturers, particularly Europe and China. Wuhan, the epicenter of the coronavirus outbreak, is a major hub for construction materials and supplies. While Chinese manufacturing plants are gradually reopening, the supply chain is rife with disruptions, and there is no clear timeline for when things might get back on schedule.
As the US economy levels out, developers will need fast access to the materials they need to get back to work. To accomplish this, the industry must upgrade from the old way of sourcing construction materials.
“The construction industry will be experiencing the impact of the coronavirus for a long time,” said Steve Levin, senior vice president of procurement at Mega Supply Pro. “The industry is not prepared for something like this, and growing uncertainty when it comes to inventory and pricing should lead contractors to search out new suppliers.”
U.S. contractors began to lose access to construction materials months ago, and the problem is only expected to get worse as the pandemic continues. At a Bisnow event in Washington, D.C., in February, developers described how materials they needed on their sites were caught up in ports because of the coronavirus and how suppliers were waiting weeks for materials from China to pass through customs.
Levin has a solution to supply chain headaches. His firm acts as a manufacturer-direct wholesaler of construction materials and finish products, handling the sourcing of all materials, from concrete to light fixtures, all under one roof. The company has eliminated third-party markups by shipping products from its global distribution network directly to the job site or to Mega’s facilities for available short- or long-term storage.
According to Levin, the global distribution network Mega Supply has spent years building uniquely positions it to help its clients during this time. Instead of relying on one supplier, or even a handful of suppliers in major markets, the company works with a diverse network of suppliers from all around the world to get developers the materials they need.
“Right now, our supply chain is intact,” Levin said. “We have thousands of distribution accounts, which allows us to source from many of these manufacturers rather than a small handful.”
Piazza Terminal is a mixed use residential complex with over 1,100 apartment units, for which Mega Supply Pro had procured a wide range of building materials, appliances, flooring, tile, cabinetry, and other finishes.
Having seen the fragility of the old supply chain, Levin sees more contractors and developers turning to a more robust supply chain mechanism by utilizing Mega Supply Pro’s expertise and services.
Long before the pandemic started, Levin and his team at Mega Supply Pro believed that the traditional construction supply chain was flawed. According to Levin, the entire process of sourcing materials was a “logistical and financial nightmare” that could take over a year to complete and involved dealing with scores of representatives, dealers and subcontractors, all of which required a markup to operate.
This process was prone to delays, which is something developers need to find ways to avoid now more than ever. Under the Mega Supply Pro model, materials go directly from the manufacturer to the project. Levin said this model will eliminate additional setbacks once developers are ready to build again.
While the coronavirus has stalled construction projects across almost all asset classes, multifamily has been hit particularly hard. A March survey from the National Multifamily Housing Council found that 55% of firms with ongoing projects reported that they were experiencing delays, citing local construction shutdown orders, outbreak-related labor constraints and lack of materials.
“When construction picks up again, some developers may find themselves forced to start over completely, starting from the architect who will need to change the specifications of certain products and materials that are unavailable,” Levin said. “We can review clients’ specs, and present a submittal package that fits the criteria they envisioned from the start, all within their budget. Then, we’ll handle logistics for when and where their materials need to be delivered.”
Mega Supply Pro is also offering to store materials for clients if needed. That way, clients can purchase materials now while they are still in stock and not have to worry about storing them until they are ready to build.
“The construction industry is facing unprecedented challenges right now. There is no historical data to look back on; we’re all navigating this for the first time,” Levin said. “We’ve had all of our clients with us from the beginning of this and while some put their projects on hold, as of May 1 they are all back in full force and we are there to support them every step of the way.”
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Mega Supply Pro is a manufacturer-direct wholesaler of construction materials and finishes, acting as your one-stop-shop for direct procurement and timely delivery of building supplies, appliances, fixtures, etc.
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