Planning Ahead in 2021: Long Lead Times

Posted on February 17th, 2021
Posted in Oil & Gas    Tags: , , ,

When forecasting for the months ahead, a focus on budget planning is always top priority, but in 2021, scheduling should also be on top of that list. Due to pressures on supply chain throughout 2020 and now several weeks into 2021, we are noticing a consistent trend of increased lead times and rising costs on materials and equipment. Items such as control valves and dump valves that you are used to purchasing off the shelf are experiencing lead times extending up to 12 weeks or more and steel prices remain in volatile flux.

What we are hearing:

  • 1 – 2 week delays on receiving shipments of steel pipe due to fluctuating steel prices
  • Companies like Chevron and Oxy are buying up a surplus of pipe now to have on hand as prices continue to rise
  • Increases in Water Transfer project costs due to rising resin and poly prices
  • Many vendors are anticipating significant market shifts as a result of governmental policy change such as new or increased steel and aluminum tariffs and quotas
  • Continued business foreclosures are resulting in further-reduced supply and subsequently higher pricing from vendor markets
  • HDPE production bottlenecks due to higher plastics consumption from medical other industries and a overall reduction in refining
  • Headcount reductions at many vendors/distributors are increasing response times and constricting operational efficiencies

Although frustrating, there are ways to get ahead of these delays on the front end of the engineering and design process to save you the headache of scheduling delays and the stress of expediting costs. Halker and our preferred vendors have worked together on unique solutions to avoid project delays due to equipment availability. Let us know how we can help you stay on budget and on schedule.