| As
we approach the upcoming snow season in Michigan, let us
remember how last year ended.
February 2008—The announcements hit
the TV, radio, and newspapers. There was a salt shortage, which
left our municipalities and snow removal contractors scrambling
for salt, with the end of winter nowhere in sight. Fast forward
to the end of the season, then through the spring and summer
months with an uncertain Michigan economy and continued rising
fuel costs. Now you find yourself approaching the upcoming
Michigan snow season wondering what’s going to happen this year.
The overall reality is that we
will have the same struggles this season, too. On August 1 came
the promise of notification of a salt price per ton for private
distributors, snow removal contractors, etc., but as of this
writing, the price has only been released to a few. In review of
Michigan municipality contracts, the pricing is 50-100% higher
than over the past few years. With this much uncertainty, we
hope that September will have definite price and supply
availability for all local contractors, but even then there’s no
guarantee that this will happen or that it will hold stable for
any length of time.
As a property owner or manager,
the salt shortage and rise in prices is making it very difficult
to budget for snow removal costs. From the snow contractor’s
viewpoint, bidding out contracts is difficult, to say the least.
There are very few contractors who have secured and/or actually
own (in inventory) a salt supply for this upcoming season. This
year we all need to work together through this “shortage” of
salt and play the “supply and demand” game. You have probably
seen attempts in your returned contract proposals with scenarios
ranging from a set price, price scales, price indexing, and
other calculations as bidding deadlines are met.
It is important this year for all
of us to understand the salt and fuel cost issues. The price of
commodities and the level of snow service must be reviewed by
both parties for their true impact. In selecting your snow
removal contractor, you should discuss their business plan for
maximizing their resources. They should discuss with you the
level of service options and the varying approaches to different
snow storm events. A knowledgeable and experienced contractor
with the most efficient labor, equipment, and materials will be
the most cost effective for you. Break apart aspects of your
contract to decide what level of service is needed at each site.
It might be cost effective to pre-purchase bulk salt and deicer
products. It’s possible that site storage of salt and equipment
could reduce your costs and provide benefits to both parties.
Addressing clients’ primary
concerns for the snow contractor’s preparedness, commitment to
their sites, and proactive ideas should be high on your list
when selecting your snow removal contractor. Unfortunately, the
snow removal industry has a not-so-stellar reputation in many of
these areas. Relying on contract price alone could leave you
with someone who won’t show up during “the big one” or who won’t
finish the season out.
Strive for a strategic partner
and not just another contractor. Ask if your contractor is a
Certified Snow Professional (CSP). You have probably worked hard
to achieve your certifications and designations within your
industry, showing a high level of dedication and
professionalism, so why hire a contractor who is not on the top
of his game? CSPs are highly qualified professionals
representing all aspects of the business, including operations
and the legal and technical aspects.
As a property owner or manager
you need to ask your contractor the hard questions. Anyone who
is unwilling or unprepared to discuss their plans for securing
salt for the upcoming snow season should be viewed with caution.
Structure your contracts to address market supply and demand.
Expect that during the season, adjustments may need to be made
based on salt and fuel prices.
About the Author
Troy R. Clogg, CLP, CSP, is Owner and Sales Manager of
Troy Clogg Landscape Associates, LLC, based in Wixom, MI. For
more information, visit www.tcla.com, call (248) 685-0123, or
email: carol@tcla.com .
BOMA of METROPOLITAN DETROIT
September 2008
www.bomadet.org
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