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Rising transport costs take their toll on distributors

March 19/26, 2018: Volume 33, Issue 20

By Ken Ryan

New government regulations have exacerbated the ongoing trucker shortage in the U.S., resulting in higher inbound freight costs for flooring distributors that could spread across the entire supply chain.

The problem is twofold: More than 70% of the goods Americans consume are carried on the nation’s highways, but a new report says the industry needs to hire roughly 90,000 new truckers each year to keep up with demand. At the same time, new government regulations—including implementation of the electronic logging device (ELD) mandate—are forcing some smaller trucking firms and individuals out of business, thereby worsening the shortage and creating problems like product shortages and delivery delays.

Observers say there is no reason to think the labor situation in the trucking industry should get better any time soon. In the short term, truckers must switch from logging their hours on paper to doing it electronically by April 1or face penalties; drivers will no longer be able to fudge their hours on paper to stay on the road longer.

“There has been a shortage of truckers for quite a while,” said Bob Weiss, CEO of All-Tile/Carpets Cushions & Supplies, a top five flooring distributor based in Elk Grove Village, Ill. “What is compounding the problem are new regulations that are tighter.”

Scott Rozmus, president and CEO of FlorStar Sales, a top 20 wholesaler based in Romeoville, Ill., said the biggest issues they are facing are delays and the difficulty of finding available, reliable carriers. “Obviously, costs are going up, too, but ultimately the consumer will need to bear those costs.”

Other distributors are feeling the impact as well. Carrollton, Texas-based Adleta, another top 20 flooring distributor, had to go out and hire additional drivers because of the shortage. “It’s no easy feat to find a driver with a clean and safe driving record,” said John Sher, president. “[As a result], all inbound freight has gone up dramatically. While we have been absorbing this, we will have no choice but to pass this on.”

The improving economy is adding to the problem. The reason: as more goods are shipped, more drivers are needed. It’s classic supply and demand economics. “There will be increased costs moving forward as the new cost structure realities begin to show themselves,” Weiss explained.

At issue is the ELD mandate, a federal rule that took effect Dec. 18, 2017 which requires trucking companies to record their hours of service on ELDs (devices that synchronize with a vehicle engine to automatically record driving time for more accurate hours of service recording). With ELD implementation, any delays at docks or warehouses will result in higher transportation costs for the shipper, according to transportation officials.

Jaeckle Distributors, Madison, Wis., has been operating with electronic logs since 2008, so the new ELD mandate hasn’t impacted the way it operates. However, it has impacted other carriers it works with and has added another layer of complexity for carriers who are new to it.

“We have not seen a significant rise in LTL [less than truck load] costs; however, I am seeing a decline in the overall service quality we’re experiencing with other carriers,” said Bill Simonson, vice president of operations. “We are finding increased damage and more occurrences of freight not being picked up. That is either due to lack of experience, shortness of drivers, or lack of hours available to drive.

“And, of course, you are dealing with a good economy, rising volumes and fewer drivers to move the freight. We’ve been adding drivers to our staff and we’re more confident with our ability to control quality in this environment than we are with some of the third-party carriers out there.”

Jeff Striegel, president of Elias Wilf, a top 20 distributor from Owings Mills, Md., said the implementation of electronic logs has prompted a tangible percentage of the smaller independent trucking companies to exit the business. “Losing 10%-12% is a dent in the overall capacity, which was strained to begin with,” he explained. “A lot of the drivers I am around have gotten older and they are not willing to spend the money [required of the electronic logs] into one truck; it has really shut down a portion of the trucking capacity, and there wasn’t an abundance to begin with.”

The American Trucking Association reports the industry has struggled with a driver shortage for the past 15 years. During the Great Recession, freight volumes dropped, allowing the industry to meet demand with fewer drivers. But when volumes recovered in 2011, the driver shortage became a problem again, the ATA found.

According to a study conducted by DAT Solutions, just one truck was available for every 12 loads needing to be shipped at the start of 2018—that’s the lowest ratio since 2005.

Striegel, as well as others, predicts the situation could get worse. “Hiring a driver is the hardest position to fill. Between [the government] closing loopholes and the new restrictions in place, it has put constraints on my existing fleet.”

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Jaeckle Distributors to offer Florida Tile in additional territories

Madison, Wis. – Jaeckle Distributors, a family-owned wholesale distributor based in Madison, Wis., will be expanding the territory in which they offer products from Florida Tile. Jaeckle will now be distributing Florida Tile products in Missouri and Southern Illinois.

Jaeckle Distributors has a decades-long relationship with Florida Tile. Having distributed Florida Tile in other states, Jaeckle looks forward to providing the same value to a new area. “As a distributor of Florida Tile for nearly 40 years, we’re thrilled to be able to service our customers in Southern Illinois and Missouri with this fantastic product line,” said Jeff Jaeckle, president of Jaeckle Distributors.

For more information, visit jaeckledistributors.com.

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Resilient: Can WPC/rigid core coexist with LVT?

May 22/29, 2017: Volume 31, Issue 25

By Ken Ryan

 

The overarching luxury vinyl flooring category featuring the incumbent LVT/P and newcomers WPC and rigid core continues to flourish and growth rates collectively are expected to exceed that of every other flooring category for at least the near term.

Will there be an eventually category champion? Does there have to be one? Flooring executives differ slightly on which segment will win out, but there is consensus that the three product types (for now) will peacefully coexist as they serve different market segments and applications.

WPC/rigid core: The once and future king?
Screen Shot 2017-05-30 at 10.15.49 AMAs a sub-segment of LVT, WPC/rigid core has usurped LVT in many areas of the market, executives contend. “My sales have completely switched from LVT to WPC,” said Eric Mondragon, hard surface buyer for R.C. Willey, Salt Lake City. “WPC definitely has had the biggest growth, and WPC/rigid core has an advantage in click and floating installations due to the ability to hide subfloor imperfections.”

Jeremy Kleinberg, senior product manager, Armstrong Flooring, said rigid core products are viewed by some as an evolution of LVT. “As with any innovation, rigid core products have helped to solve challenges that regular LVT could not—for example, telegraphing of minor subfloor texture.”

Some observers say that while WPC has already cut into the share of LVT, rigid core offerings will take share from both WPC and LVT. “While rigid will take share from WPC as well as LVT, I don’t think it necessarily translates into a decline of WPC’s overall business because WPC should more than make up for it in what it continues to take from LVT and other product categories,” said Jeff Jaeckle, vice president of Jaeckle Distributors.

Steve Kuhel, product manager, Tarkett North America, noted that next-generation rigid core products are beginning to show even greater flexibility and are a threat to both WPC and LVT (glue-down and floating). “I see more of the same over the next few years—growth for WPC and rigid core products. There will be a grasping at straws that will result in over-engineered products beyond the consumer’s needs.”

LVT is not going anywhere
As long as LVT/P products (glue-down or floating) have the advantage of cost, process and true sustainability over rigid core and WPC, there will be a place for these offerings. Indeed, no one disputes that LVT will remain a relevant product segment that works best in multi-family housing and commercial applications due primarily to the cost-effectiveness and installation advantages.

“LVT will be very successful in DIY as it is easy to install and does not require a saw,” said David Holt, senior vice president of builder and multi-family retail and hard surface for Mohawk Industries. “LVT will continue to dominate the multi-family market due to pricing requirements.”

Casey Dillabaugh, owner of Dillabaugh’s Flooring America, Boise, Idaho, picked up on the theme of pricing (given the fact WPC/rigid core is viewed as a higher-end product). “I don’t believe we’ll ever see WPC enter the sub $1 range like LVT, so LVT sets itself up for success based on price point primarily. I do believe WPC/rigid core will attempt to enter the commercial/multi-family space but will struggle for a while due to price constraints.”

Future looks bright for WPC/rigid core
The consensus among flooring professionals is the luxury vinyl product category will continue to grow exponentially over the next several years and outpace the other hard surfaces, in particular laminate, low-end wood and sheet. Jaeckle sees the category shaking out this way. “While rigid will take share from WPC as well as LVT, I don’t think it necessarily translates into a decline of WPC’s overall business, because WPC should more than make up for it in what it continues to take from LVT and other product categories. If you consider all of these as being under the LVT umbrella, then the LVT category will continue its strong growth as it takes more share from other product categories. The innovations of WPC and rigid are the engines that will drive that.”

Wellmade Floors, a relative newcomer to the category, is marketing its rigid core lines as a step up from WPC. Its high-density plastic composite (HDPC) products are positioned as the first fully closed cell offering, with different constructions. “While vinyl products across the board can all boast exceptional HD print visuals and EIR textures, WPC and rigid core products eliminated telegraphing from subfloor imperfections, a major improvement over traditional LVT,” said Steve Wagner, director of marketing, who, like many others, sees WPC and now rigid core as merely natural evolutions of the luxury vinyl category.

The case for coexistence
Screen Shot 2017-05-30 at 10.15.39 AMFew executives are as adamant in their belief that these products will cohabitate than Russ Rogg, president and CEO of Metroflor, who argues that traditional LVT and WPC/rigid core/multilayer products “will absolutely” co-exist going forward. “While there is no question that the multilayer category—with all its variants—is arguably growing faster than any product on the market, there are still many areas where traditional, glue-down products will serve the customer or end user better than a floating floor. While the best multilayer products require very little expansion/contraction allowances, I don’t know of a manufacturer that isn’t recommending at least some degree of perimeter expansion as well as referencing size/area limits that will require the use of a T-molding eventually. This is a great example of where a glue-down LVT has an advantage. Think large, open spaces that could not accept a T-molding, for example.”

Scott Rozmus, CEO of FlorStar Sales, a top 20 distributor, said he doesn’t see the market as an either/or proposition for these waterproof resilient products. “Some folks might look at this as VHS vs. Betamax where only one technology survives, but I think it’s more like gasoline vs. diesel. There are pros and cons that may come into play with either variant, and the technology continues to evolve. The massive marketing behind WPC/rigid core certainly has—and will—continue to provide lift for these products. However, most of the options I’ve seen utilize a floating, locking system for installation. That’s not always the preferred methodology and in some applications actually is frowned upon. Thus other LVT variants will continue to have traction.”

While WPC/rigid core may not cannibalize LVT, it has eaten into traditional LVT’s share. Kleinberg’s take is that even as next-generation rigid core products win favor in the market there will still be demand for traditional LVT products. “Segment and channel considerations like the usage of the space, design aesthetics, installation techniques and price will be just some of the factors that will continue to fuel both rigid core and traditional LVT flooring.”

Piet Dossche dissects LVT, WPC
Who better than Piet Dossche, CEO of USFloors, marketer of the award-winning COREtec brand, to weigh in on the evolution of the LVT waterproof category. Here Dossche drills down into the different constructions that he said complement one another and help expand the overall category.

Solid LVT dryback. Mainly used in multi-family, commercial applications and where consumer price point is critical. Installed directly glued to the subfloor and requires extensive subfloor prep.

Solid LVT floating. Used in residential and commercial applications where subfloor conditions is addressed; exposure to sunlight/heat is not critical, but pricing economics is a factor. Requires substantial subfloor prep.

Rigid core. Composite core construction, a step up from solid LVT, with a higher filler content and higher density without any foaming agent creating air bubbles in the core. This results in a thinner, harder plank.

Primarily suitable where higher indentation resistance is required and extensive exposure to sunlight/heat can occur. Ideal for commercial applications. Relatively forgiving over imperfect subfloors.

WPC. Composite core construction with foaming agent, creating air pockets in the core that function as a heat and sound insulator for ultimate comfort underfoot. Indentation resistance is ideal for residential and light commercial applications and dimensionally stable under moderate exposure to sunlight/heat. The ultimate product for residential environments and suitable for active households with built-in sound abatement benefits.

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Jaeckle Distributors wins Mannington’s 2016 President’s Award

2016 Mannington Award PhotoMadison, Wis.– Jaeckle Distributors, a Madison based third-generation, family-owned company was recently awarded the prestigious 2016 President’s Award for its residential sales performance in 2016 from Mannington Mills at the recent Surfaces trade show serving the floor covering industry. This is the second year in a row that Jaeckle Distributors has won this award.

“Mannington is our largest supplier and we are honored to be a top performer amongst our peers,” said Jeff Jaeckle, president of Jaeckle Distributors. “Achieving this award two years in a row directly reflects the dedication and commitment to excellence of our entire staff and we look forward to a long and prosperous relationship with Mannington.”

 

Pictured accepting this award is Jeff Jaeckle, president of Jaeckle Distributors (left), Ed Duncan, president of Mannington Residential (center) and Torrey Jaeckle, vice president of Jaeckle Distributors (right).

 

 

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NAFCD: Mood, attendance on the rise as business rebounds

Speakers, revamped structure lend to event success

Nov. 18/25 2013, Volume 27/number 15

By Jenna Lippin

Screen Shot 2013-11-25 at 11.04.42 AMChicago—The mood through-out the 2013 annual convention of the North American Association of Floor Covering Distributors (NAFCD) + North American Building Materials Distribution Association (NBMDA) held here Nov. 12-14 represented a new phase of the flooring industry, one that many members have been awaiting. Optimism is spreading, business is better and as one attendee said, “These things are fun again.” Continue reading NAFCD: Mood, attendance on the rise as business rebounds

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Distribution: Resilient

Why LVT is today’s flooring sensation

By Ken Ryan

Oct. 21/28 2013; Volume 27/number 13

Luxury vinyl tile (LVT) isn’t merely the shining star in the resilient category—it may just be the best all-around product the flooring industry provides its customers, according to some distributors who continue to grow their businesses on the back of LVT offerings.

“First off, it is a visually stunning product,” said Jeff Striegel, president of Elias Wilf. “You cannot tell the difference between LVT and wood, the visuals are that amazing. And the performance…I don’t think there is a better product out there in the market than LVT.” Continue reading Distribution: Resilient

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Distribution: Laminate

Innovations sustain category

By Ken Ryan

Oct. 21/28 2013; Volume 27/number 13

Despite several down years, laminate flooring is far from a dormant, forgotten category. All it needs, according to distributors, is a few good products active on the market.

The idea of popular laminate is not as far-fetched as it seemed not too long ago. “Laminate is not dead at all,” said Buddy Faircloth, president of Cain & Bultman, Jacksonville, Fla. “If you have the right product, people are going to buy it. Ask Armstrong if you want proof of that.”

Faircloth spoke highly of Armstrong’s recent introduction of Architectural Remnants, a 12-mil laminate that features striking wood designs inspired by reclaimed hardwood floors. With its unique whitewash finish, the product is taking off in coastal Florida. “It really sells here. It has generated a lot of excitement,” he said. “There is nothing out there quite like it. It’s an important product that has hit our marketplace at the right time.” Continue reading Distribution: Laminate

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NAFCD elects 2013 board

ORLANDO, FLA.—The North American Association of Floor Covering Distributors (NAFCD) has announced its 2013 slate of executive officers and directors.

Executive officers appointed for 2013 include incoming president, George Roth of Lockwood Flooring; vice president, Craig Folven of Herrigan Distributors; secretary, Rosana Chaidez of J.J. Haines, and treasurer, Chris O’Connor of CMH Space Flooring. Continue reading NAFCD elects 2013 board

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NAFCD announces 2012 award recipients

CHICAGO – The North American Association of Floor Covering Distributors (NAFCD) is proud to announce 2012 Lifetime Achievement Award recipients Mort Creech of JJ Haines, Ben Hagood of W.M. Bird & Company, and Ken Herriges of Herregan Distributors, as well as 2012 Leadership in Action Award recipient Bill Simonson of Jaeckle Distributors.

The Lifetime Achievement Award recipients were honored for their exceptional leadership and contributions that have helped expand the floor covering distribution industry. The Leadership in Action Award honors up and coming leaders whose innovative practices have resulted in positive business growth. Continue reading NAFCD announces 2012 award recipients

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NAFCD announces 2013 officers and board members

Chicago– The North American Association of Floor Covering Distributors (NAFCD) announced its 2013 slate of executive officers and directors at the 2013 NAFCD Annual Member Business Meeting during the 2013 NAFCD Annual Convention and Executive Networking Forum, in Orlando, Fla., November 13-15.

Executive officers appointed for 2013 include: Continue reading NAFCD announces 2013 officers and board members