A Dangerous Gamble
Rybin Aleksandr

A Dangerous Gamble

In the wake of last month’s snow events, the reliance on just-in-time inventory for salt was a dangerous and costly wager for snow pros unaccustomed to so many consecutive intense events. Contributor Rob English explores the lessons learned.

March 4, 2021

Many snow professionals relying on deicing product were lulled into a sense of false security over the past few years. Low snowfall totals and warmer winter temperatures allowed complacency to enter contractor thinking when anticipating winter supplies needs. Just-in-time inventory for deicing supplies was working fine and many figured “Why stock up on salt when it can be delivered within a day or two when needed?”  

That line of thinking proved to be a hollow expectation with the plunge of cold and snow that covered 75% of the US in February. Many were caught short handed on supplies, and many regions that seldom experienced snow and ice had nothing to fight the storms when they arrived.

The situation in Texas was pretty hard to witness as so many parts of the state’s infrastructure collapsed under cold they hadn’t seen in decades - if ever before. The ice storms prevented emergency responders from reaching folks in need and the subfreezing temperatures that persisted for a week wreaked havoc on many levels. Roads and highways were impassible; massive traffic pileups on interstates dominated the news along with the record cold. We all saw it and most of us lived it.  

The snow contractors and end-users who were prepared for winter’s worst fared fine. However, those snow professionals who had no equipment and supplies for snow fighting not so much. So, this begs the question of “How do we avoid that happening to us again?”  

It is much easier than most realize to avoid a salt supply catastrophe and it involves a commitment to planning and some financial resources.  I’ve said for decades that the market must take more risk to avoid these problems going forward.  Snow-belt municipalities, pretty much universally, try to maintain between three-to-five winter storm events of deicer inventory at all times.  

Private contractors rarely have more than one storm of snow-fighting chemicals on the ground.  The reasons, I believe, are a lack of storage capability coupled with a reluctance to take the financial risk (there’s that risk word again) of buying inventory they may not use and then have to store indefinitely.  

Working closely with your snow and ice product suppliers over the coming summer to develop accurate predictions of what you think you will need for the winter and then signing a contract for that quantity will go a long way toward avoiding disappointment in supply.  This allows the supplier to balance their contract commitments from their customers along with their supply sourcing.  Just using what was taken the previous year can be too little, too much, or somewhere in the middle.  Accurate predictions of what is needed are crucial and will ensure on-going supply. Salt suppliers always try to build a little cushion into their inventories for the unexpected, but it is impossible to see demand increase five-to-eight fold and not expect some collapse.

If you were caught short this year, simply changing suppliers may accomplish nothing unless the new supplier has a proven track record and practices these measures of contracting with their market and the supplier taking their own risk to some degree.  With no contract, the entire risk is on the supplier and therein lies the trap of how supplies can run short or completely out.

For the snow-contractor, this should be a trickle-down event; going to your snow removal clients and enjoining them in this same contract process to reduce risk and ensure ongoing supply for them so that they are part of the solution and are not blaming the snow removal contractor for failure.  

When heavy demand taxes suppliers beyond their inventory, that’s when tons are allocated only to contract customers (municipal mostly) and why the spot buyers are the first ones excused from the party.

Contributing Editor Robert S. English is president of Chemical Solutions Inc., based out of Franklin, Mass. He writes often about issues pertaining to the salt and deicing industry including his regular State of Salt columns. You can reach him at rob@meltsnow.com