I’m always on the lookout for salt price information. At this time of year, you begin to see mentions of DOT prices pop up here and there as government bodies secure their salt purchasing for next winter.
Commercial contractors are a little farther down the pecking order from the DOTs, and typically need to wait in a pricing limbo until those government contracts are signed.
A recent article from Trumbull Country’s Tribune Chronicle (http://bit.ly/2ZbYr4U) offered a glimpse of the price per ton that many Ohio counties planned to pay in preparation for Winter 2019-20.
According to the article, Trumbull County had secured $69.60 per ton price from Morton, a nearly $.12 increase over last year.
The article further states: “The price at which the county is purchasing its road salt for next winter still is among the lowest in the state, according to information provided by the Trumbull County Engineer’s Office. Only eight counties — Lake ($63.13), Ashtabula ($68.44), Geauga ($64.39), Sandusky ($69.38), Ottawa ($69.22), Lucas ($69.44), Putnam ($68.32) and Wood ($69.39) — have lower winter fill prices, according to a map provided by the Ohio Department of Transportation that shows the prices all 88 counties are paying.”
The article further states that Ohio salt prices swing from a low of $63.13 to nearly $100 per ton.
Five salt companies -- Cargill, American, Detroit, Morton and Compass -- supply Ohio's counties.
What struck me as interesting was the fact that, to avoid a rock salt stick shock and purchasing limits, a dozen Trumbull Country communities were purchasing their salt through the parent county’s consortium.
It made me wonder why commercial contractors weren’t creating their own salt consortiums to leverage lower prices and secure sufficient tonnage. To be honest, I’d heard rumblings of similar purchasing groups in the past, typically created in the wake of an extreme winter that experienced sky-high prices and dangerous shortages. But eventually salt prices return to normal and I didn’t hear much about it any longer.
Now that we’re seeing prices remain high (and even continue to climb, in some cases), maybe it’s time to talk about salt consortiums again for the commercial market?
What are the pros and cons? Would you, as a commercial contractor, be interested in making a bulk purchase with your other colleagues. What's the risk, and would the ROI outweigh it? And most importantly, would the salt companies be receptive to working with commercial purchasing groups?
I welcome your thoughts and insight. Reach out to me directly at email@example.com.