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This is a part of the 2014 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.
2014 Distribution Trends Report
Distributors are recovering from the adverse weather of the first quarter. Harsh winter conditions in the first couple months of the year shut down a lot of distribution centers and brought transportation channels to a halt. "We were impacted in the first quarter by the weather because we basically operate from Pennsylvania down to Georgia on the east coast,"says Don Schalk, president and COO of specialty building materials distributor C.H. Briggs Company, Reading, PA. "We lost 25 percent of our delivery days in February."
Economic conditions are improving across the sector. According to the Institute of Trend Research, 2015 should see a significant improvement in the construction market, with the market strengthening even more from 2015-2018.
"We continued to perform very well in the commercial markets, we’ve got a lot of projects in our pipeline," Schalk says. "We have seen a nice rebound in residential remodel and our customers that deal primarily with the retail trade have said that their activity is the best it’s been since the crash in 2008."
Customers are looking for faster information. With the rise of e-commerce and the bleed of B2C expectations into the B2B world, customers are expecting information faster than ever before. "We’re working very hard in continuing to implement technology to respond to our customers quicker, provide them information faster," Schalk says.
HR continues to be an issue. "We have some open positions where I think, quite frankly, we’re struggling to find qualified candidates with the skill set that we require. And that’s happening particularly because, as technology changes the way you go to market, some of the people that may have some of the traditional skills that we’re looking for, they’re lacking some of the skills to use some of the technology we have," Schalk says.
Apart from internal hiring concerns, distributors who have fleets are also struggling to find qualified CDL drivers, he says.
Technology is becoming a bigger influence in the industry. "I think that you’re going to continue to see technology be rapidly introduced in our industry," Schalk says. "Probably a lot faster than we even think and that I think because of companies like AmazonSupply and some of the things that Grainger and others are doing, we really have to look at our business model and make sure that that business model is one that allows us to compete and compete profitably."