Surviving A Coal Tar Shortage

Steps contractors can take to lessen the impact of any disruption in coal tar sealer delivery.

Those in the sealcoating industry who rely on refined coal tar sealer might face a more challenging year in 2007 than they faced last year. While many of the difficulties the industry is likely to encounter are beyond the control of contractors (and even sealer producers), there are steps contractors can take to lessen the impact of any disruption in coal tar sealer delivery.

First, buy material from more than one sealer supplier. This is not always an option, especially for smaller contractors, but if you can establish a relationship with multiple sealer producers you have a better chance of keeping material coming to you all season.

Second, offer other sealcoating materials in addition to coal tar. If coal tar sealer supply is disrupted, contractors who also apply asphalt emulsion sealer or asphalt/coal tar blends will continue to have material to work with. And if you start the season offering more than one material to your customers you won't look like you're switching materials mid-season.

Third, keep an inventory of sealer beginning at the start of the season. Just-in-time delivery has been the mode of operation for most contractors (and producers) because storing material ties up money. But in situations such as the one faced by coal tar users it might be possible to weather any disruptions in delivery if you start the season with an inventory and then continue to replenish that inventory regularly. So look at how much sealer you expect to use during the year, then add a bulk tank to store a third or half of that amount at the beginning of the season when material is usually plentiful. Again, this might not be an option for smaller contractors, but if you can swing it it just might keep you working while others are scrambling for material.

Finally - and this might be the most important step all contractors need to take - make sure you bid upcoming jobs based on your expected price of coal tar sealer this year. The cost is likely to skyrocket - producers warn of the biggest price hikes in history - so make sure you have a price commitment from your supplier before you start to bid work. Also, ask your supplier how long that commitment is good for. With the volatility expected you could be facing frequent price adjustments.