So, here's the deal...
Over the past two years Traxx has been quietly buying multiple companies and consolidating both tackstrip and underlayment manufacturing. They own the majority of the market here in the U.S. and they sell under multiple brand names. The plywood that is used for the manufacture of stip is imported by them. About September of last year they instituted what they refer to as an "Oceanic freight surcharge" on several of their products including strip and underlayment. The way they are working it is they start with a base charge. Let's say for example that the base charge is .50 / carton of strip. Each week they evaluate their incoming oceanic freight costs and they publish a "multiplier" which is a factor to multiply the base charge by for any material that you purchase that week. In December this "multiplier was roughly stable at around 8 or 9. It's currently at 14 and rising. It's been as high as 24. Now if you do the match that's currently adding $7.00 - $7.50 per carton just in freight cost.
This is all a direct result of oceanic shipping companies playing all kinds of games. About 14 months ago they started increasing their "container retention charge" which is a fee on top of the actual freight and other fees that guarantees that a container will be available at the port where the purchaser is moving their material from. This charge prior to the pandemic was roughly $800.00 to $1000.00 per container. During the past 18 months it's been as high as $24,000 per container. Again, that does not include the actual freight, port fees, applicable import taxes or anything else that goes into importing a product. Those charges started to drop in the 3rd quarter last year and then began rising again and have continued to rise or stay flat over the past six months.
This also doesn't include the domestic ground freight charges which have gone through the roof due to inflation and the rising cost of fuel.
In addition, lumber began rising again and has continued to rise over the last several months. So the actual cost of the strip itself is up roughly 40% over the past 14 months or so.
It is starting to impact the box stores as the ones closest to me are well over $50.00 per carton and continue to increase and that's IF you can get product. There are still allocations on underlayment / plywood.
The real problem with this weekly "check with me" costing is at some point, we as suppliers are going to get stuck when the price starts dropping because if you're cost is that high when you buy and the price drops you're stuck with a bunch of overpriced strip that isn't competitive and won't sell. This is one reason it's getting harder to find because no one wants to buy a bunch of strip and then sit on it if the price falls out.
Beside strip and underlayment these same "Oceanic Freight Surcharges" are also impacting - Blades (Traxx now owns Personna), staples, and seam tape. You can also bet that the other vendors are watching this closely and will do something similar to increase profits. It's a copycat world right wrong or indifferent!
We're also having issues with cement board being on allocation, PVC resins are still creating production delays with sheet vinyl and laminate. We've recently started to see raw material allocations and shortages affecting wall base and flooring transitions. LVT hasn't been as impacted as some of the other flooring categories with regards to raw materials but decor film (no one makes film in the U.S.) and oceanic shipping costs and delays have been the big issues with the category. Wood flooring is fairly readily available but the costs have skyrocketed more than any other category. In many cases pricing has more than doubles the past 24 months. Carpet cushion and anything else made with foam such as foam board (Kerdi board, Wedi Board, Laticrete's Hydroban board are also being impacted by raw materials allocations and have been difficult to get.
It's certainly one of the most challenging and volatile times I've experienced in 27 years of distribution. It's beginning to impact businesses at ourlevel and drive people to close or be "consolidated" by one of the larger chains. It'll be interesting to see who is left standing when things begin to settle out. At any rate, now you know the other side of the story.