El Nino wreaks havoc nationwide
El Nino is leaving its mark on distributors across the country, from the West Coast to upstate Maine
By John R Johnson -- Industrial Distribution, 4/1/1998
Newton, Mass.--There are almost 3,000 miles between Lewiston, Maine and San Francisco, but Chuck Feeney and Andy Bullard have both seen the impact of the weather phenomenon El Nino. Ironically, Feeney's East Coast Tool Service in Maine has been hit harder than Bullard's San Francisco-based C.H. Bull Co., located in the very state hit hardest by El Nino.El Nino has been bearing down on the West Coast with heavy rains since January, causing severe mud slides and major flooding. The weather pattern then typically proceeds across the southern states, where it kicked up major tornadoes in central Florida last month, and up the East Coast, usually in the form of heavy rain, according to the National Weather Service. The entire country has seen higher temperatures this winter because of El Nino's warm weather pattern, triggered by abnormally warm waters in the Pacific Ocean.
El Nino's effects have been widely scattered. Damages are expected to easily exceed the $13.5 billion in worldwide damages caused by the last El Nino-related weather system in 1982. Mud slide damage in California alone is expected to exceed $1 billion. But some distributorships have actually gained business by stocking up on pumps and weather-related products like tarps and rain gear. Rental firms have also seen high demand for products.
Others, like East Coast Tool Service, have been literally slowed to a crawl. El Nino struck the Northeast -- Maine in particular -- in the form of two giant ice storms within a 10 day period in January. The result? Feeney says he lost about 75 percent of his business over a two-and-a-half week period in January. For the month, sales were down about 33 percent. Things rebounded nicely in February, but Feeney still had to take out a loan for the first time in his company's history to pay his bills in January.
East Coast Tool Service is heavily oriented toward servicing power tools, "and if a third of the state is without power, there isn't much need for that," says Feeney. "I lost production, no matter how you look at it. For the first time in seven years I had to go to the bank to get a loan to tide us over, which tells me it was quite a problem. I had payables and I had to pay them."
Bullard is thankful to tell a different story. His firm has actually benefited slightly from the stormy weather because of the increased need for work on foundations.
"Some of the contractors we deal with are foundation contractors, and we're seeing a little benefit from this unfortunately," said Bullard. "We do hydraulic jacking systems where we may have to support [a building] while they do a new foundation, and that type of thing seems to be ongoing here. I've always said if you want to see a boost in business give us a good natural disaster, but this really is unfortunate. But we have not been drastically affected, and we haven't seen a drastic increase in business because of it."
But El Nino is slowing business at some California distributorships. More than anything, it is forcing some companies to adjust their buying patterns, lightening up on products linked to home building, while stocking up on weather-related goods.
"I would say it has effected us in both ways," says Frank Joost, general manager of Carpenter Rigging and Supply, also located in San Francisco. "It has got us more business and it's been very effective at slowing down the construction industry, which has slowed us a bit. I guess a better way to analyze it is that it's changed our business a bit."
That's also the case at Santa Barbara, Calif.-based Specialty Tool & Bolt, where company president Scott Wardlow says sales were off about 12 percent in January. And while two of the area's biggest construction projects have been slowed by bad weather, Wardlow says his company -- which relies heavily on the oil industry -- has been effected more by the nation's warmer temperatures, which means lower oil prices. Aside from lost sales, Wardlow and his sales staff must spend more time planning sales calls, taking into account the many closed roads throughout the area.
"January slowed up considerably because people weren't driving around and picking things up," says Wardlow. "Walk-in sales have dropped because of El Nino. But what's hurt us more has been the price of oil dropping. Oil production companies don't do as much maintenance because it's not as cost effective."
Distributors in the south haven't escaped unscathed, either. Shannon Worthington, vice president of sales for Dixie Construction Products, says that rainy weather has definitely slowed construction, although Dixie's sales are up from last year.
"We've had so much rain, business has been hot and cold," says Worthington, whose firm relies heavily on commercial construction. "The weather has slowed a lot of things coming out of the ground. If we could put together a solid week of sunshine, things would really heat up.''
But Bob Shluzas, director of marketing for Nicor Products, Inc., a fastener distributor based in Orlando, Fla., says the tornadoes that ravaged the area created quite a bit of roofing business for his firm. However, he says that the true effects of natural disasters of this type often aren't felt until a month or so afterward. "Right now, people are waiting for their insurance checks and checking contractors," says Shluzas, who noted a similar pattern after Hurricane Andrew hit a few years ago.
However, the firm has also donated at least a truck full, or about 10,000 nails, to help local agencies and contractors board up damaged homes and businesses immediately following the storm.
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