Steeling for Shortages

STEELING FOR SUPPLY SHORTAGES

As predicted by the Institute for Supply Chain Management at the beginning of the pandemic, resources we frequently take for granted are in short supply: microchips, building supplies…even garden seeds. Oh, and Perlite and fiberglass are in short supply, too.  

What the heck is Perlite? It’s a key component to Fireguard® Steel Tanks. Which may explain why you might be experiencing longer lead times on a Fireguard tank no matter where you call.

Fiberglass shortages affect Permatank® and the ACT-100® model tanks, but we’ll get to those in a minute.

FIREGUARD TANKS AND PERLITE

Trademarked by the Steel Tank Institute [STI], all Fireguard Tanks are built to STI standards and use STI distributors for their materials. As mentioned, Perlite is a key component: it is used to mix an insulation barrier between the two walls of the tank. To find out why there is a shortage, we caught up with Sales Manager Jerry Schollmeyer, who has been with Morrison Bros. for 37 years. Morrison Bros. is the distributor for Perlite.

“We’ve never experienced a shortage in Perlite before. Most of what we manufacture is made right here in Iowa. Perlite is a different story. We are simply the distributor for the ingredient and have been since 2006. Strong [Company] mines the material in Mexico and processes it in New Mexico, before it’s shipped here. COVID affected some of the mining, so that created some delays. The snow in February then created additional shipping delays.”

Jerry continues, “But a bigger reason for the Perlite shortage is the number of states legalizing cannabis and marijuana.”

Umm, what?

“The growers put it in the soil for growing.” A quick Google search shows this to be true — Perlite is the primary ingredient in popular garden feed Miracle Gro. “So that’s also having an impact on supply,” Jerry explains. Fifteen states have legalized marijuana:  four did so in the 2020 election alone.

“But the great news is the situation will soon rectify itself. Demand was so high, Strong not only moved to a faster production schedule, but they went out and found new sources in Oregon and Georgia. So we should see the situation rectify itself within the next few months.”

ACT-100®, PERMATANK® AND FIBERGLASS

Fiberglass is also facing some challenges.  Mike Floyd of North American Composites, the STI distributor for fiberglass, explains, “When the Chinese got into producing fiberglass years ago, most American companies got out – not enough margin. So when tariffs were imposed on Chinese fiberglass in 2018, we were left with only one domestic supplier here in the U.S., and that’s Owens-Corning. For everyone. Not just for manufacturing, but for the construction industry too.  

“Then the pandemic hit. That slowed production, while building soared. And suddenly everyone wanted an inground pool for their staycation, too. Those use a lot of fiberglass,” Mike explains. Another quick Google search shows that demand for inground pool construction quadrupled during the pandemic.

The Texas freeze compounded fiberglass shortages. “Most of the fiberglass is made in Texas, but they didn’t have power. That created a couple more weeks’ worth of delays,” Mike adds. “All of which means the glass is in high demand, and currently allocated based on a percent of what you ordered. If you ordered 100,000 lbs. of glass in March, you’re going to get 25,000 lbs. of your order sometime later.”

DRIVER SHORTAGE

“There’s also a driver shortage, and that’s affecting delivery times,” Mike continues. “We’ve had shipments that only need to be driven an hour from here. It’s actually harder to get a driver for that distance than it is something going hundreds of miles. The driver and/or company can make a lot more money based on distance, so shipments that should’ve gone Friday may have to wait until Tuesday the following week. And the cost goes up with demand.”

While almost 71% of all American freight is transported by truck, the shortage of truck drivers in the U.S. has been going on since 2018. It is estimated the industry will need to hire 1.1 million drivers over the next 10 years.

TAKEAWAYS

Bet you didn’t think pools, pot, power and portability would be the explanation behind delays in some models of steel tanks, but truth is still stranger than fiction.

For the time being, our strongest recommendation is that if you know you are going to need Fireguard tanks, Act-100 tanks or Permatanks, order earlier than you normally would. While both distributors stated they expect the situation to resolve in the next couple of months, planning ahead is just good common sense.

“And we’re all going to have to learn to be a little more patient,” Jerry adds.

That’s always a good lesson, too.

Business View Magazine Feature: Newberry Tanks & Equipment LLC - Investing in Innovation

Newberry Tanks & Equipment LLC – Investing in Innovation

Every company dreams of innovating: shiny new products, new and leaner internal processes, as well as shedding maddening, outmoded business customs within their industry. And yet obtaining that level of innovation, let alone successfully marketing those innovations to busy customers, can seem an insurmountable task. How does one get there? Read the new article featuring Newberry Tanks in Business View Magazine: https://businessviewmagazine.com/digital-magazines/dec-2020/87/

The Golden Arms: Welding at Newberry Tanks

The Golden Arms: Welding at Newberry Tanks

“Quality is never an accident,” or so the saying goes. But what goes into quality, and/or craftsmanship? Specifically, when you’re talking about welding? Is craftsmanship purely raw talent with the torch, or does it require more?

While welding a sculpture arguably requires only talent, welding steel tanks for oil and petroleum storage requires not only skill, but dedication, effort, and discipline, every day on the job.  Each and every oil tank must perform perfectly for the thousands of oil jobber, lube, PEI and agricultural industries that rely on oil and petroleum storage so their own businesses can function. The tanks must also meet industrial, fire, and governmental compliance codes, to protect our safety and our environment. In short, every tank, must be a masterpiece. That’s a high bar.

We decided to pay a visit to the production floor, to find out more about how Newberry achieves that kind of craftsmanship.

Welding with Confidence

The heat is the first thing that strikes you on the floor.

“In the summer, it can be over 100 degrees in here. We have fans and forced air to keep them cool, but welding is by nature hot. And they’re standing a lot of the time, probably 50-75% of the time,” Jerry Cagle explains. Cagle, Director of Inside Sales and Customer Service at Newberry, has been with the company for more than 45 years.

More than 70% of the welders at Newberry have been with the company 10 years or more, and most in the trade for a decade more. As veteran welders, the majority are in their 40’s or 50’s. It’s difficult to imagine what kind of endurance they must have to withstand the heat, let alone, how much of the day they are on their feet at that age. Recruiting veteran welders, let alone retaining them, must be difficult?

Cagle nods, “We know what we have in our guys, and we respect them. We let them work at their own pace, decide when they need breaks.”

Measure Twice, Fit Once

The floor is alive with activity: gas tanks, diesel tanks, DES tanks, and of course oil storage tanks are all in production. So what is the process for their craftsmanship?

Jerry explains, “The steel is brought out in flats for rolling. We use a standardized, A Grade 36 steel for all standard tanks. As a member of The Steel Tank Institute, we have to use codified, optimal materials. There’s never any question of substitutions, because as an STI member, we are subject to period unannounced inspections, to ensure the materials and that every tank is built to all applicable UL codes in material and design.”

He continues, “Now once the steel is on the floor, we use a Lean Manufacturing process. Every tank is made by one welder start to finish, rather than a team. He’s assigned a tank – say a 10,000-gallon tank. And he’s allotted 8 hours to build that tank on his own. It’s a semi-automated process but he rolls his own sheets out. A 10,000-gallon tank requires five shells. The welder must get them absolutely even – length width and depth. If they miss by even one inch, they’d have problems once they got to the weld – any error like that and it wouldn’t fit up. So they measure everything twice. There’s no room for any mistakes.”

Flux Core Welding & Butt Joints

The true Newberry difference in design is due to flux core welding, as well as butt joints. They require skill from a welder, as well as patience and intention. 

“You have to hold the gun precisely in one position, for quite some time,” Jerry explains. “The gun has a little trigger on it. You pull the trigger and wire shoots out of the arc. The arc comes up when the wire hits the steel, melting the wire and fusing the steel. The beauty of the flux core is that it actually does a better job keeping foreign metals out of the melted steel and that helps give you a good weld. If it didn’t have the flux core it would have all kinds of pin holes in it and bubbles and blisters, trash and dust.”

“Some of our competitors still use a sub-arc technique, but we switched years ago after we compared both methods and realized that a sub-arc is slow, which means the build is slower, and that adds to the cost for the customer.”

“Saving time with the flux core technique also means we can use butt joints, which are stronger than the lap joints a lot of our competitors use. A butt joint means they abutted two pieces of steel and welded that seal inside as well as outside. A lap joint – or joggle joint – is an overlap joint. It’s not welded on the inside. That means it’s a weaker point on a tank.”

Work Fast, Work Well

Once the tank is welded, the welder will test the tank himself: air test, test for leaks, structural variables, any kind of damage or weakness. If the tank passes every test, the process will be repeated by another welder on the floor to ensure the test itself is correct before the tank is sent out the door as a finished product.

“Our welders work fast. First, because they can: they’re all veterans, as I’ve mentioned. But also there’s a built-in bonus if they can build that 10,000-gallon tank in less than the 8 hours allotted. That’s how we keep our welders happy:  they can make more money at Newberry.”

But how does working faster mean better? Isn’t there a risk something would get overlooked? No. Newberry has a failsafe: their Lean Manufacturing principles mean only one welder works on each tank, and each tank has a production number. The welder’s name is inseparable from the quality of his work.

But it’s more than that to these “Golden Arms”, as true artisan welders are called. It’s a matter of pride. Jerry explains, “Frankly, if there was a problem, these guys would pull the tank themselves rather than have the other guys see it.”

NEWBERRY TANKS WINS BIG AT BUSINESS AWARDS® SECOND YEAR IN A ROW


West Memphis, AR May 4, 2021– For the second consecutive year, the American Business Awards® announced that oil and petroleum steel tank supplier Newberry Tanks & Equipment LLC is the recipient of multiple Stevies including:

  • GOLD for New Product Industrial Products & Services – Skid Tank
  • SILVER for Most Exemplary Employer during COVID
  • BRONZE for Achievement in Customer Satisfaction

More than 3,800 nominations – a record number – from organizations of all sizes and in virtually every industry were submitted this year for consideration in a wide range of categories at the American Business Awards and more than 250 professionals worldwide participated in the judging process to select this year’s Stevie Award winners.

Best New Industrial Product – Newberry’s Code Compliant Skid Tank

Newberry’s innovative and environmentally conscious Code Compliant Skid Tank won gold for Industrial Product of the Year. The balanced “no swing” design better ensures workplace safety for staff, while adding another level of protection against chemical spills. Additionally, the skid tank can be moved with a simple forklift, saving customers thousands of dollars per year on hiring a crane. Judges cited:

“New skid tank design with high priority to workplace safety, no swing design, and the ability to move with the forklift offers a great benefit and value to industrial clients.”

“Storage has been a major issue and needs lot of attention to combustible fluids. This mobile tank will help business’ need for storage.”

Most Exemplary Employer during COVID

The ABA also recognized Newberry Tank’s adeptness in weathering the storm of the COVID pandemic and a collapsing economy. Thanks to solid management skills and confidence, the West Memphis steel tank supplier retained all staff throughout the pandemic, never suffered an outbreak on the floor, and nevertheless achieved year over year revenue growth. One judge commented:    

“Newberry kept employees safe, their wages increased, the company grew in size and revenue, all while acting as a responsible corporate citizen in their community.”

Achievement in Customer Satisfaction

Recognizing Newberry’s dedication to Customer Service, and new customer service initiatives such as their 3-call system, Judges said:

“Positively uplifting…a company pivoting on the importance of customer satisfaction with communication, commitment, and care.

“Newberry Tanks delivered tanks on time and defect-free in the toughest conditions, specifically Hurricane Laura.”

In response to all three awards, Newberry Tanks President Matt Kohnke commented, “We’d like to thank the judges at the American Business Awards, our customers, and most of all, our staff at Newberry. In the most trying of year of a century, this team came together to not only meet the challenge, but overcame it, demonstrating a heroic level of skill, grit, and determination. We couldn’t be prouder of all of you.”

Media inquiries regarding this release should be directed to publicist Kathleen Hannon (704) 912-0209 or via email at khannongb@aol.com.

About Newberry Tanks

For more than 90 years, award-winning Newberry Tank and Equipment has been manufacturing quality aboveground and underground steel tanks for the American Supply Chain and every branch of the U.S. military. The “Think Tank” of Oil and Petroleum storage, Newberry Tanks is intent on innovation: offering tanks on demand, dedicated customer service, turnkey solutions, and the fastest delivery in the country. *Ask about our Preferred Customer Program 

About the American Business Awards®

Stevie Awards are conferred in eight programs: the Asia-Pacific Stevie Awards, the German Stevie Awards, the Middle East & North Africa Stevie Awards, The American Business Awards®, The International Business Awards®, the Stevie Awards for Women in Business, the Stevie Awards for Great Employers, and the Stevie Awards for Sales & Customer Service. The Stevies also produce the annual Women|Future Conference.  Stevie Awards competitions receive more than 12,000 entries each year from organizations in more than 70 nations. Honoring organizations of all types and sizes and the people behind them, the Stevies recognize outstanding performances in the workplace worldwide. Learn more about the Stevie Awards at https://www.StevieAwards.com.

Newberry Tanks welcomes Bert Tanner

Newberry Tanks & Equipment is proud to welcome Bert Danner as our new Regional Account Executive for Alabama, Mississippi, and Tennessee. Bert is a sales executive with 14 years’ experience in both commodities and capital equipment sales in the Automotive/Aerospace/Steel/Oil & Gas markets.

Fun facts about Bert: he’s a veteran officer of the U.S. Navy, an Auburn Tiger, an MBA, and proficient in Mandarin, Spanish, and Portuguese.

Bert will continue to reside in Birmingham, AL, with his wife Julianna and their son Roman. He joins us the week of April 26th, shortly after which, he’ll be zooming his way to all of you.

Please welcome Bert to the team!

WHAT IS UP WITH THE COST OF STEEL?

WHAT IS UP WITH THE COST OF STEEL?

The price of steel is at levels not seen since 2008, just before the market crash. And according to MarketWatch, the peak is not yet in sight. As a manufacturer of steel tanks, this is unwelcome news to us, as we know it is to our customers.

We recently reached out to Sean McGahan at Shamrock Steel, an STI affiliate steel distributor who has worked in the business for two decades, to get a better understanding of why steel is spiking so dramatically.

The first thing he did was show us a letter he’d sent to his own client, explaining how his own company had been affected by the 96% increase in the cost of steel since June 2020.

COVID and Tariffs

McGahan explains, “One of the reasons for the spike is, of course, COVID.  The uncertainty led to steel distributors letting their inventories get too low, and steel mills reducing their production in anticipation of slow sales.”

The fact that steel mills shuttered a full third of production from March to June of 2020 is well known. Manufacturers tried to protect their crews from COVID and shore up production as markets predicted an economic downturn. That created an immediate shortage.

But what’s less known is just how wrong that forecast turned out to be: as interest rates dropped to historic lows, new construction boomed. Business Insider summed it up: “The hottest pandemic purchase is a house, as more and more Americans take advantage of low mortgage rates to attain spacious backyards and more comfortable work-from-home locales.”

Another major contributing factor to the spike in steel prices was tariffs. McGahan continues, “The tariffs enabled steel manufacturers to raise their prices without fear of foreign competition, at least to a point.” The steel tariffs have helped U.S. steel mills compete domestically against foreign companies since 2018. However, they have simultaneously hurt manufacturers downstream of those tariffs. According to a recent study by Columbia University, about half the cost of the 25% tariff on foreign steel is passed along to domestic steel distributors, which gets passed along again to us, the steel tank manufacturers.

The combination has driven the price of steel “off the charts,” as McGahan describes it.

So when does it end?

There is reason to hope that prices may peak or decline in the second half of 2021 due to new steel mills going online. However, putting a date on a calendar is — at best — imprecise: new infrastructure initiatives, combined with a still-booming real estate market means we may have to endure this situation a bit longer.

Equally, distributors worry about buying too much steel while the price is at an all-time high and getting stuck with the inventory, so the tug of war between supply and demand continues for all of us. As McGahan explains, “These rapid increases in steel pricing make it difficult for estimators to stay ahead of the curve, and they are frustrating to everyone except maybe the steel mills.  In times like these I try to keep my customers informed as best I can, but it’s very hard when the increases come one after another.”

We’re trying to keep you informed, too. Let’s hope the situation rectifies sooner rather than later.

MATT KOHNKE NAMED PRESIDENT AND CHIEF OPERATING OFFICER AT NEWBERRY TANKS

MATT KOHNKE NAMED PRESIDENT AND CHIEF OPERATING OFFICER AT NEWBERRY TANKS

West Memphis, AR August 10, 2020 – Intentional innovation continues at Newberry Tanks and Equipment LLC with CEO Chris Long’s announcement today that Matt Kohnke, formerly CFO of Freight Car America, has been hired as President and Chief Operating Officer.

After a transitional period, CEO Long will focus on Newberry’s “New Thinking” innovation, strategy, and culture. Long commented, “I am elated to have such an exceptionally talented and qualified manager join our team. Matt brings leadership talent to our team to continue our record of quality, success, and growth.”

Kohnke possesses 17 years’ experience as a senior executive at manufacturing and distribution companies, where he developed a reputation for enabling partnerships within and outside the company for maximum profit. His duties at Newberry will include oversight of the company’s lean manufacturing process to ensure quality and employee safety, as well as meeting customer needs. Kohnke’s duties will include further streamlining Newberry’s new expedited delivery options, even as the company’s footprint continues to expand at a pace 52% higher than industry average.

Kohnke added, “I am very excited to join the Newberry Tanks team. We have a significant opportunity to expand our market penetration and grow the business nationally. With a high level of focus on safety and quality, we will work with our customers to be the preferred supplier of tanks and accessories to them. Our goal is to provide exceptional products to our customers on a prompt delivery schedule, which is critical to meeting their needs.”

Media inquiries regarding this release should be directed to publicist Kathleen Hannon (704) 912-0209 or via email at khannongb@aol.com.

About Newberry Tanks

For more than 90 years, award-winning Newberry Tank and Equipment has been manufacturing quality aboveground and underground steel tanks for the American Supply Chain and every branch of the U.S. military. The “Think Tank” of Oil and Petroleum storage, Newberry Tanks is intent on innovation: offering tanks on demand, dedicated customer service, turnkey solutions, and the fastest delivery in the country. *Ask about our Preferred Customer Program 

Music Must Continue

We Got Rhythm!

Newberry Tanks is a proud Gold Level Sponsor for Stax Music Academy, a program of the Soulsville Foundation, which also operates the Stax Museum of American Soul Music. Founded in 2000, the Academy is celebrating 20 years of equipping young musicians with the skills they need to excel in music, as well as leadership training. In addition to our sponsorship, Newberry Tanks is proud to support Stax Music Academy’s #MusicMustContinue campaign by matching every donation made during the week of August 3 up to $5,000!

COVID-19 has forced many organizations — including Stax Music Academy — to go virtual. Simultaneously, many schools are slashing their budgets for the arts, so Stax Music Academy is now providing free virtual workshops and classes for all students in Shelby County to those without. The music must continue for these young students. Together, we can be a lifeline for kids across Memphis and Shelby County, making music education accessible regardless of their ability to pay.

Why is Newberry investing in a Memphis music academy? Read on.

Newberry Employee of the Year 1946: B.B. King

In 1946, Newberry Tanks was a thriving supplier of oil tanks and equipment thanks to hard work, quality products, reliable delivery times, and intentional innovation. But that year, Newberry was also the employer of legendary blues guitarist Booker (Bukka) White, and his young second cousin…none other than the ‘King of the Blues’ himself, B.B. King.

The story goes like this: Bukka worked for founder Jimmy Newberry at Newberry Tanks long before he became a celebrity, his skills as welder as deft as his skills on a guitar. After a stint in prison, Bukka needed a job and went back to see Jimmy. Bukka was expecting a no, but Jimmy hired him back, believing everyone deserves a second chance.

One day Bukka arrived home to find his young cousin, Riley King, asleep on his stoop. Going by “Blues Boy” (soon to become B.B.), the King of the Blues was barely more than a teenager. He’d hitched all the way from Mississippi, in the hope his famous cousin would introduce him to the Memphis music scene. Bukka not only did that, but introduced him to Jimmy so he could support himself. Together, Bukka and B.B. welded by day at Newberry, and set fire to Memphis blues scene at night.

Bukka never forgot the kindness Jimmy Newberry had shown him and his young cousin: he stayed with the company the rest of his career. B.B. left Newberry to become a musical legend.

The Music Must Continue

Today Newberry Tanks is committed to continuing Jimmy’s legacy of supporting musicians in recognition of and respect for the talents and craftmanship of our current and former employees.

Making music just got a little harder, while playing a key role in keeping us all going through these hard times. The music must indeed continue. Here at Newberry, we are #StrongAsSteel” and we intend to help make sure these kids, the community, and the world at large can foster and enjoy the music. Join us in supporting and celebrating the work this wonderful academy is doing. And be sure to tune in for their music online! They can be found on Twitter, Facebook, Instagram and YouTube.

Help us in supporting this worthy cause! You can donate here.