The provision of professional snow and ice management services has always been a challenging proposition. The past few years have thrown a few curveballs at us and made this even more difficult. There are four main areas that have become exceptionally demanding. These are insurance and related liability issues, vehicles and equipment, the supply of salt, and finally the available labour pool.
In recent years, personal injury lawyers have found the snow industry to be a very lucrative, soft target. Their marketing is everywhere. The Homeowners and Occupiers Act requires that property owners and their hired contractors make reasonable efforts to keep properties safe. In actual fact, the standard is often perfection, and even when perfection is achieved (contracts followed perfectly, verifiable third-party documentation, GPS, trained staff and well-maintained equipment, etc), there will still be a payout settlement of some sort, even for frivolous claims. Insurance companies take a short-term stance on this and prefer to make a settlement rather than incur the costs of a trial and potentially larger loss. But in the long term, this behaviour is essentially being rewarded, and claims actually seem to be increasing at an accelerated pace. The end result is that our industry continues to be targeted, and insurance premiums and deductibles are rapidly increasing to cover the costs of claim payouts. Deductibles of $50,000 per claim are becoming standard. All contractors are experiencing a rapid rate and deductible hikes, and an increasing number can’t acquire coverage at all. This is a major crisis that will ultimately require legislation to control.
The past three years have seen major production shortfalls in domestic salt mines. This resulted in an emergency influx of foreign-produced salt (Egypt, Morocco, Chile, etc) to fill the void. While the quality was generally acceptable, the cost of shipping and storage led to wild price increases, doubling the cost in many cases. It appears the domestic mines are back on track this year which should lead to supply and price stability. It remains to be seen if there will be a decrease in pricing, or simply a plateauing.
Although highly mechanized, snow companies depend on reliable people to operate equipment and provide hand shoveling and de-icing services. Over the past few years, as our economy really grew, there was increasing competition for personnel in all industries. Snow is a tough industry-we require 24/7 availability, and the ability to work in challenging conditions sometimes on very short notice. With other options, people gravitated to more predictable, stable jobs. The snow industry has countered by dramatically increasing wages, and also providing standby pay. This is a new development and is driving up costs to provide service.
There have been many factory shutdowns and supply chain interruptions around the world over the past few months. With our global economy, faraway disruptions can have an impact close to home. Even production decisions made months ago, during the heat of the pandemic are still having an effect today. The end result is that wait times for trucks and equipment are much longer than normal. Contractors looking to add equipment, or replace aging gear need to act quickly to ensure preparedness for the first storm. At MPS, we placed orders and acquired new equipment as early as May. Early for a normal season, but based on information from colleagues who are now having trouble sourcing equipment, we’re sure glad we did!