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Distributors Are Feeling The Summer Heat

Friday, August 3rd, 2012

2012 Heat WaveIt’s a cool 91 degrees here in Syracuse today—cool, at least, compared to recent temperatures this summer, and cool compared to much of the country, parts of which are well over 100 degrees today. For some, the heat is merely a discomfort; for others it poses a serious safety risk. But could it also be bad for gases and welding distributors’ business?

After a strong performance out of the gate in 2012, several distributors I spoke with say that business has slowed down over the last month and a half.

Brad Peden, president at Arcmaster Supply in Fort Worth, TX (where temperatures are expected to reach 106 today), says, “Business was very good up until the first part of June, and then it tapered off. I don’t know whether it’s the summer heat or vacations or what, but everybody I’ve talked to in this area says the same thing.”

Further north in Madison, WI, Badger Welding Supplies Owner and President Scott Griskavich says the heat has likely been a factor. “Agriculture and construction have really been affected by the heat. The construction crews, roofing crews, they’re knocking off at noon on those 100-degree days. Nobody’s out in the fields. We had a 20-day stretch of 90-plus-degree weather. For Wisconsin, that’s insane.” He adds that shorter work hours mean workers are not consuming as much gas and other consumables.

Delta Gases (Maryland Heights, MO) VP Todd Linnenbringer has also seen a lull in business. He has heard some business owners say it’s the heat. “It’s been so hot, maybe customers haven’t been able to work full force on certain projects,” he says, adding, “I really don’t know what to attribute it to.”

At least in Tulsa, OK, where temperatures have been as high as 114 degrees over the past few days, news reports confirm that the heat is slowing down oil rig workers. Apache Corp tells The Oklahoman its employees are allowed to shut down the rigs and cool off whenever they need, for as long as they need. Most companies require employees to take frequent breaks.

If the heat is indeed to blame, is there anything distributors can do to battle the heat? “Pray for rain,” jokes Griskavich. More seriously, he says he’s adjusted his cylinder fillers’ schedules with their safety in mind. “We make sure to fill all the cylinders in the morning while it’s cool. If you start filling them in the afternoon, it could be 95 in the fill plant, and those things are radiating 130, 140 degrees.”

For distributors looking to offset the lull with new business, lightweight workwear may be a window of opportunity. At oil rig sites, OSHA requires workers to wear long-sleeved and long-pant flame-retardant clothing, heavy steel-toed boots and hard hats. Apache Corp VP Rob Johnston told the Oklahoman, “We’ve spared no expense trying to find the absolute lightest clothing available.”

However, the heat is only one suspect in this case. Another possible cause for slowing sales is the impending Presidential election. Says Linnenbringer, “Some people are saying it’s tied into the election, with customers waiting on projects to see who gets into office. Personally, I don’t see why that should change anything.”

If either the heat or the election is to blame, the good news is that both are temporary situations, meaning an end is in sight. As Linnenbringer puts it, “Hopefully it’s just a blip on the radar, and we can get back to being busy again.”

Has your business slowed this summer? How are you handling it?

Helium Shortage Turns Into Force Majeure

Friday, April 13th, 2012

Still-Leben Mülheim 10 ies
Despite hopes that the supply of helium might straighten itself out in 2012, it appears gases and welding distributors won’t have it so easy after all. The most recent development is the announcement from the U.S. Bureau of Land Management about a two-week maintenance outage in June 2012, which coincides with a planned 8-week outage of ExxonMobil’s helium supply. There are several other outages, including the shutdown of Skikda in Algeria in anticipation of tying in the Skikda megatrain, which is expected to come online in the Third Quarter. Even in the short term, helium supplies in Qatar and Australia have outages planned for April and May.

Up until now, most distributors I’ve talked to have escaped the clenches of tight helium supply. But with additional outages, several suppliers have allocated their available helium supplies, leaving distributors with little choice. Now the only question is how they will respond.

Cee Kay Supply announced that it will not accept new customers and that existing ones may be subject to price increases and allocation. Gas applications in medial, laboratory and manufacturing are currently exempt from this allocation.

Included in the announcement from Cee Kay were letters from Linde and Air Products explaining the circumstances of their allocations. Air Products writes that it is “providing you formal notice of force majeure,” a term many distributors are familiar with from challenges with calcium carbide supplies in 2011.

As GAWDA Consultant and General Counsel Rick Schweitzer referred to in Welding & Gases Today:

Force majeure is a French term meaning “superior force.” When the seller’s performance is affected by some unforeseeable event, the seller’s performance is excused. The event may be an “Act of God” such as a fire, flood or tornado, or it may be labor unrest, war or insurrection. In order for the seller to take advantage of this provision, the event may not be caused the seller’s negligence or intentional act.

As the helium situation continues to linger, how are you responding?

One suggestion from LinkedIn is to switch customers to a trimix for GMAW and FCAW applications. Although most trimixes contain helium, it certainly requires less helium.

How is your company handling the helium shortage over the next few months?

The Poetry Of Welding

Friday, April 6th, 2012
Welding Rodeo Art

Welding and art are a great combination, shown here at the Welding Rodeo.

As I mentioned in my last post, April is celebrated at National Welding Month. April, as it happens, is also National Poetry Month.

On the surface, the two crafts are very different, but when you look a little deeper, there are quite a few similarities. Both welding and poetry are used to create. Sometimes these creations can be artistic. Welding has taken off in the art world, as evidenced by welding sculpture competitions like the Welding Rodeo. But poetry and welding also provide the tools on which nations are built. “The Star-Spangled Banner” is a perfect example of a poem of influence and historical significance.

The two crafts likewise take skill, training and lots of practice to master. In each, there are many forms. Welding has GMAW (MIG), GTAW (TIG), SMAW (stick) and others, along with newer forms such as ultrasonic welding and friction-stir welding. Poetry has haiku, sonnets, ballads and a variety of traditional and experimental forms.

Finally, welding and poetry rely heavily on advocates of the craft to ensure future longevity. It might be a welding supplier’s efforts that get a young student involved in welding—or it might be a poem that does the trick. I’ve compiled a few poems here that mention welding and illustrate its importance.

Poet Ed Lahey has been called the greatest poet Montana has produced. He was known for writing about miners and other workers, giving a voice to the state’s labor force. He gave voice to a welder in his poem “Gimp O’Leary’s Iron Works”:

“His arc welder would strike
white fire and a bead
of blue-black rod would slide
along between cherry streaks,
and acrid smoke would curl away
to leave clean married steel,
not too frail, or buttered up
but straight and strong,
hard as mill forged rail.”

You can read more from this poem here, beginning on page 101.

Some other welding-related poems to check out are “Arc Welding” by Australian Poet Philip Hodgins and “Vulcan” by George Oppen.

In the past, I’ve looked at movies that involve gases and welding. Indeed, art is a great way to promote the industry. Do you know any other examples of art that promote welding and gases? Share in the comments below or on Twitter @GasWeldEdge.

New Tanker Truck Definition Draws Criticism

Wednesday, February 29th, 2012

Tanker Truck Regulations QuestionedAs reported in a recent issue of the GAWDA Connection e-newsletter, the Federal Motor Carrier Safety Administration changed the definition of tank vehicle in a way that impacts many drivers. The change outlines volumes for trucks transporting liquid or gaseous materials within a tank or tanks. At or above these volumes, drivers need a special tank vehicle endorsement on their CDL.

The summary states: “This new definition will require a tanker endorsement on the CDL of any driver operating a CMV that would be transporting four or more intermediate bulk containers, since those typically contain anywhere from 250 gallons to 330 gallons of liquid per IBC.”

The article also explained that the American Trucking Associations was preparing a petition to amend the rule, which would be supported by GAWDA and other associations. This past week, ATA released that petition in the form of a letter to FMCSA, which called the definition “burdensome” and described it as broad and including vehicles that are “manifestly not tank vehicles.”

Along with these issues, a loose enforcement timeline creates confusion for drivers and companies operating in multiple states. The rule was enforceable as of July 2011, but states have until July 2014 to comply. ATA Safety and Security Policy Manager Boyd Stephenson told The Trucker, “States have the option of starting to enforce the rule on the effective date, others wait longer. So you might wind up with Montana beginning to enforce the rule immediately and Idaho choosing to wait three years.” Particularly for distributors doing business in multiple states, this could create some confusion and/or additional expense.

Another question is why it has taken so long for this definition change to draw attention. The notice was published in the Federal Register way back in May 2011 as part of a larger final rule revising the CDL testing and learner’s permit standards. With states able to enforce the rule as early as July 2011, should FMCSA made the change more transparent and/or deliberate?

How do you feel about the new definition change? Do you agree that it is too broad and burdensome?

Helium Alert: Help Customers Stay Safe

Thursday, February 23rd, 2012

Helium Safety AlertSafety is a number one priority for the Gases and Welding Distributors Association, as it is for GAWDA members everywhere. When working with welding and gases, there are many potential dangers. Unfortunately, when these products fall into the wrong hands, there is a potential for accidents. The best way to prevent these accidents is through education.

Reports have come out this week that a 14-year-old girl in Oregon died after inhaling helium at a party. A group of teens was using helium to make their voices sound funny, and the girl ended up with air pockets in her veins that led to her death. As MSNBC states, the event “exposes the rare but real dangers of inhaling helium, especially from a pressurized tank.”

Dr. Mark Morocco, associate professor of emergency medicine at the Ronald Reagan Medical Center in Los Angeles, explains the dangers of inhaling helium: “It is similar to when a scuba diver surfaces too quickly. A gas bubble gets into the bloodstream, perhaps through some kind of tear in a blood vessel. If it is a vein, the bubble will stay in the lungs. If it is an artery, it can block the flow of oxygen-laden blood to the brain, causing a stroke. If there is a hole in the heart, the bubble can go from a vein to an artery and then to the brain.”

In response to the event, GAWDA released the following safety alert:

Helium Inhalation Alert

Feb. 23, 2012

On the news today was an article on the tragic death of a teenage girl that died from breathing helium at a party. The Gases and Welding Distributors Association and the Compressed Gas Association have for many years been concerned with the breathing of helium in order to get the high pitched “Donald Duck” sound. These associations have released many alerts and communications over the years warning people not to breathe helium from cylinders or balloons filled with helium.

We want to remind our distributors to remind their customers of the hazards of inhaling helium at any time and under any circumstance.

If you have any inquiries on where to find out more information breathing inhalants such as helium, you can find more at the National Inhalant Prevention Coalition website: http://www.inhalants.org/index.shtml

You can also refer your customers to the MSDS for helium and to CGA P-9, The Inert Gases: Argon, Nitrogen, and Helium.

Feel free to contact me if you have questions, concerns, or comments.
Michael Dodd
GAWDA DOT, Security, EPA, & OSHA Consultant

When you work with gases every day, safety becomes second nature. Keeping customers educated about the dangers they face is paramount. Stay safe, and help your customers do the same.

Helium Shortage Takes Over Valentine’s Day

Tuesday, February 14th, 2012

Valentine’s Day is one of the busiest days of the year for balloon retailers, and the ongoing helium shortage has been a cloud over many such businesses. I’ve been reading local news reports from around the country, all discussing the fact that helium-filled balloons are harder to come by and a little pricier this Valentine’s Day.

Welding & Gases Today has been following the helium shortage for the last few months, and with balloon retailers in the news, it seemed like a good time to check in with distributors. How is the shortage affecting distributors and their customers? The response is mixed.

Scott Myran, operations manager at Mississippi Welders Supply (Winona, MN), noted the helium supply strain in a conversation with me this past November, and told me this week that the situation has not changed in the last several months. “Helium is going to be an ongoing issue on into the future,” he says. “There’s a finite quantity. Eventually, we will get to the point where the U.S. is no longer the largest exporter in the world, and we’ll have to start importing. Helium’s probably going to become harder to procure, and it’s no doubt going to get more expensive.”

Despite the tight supply, MWS has been able to keep up with customer demand. Myran says the company created a backup plan on how it would prioritize if forced to put customers on allocation. “Medical needs would have been priority number one,” he says. Thankfully, the company has not had to call on this plan.

However, it appears some distributors have had to follow this route. End-user Donna Ryan, owner of Donna’s Helium and Balloon told Amarillo’s Pronews 7, “The way they are allocating the helium now, hospitals are on the top of the list, which is exactly where they belong. Balloon helium is at the bottom.”

While MWS has not had any difficulty meeting customers’ supply needs, Myran says costs have gone up. “Whether it’s helium or gas for your car, customers make that individual decision as they need to. Sometimes when we’re aware that something is in tight supply, price is not such an issue.”

In Wichita, KS, Lampton Welding Supply has not felt the pressure of tightening supply. “We haven’t had any strain. We’ve been able to fill 100 percent of our needs,” says vice president Doug Lampton. Lampton Welding Supply prepared for the helium shortage by purchasing additional helium cylinders, and it seems to be paying off. Lampton says the company has added quite a bit of business over the last few months due to other distributors’ inability to secure a steady supply of helium.

Similar to MWS, Glenn Bliss, president of General Distributing Company in Great Falls, MT, told KFBB “With our existing customers, we don’t foresee any issues whatsoever, but it’s a situation where we are not able to go out and proactively look for new helium business right now.” General Distributing invested in a tanker last year, allowing the company to pick up helium in bulk and bring it back to Montana. Bliss says the tanker allows the company to absorb some of the rising costs of helium.

How is your business handling the helium supply strain?

Of course, with the cost of helium going up, you can’t go wrong with a bouquet of welded flowers, like the ones created by a group of high school students in Washington for Valentine’s Day.

Will 2012 Be The Year For Recovery?

Friday, February 10th, 2012

The recent recession seems to be more drawn out than others in recent memory. Past recessions have been followed by strong economic growth, but not this time—not yet, at least. Things have taken time, but there are positive signs—at last. Many of the distributors I’ve talked to over the last few weeks say business in January and February has been stronger than expected.

One contributor to a slow recovery was the fact that businesses held off on spending capital. As economist Joseph V. Kennedy points out in his article, “How Much More Can We Handle,” corporations have been sitting on roughly two trillion dollars in accumulated capital. As for consumers, it seems they may have finally broken through and are beginning to spend again. (Black Friday sales in 2011 were a record-high $11.4 billion.) With any luck, the business world is on the heels of consumers.

If GAWDA members are any indication, businesses may be ready to spend in 2012. In the Welding & Gases Today 2012 Business Forecast, 59% of distributors said they plan to build new or expand existing facilities; 46% will hire new employees. Mike Taylor, owner of All Gas & Welding Supply (Monticello, NY), told W&GT, “If you have access to capital, it’s a good time to invest in your business.” Their customers, too, are beginning to spend once again. Lefeld Welding & Steel Supplies President Gary Lefeld says, “The customer base is more optimistic and ready to release money on needed repairs and projects. There’s movement in the pent-up demand.”

Although certain industries, construction in particular, are not back on their feet, there are new, emerging markets, and it’s up to distributors to go after these prospects. Energy in particular is showing positive signs with the growth of industries like shale and LNG. As Bob Garland writes in “The Shale Effect,” “The recovery, production and delivery of shale gas have a positive economic impact not only on the core oil and gas industry, but also on the indirect suppliers (supply chain) and the induced suppliers (consumers)…For gases and welding distributors, this means a new and expanding market.”

That said, some distributors are still feeling the strain of the recession. “We have many faithful customers who are buying only what they need. No one is stockpiling inventory,” says Ann Clay, president at Tri-State Oxygen (Ashland, KY). But overall, distributors are positive, with 98% predicting 2012 sales to be the same or better as 2011.

What do you think? Will recovery come in 2012?

Find out what industry suppliers and distributors in your region are planning for 2012 in Welding & Gases Today’s Business Forecast.

A Rebirth For Industry?

Tuesday, July 5th, 2011

Marcellus Shale Gas Drilling Tower 1 cropBack in May, I shared the words of Dr. Barry Asmus, who projected that North America has the capability to become the energy exporting capital of the world. He based this on the growth of shale gas fields throughout the country. As I mentioned in that post, this could be good news for gases and welding distributors. Natural gas companies need gases and welding equipment—and their growth is likely to stimulate local industry, meaning other manufacturers will be in need of gases and welding equipment too.

Based on recent developments, it seems Dr. Asmus may be on the right track. An article this week in the Philadelphia Inquirer says that the production of natural gas at Pennsylvania’s Marcellus Shale is already close to exceeding the state’s demand for natural gas—and the output continues to grow. According to the article, energy exporting may not be far off.

Along with exporting, the article states, “Economic-development officials envision some gas staying in the region and fueling a revival of energy-intensive manufacturing, the type of industry that thrived here when coal was king.” If such a vision comes to fruition, it would no doubt be a boon to the gases and welding industry.

What end-user markets do you see growing in the next few years? Leave a comment or tweet @GasWeldEdge.

Airgas and Air Products: Getting Up To Speed

Tuesday, December 14th, 2010

Airgas and Air Products: Getting Up To SpeedThere have been some major developments in the Airgas/Air Products situation, and yet the uncertainty of the situation is as strong as ever. In case you missed it, here’s what’s happened in the last two weeks.

At the end of November, the Delaware Supreme Court made a pivotal decision to repeal the Air Products’ proposed amendment that would have moved Airgas’ next annual meeting up to January 18, 2011, effectively shortening the Airgas directors’ terms by eight months. Given that at September’s meeting, three Air Products-nominated board members were voted onto the Airgas board, the Supreme Court decision was a big win for Airgas.

Soon after, on December 9, Air Products upped its bid of $65.50 up to $70.00, calling the offer its “best and final offer.” According to the Air Products statement, “The reality is that there are no other bidders for Airgas.” Airgas is currently reviewing the offer, and has yet to make a determination. However, Airgas previously stated that its board “unanimously” held $78 to be a starting point for negotiations.

As it turns out, this valuation may not have been unanimous as previously thought. The three directors nominated by Air Products wrote a letter to the chairman expressing this sentiment. The chairman quickly acquiesced to the directors’ request to obtain a third consulting firm for their benefit. But as NY Times’ Dealbook shrewdly points out, the consulting firm was likely chosen by the other six board members. It seems there may be dissention among the board—so we will watch and see where this leads.

So where do we stand?

Both parties are waiting on the Delaware Chancery Court to decide on whether to redeem the so-called poison pill (so-called by Delware  Chancellor William B. Chandler III in a letter), a measure to protect against hostile takeovers. According to Investopedia’s definition, a poison pill would make Airgas’ stock less attractive to Air Products, generally by diluting the shares and making the takeover more expensive. The judge stated today that he will not make a decision until the new year.

With the annual meeting pushed back from January, there is currently no finalized date for the meeting. Airgas writes in a response to the Delaware Chancery Court on December 10, “[Airgas] does not intend to hold its next annual meeting before June when its fiscal year 2011 results will be available and its annual report issued.” On August 30, 2010, Airgas offered to move its annual meeting up to June 21, 2011, in an attempt to leverage votes against the Air Products by-law proposal. Given that Airgas now controls the meeting date, it is more likely that the meeting will take place in September or October 2011. However, according to NY Times’ Dealbook, an Airgas by-law requires a supporting vote of only 33 percent of shareholders to call a special meeting. As such, Air Products may attempt to rally Airgas shareholders to move the meeting up to June.

As we wait for a resolution that may still be a long way off, I can only wonder what impact the situation will have on the industry. If Air Products takes over, how will it impact you? Will there be any residual effect if Airgas wins out? Let me know what you think.

Is Customer Service Dead?

Monday, August 16th, 2010

By now, most of you have heard about Steven Slater, the flight attendant who lost his temper and cursed at passengers before making a dramatic exit through the plane’s emergency exit. Since his tirade, Slater is being heralded by many as a hero for standing up to uncooperative passengers and speaking his mind. What does the popularity of Slater say about customer service? Is it dead?

I think the positive attention Slater receives is because people relate to Slater as the service provider—they empathize with disrespectful customers. The age-old adage of business says the customer is always right. We would like to think customers would always be respectful, but every now and then, there is a customer or prospective customer who is less than polite.

While it may be tempting to return the favor, I think it’s important to stop and consider the consequences. Even if they may never do business with you, word travels fast. They are sure to tell people how rude they were treated. Not only will you lose their business, but possibly the business of many others as well. In Slater’s case, he may be a hero to some, but he was also arrested and charged with reckless endangerment and criminal mischief.

So many GAWDA distributors pride themselves on their service. So I’m curious to hear what you have to say about Slater. Was he justified in speaking his mind? Where do you draw the line? And how do you deal with disrespectful customers? Is there any recourse at all, or is it best to bite your tongue?

Got a horror story of your own? I’d love to hear it.