Citing Hurricane Ida and Its Domino Effect, Deceunick Declares Force MajeureSeptember 15th, 2021 by Drew Vass
After suppliers of raw materials and additives invoked the pertinent force majeure clauses in their contracts with Deceuninck North America, company officials delivered the same message to its door and window customers last week, notifying them of additional product shortages and possible price increases. A “force majeure” clause (French for “superior force”) is a contract provision designed to relieve parties from performing their contractual obligations when certain circumstances beyond their control arise.
The move stems from a domino effect starting with Hurricane Ida, which company officials say left suppliers from the Gulf Coast region without power, forcing them to shut down “or greatly reduce or temporarily halt operation” of facilities. Damages to the electrical grid and infrastructure are largely to blame, though an official tells [DWM] that some suppliers also suffered structural damages.
“Due to the unfolding of this crisis, Deceuninck North America is therefore forced to declare force majeure effective immediately until our supply chain for these items stabilizes with more visibility,” said a customer service bulletin dated September 7. According to the bulletin, the company is declaring a force majeure condition “with respect to production and shipment of fenestration products in North America.” Officials say they’re unable to pin down specific expectations for impacts and duration of shortages.
Greg Koch, Deceuninck’s vice president of sales and marketing, confirmed that the notice was made out of an abundance of caution, “although we are under force majeure from a lot of our suppliers,” Koch pointed out. “As they began to accumulate, we felt it was a wise decision to stick a stake in the ground and let our customers know that we’re battling that. And we explained it to them in that way—that this isn’t something that we’re eminently in danger of running out of material, but we are up against a challenge in the market for getting material.”
The issue arrives at a time when nearly all door and window manufacturers face supply chain issues of one sort or another, leading to delayed shipments industry wide.
“We felt we did need to say something to the market—to let them know what we’re up against,” he told [DWM]. Koch said, among several short-term scenarios, the company will consider alternate materials, to “protect our business and our customers’ businesses, by being proactive.” As part of a global group, the company has advantages when it comes to leveraging alternate sources, he said. At the same time, “There’s a lot of work that goes into making [alternate sources] quickly available,” he added. “If we’re looking for something to replace something [with], we have to get it to our material science teams, to ensure that the new material is a match for the company’s needs.”
With decades-long customers in its portfolio, “The vast majority understand,” he said. “They don’t like it … but ideally we get through this and prices start to come down at some point, and we return to normal. If there is a normal at this point.”
Tara Taffera contributed to this report.