By KERRY SMITH BUCK

Industry-specific supply chain challenges for contractors have plagued companies and trades for six years now, according to Associated General Contractors 2026 conference presenter Timothy Jed, supply chain leader for DPR Construction.

Disruptions, shortages, price escalation and events such as wars and natural disasters have all played tangible roles as barriers to a smooth supply chain for contractors and subs.

“All of these factors, added to an existing issue with supply chain, create an exponential impact,” said Jed.

Transformers, switchgear – specifically circuit breakers, switches and fuses – continue topping the list, the contractor audience agreed, as project material components that remain the hardest to come by and carry the longest lead times.

“We often think of construction in the U.S. as being a trade or craft that’s a local or regional endeavor,” Jed added. “Even products we don’t recognize as international tend to be so.”

Jed cited converters and transformers as two examples, noting that the Tier 1 manufacturer reseller buys its transformers from a company overseas, the Tier 2 original equipment manufacturer (OEM) that is based in the Philippines. The Tier 2 OEM acquires its components from 64 unique suppliers who represent Tier 3. The Tier 3 suppliers procure parts from 171 unique suppliers representing Tier 4, who in turn buy parts from 1,135 unique suppliers representing Tier 5 manufacturers.

“We have a heavy reliance on the world market,” Jed said. “Direct impacts of our reliance on China can be seen in our need for electrical equipment, nuclear reactors and boilers, plastics and iron and steel. Our reliance on Mexico shows itself in U.S. demand for electrical machinery, nuclear reactors and machinery and plastics. And we rely upon Canada regularly for raw aluminum and sawn wood.”

Secondary impacts of the U.S. dependence upon other countries shows itself in Mexican materials such as mineral, fuels and oils, according to Jed, with Canada as a supplier of crude petroleum, petroleum gas, refined petroleum and electricity.

Key products with exceptionally high import reliance include games and sporting equipment, furniture/lighting, vehicles, optical/tech/medical accessories, furniture/beds/mattresses, motor vehicle parts, baked goods and unwrought gold.

“These top consumer products occupy 70 percent to 80 percent of what we import,” he said.

But materials are only half of the supply chain equation. Global logistics serves as the second huge variable, according to Jed.

“Logistics is an enormously impacted by trade tensions,” he noted. “Since 2013, China has been working on the Belt & Road Initiative, which is an investment in more than 150 countries and international organizations. Part of this initiative is the Polar Silk Road, China’s strategy to develop Arctic shipping lanes.”

Both China and Russia are jointly patrolling this route with their coast guards, offering it as a shortcut for shipping.

The Straits of Taiwan, through which one-half of the world’s 5,400 container ships passed in 2022, is another key global shipping route subject to war and overall trade tension. In late 2025, China conducted large-scale “Justice Mission 2025” war games surrounding Taiwan that featured extensive live-fire exercises, naval blockades of key ports and air-sea drills.

“All of this affects the U.S., particularly since China is the number-one producer of rare earth elements and Russie is the number-one producer of natural resources,” said Jed. The question for the U.S. – particularly for contractors – is how do we see these impacts coming so we can make better decisions and know when to buy our supplies and equipment?”