Picture this: A global supply chain disruption hits, raw materials become scarce, and steel or aluminum mills struggle to keep up with demand. Suddenly, orders that were once processed seamlessly are delayed or even canceled.

But while some businesses scramble to secure materials, others seem to get priority access—their orders are fulfilled first, their supply remains steady, and they avoid costly production delays.

So, why do mills prioritize certain customers during shortages? And what can businesses do to secure their place in the supply chain? Let’s dive in.

Why Do Shortages Happen?
Before understanding why some customers get priority, let’s look at why shortages occur in the first place.

1. Supply Chain Disruptions
Global events—such as pandemics, wars, natural disasters, or labor strikes—can severely impact material availability. When raw materials like iron ore, nickel, or aluminum become scarce, mills can’t produce as much.

🔹 Example: The 2020 COVID-19 pandemic disrupted steel production worldwide, leading to massive supply shortages.

2. Increased Demand
Sudden spikes in demand—such as during infrastructure booms, government projects, or economic recoveries—can strain supply chains.

🔹 Example: A surge in renewable energy projects increases demand for stainless steel and aluminum, stretching mills’ production capacity.

3. Transportation and Logistics Bottlenecks
Even if a mill has the capacity to produce, shipping delays, port congestion, and trucking shortages can make it difficult to deliver materials on time.

🔹 Example: A shortage of shipping containers in 2021 led to delays in raw material imports, slowing down mill production.

Who Gets Priority During a Shortage?
When supply is tight, mills can’t fulfill every order equally. They prioritize based on strategic and financial factors. Here’s a look at who typically gets served first:

1. Long-Term Contract Customers
Mills prioritize customers with long-standing contracts over those placing one-time or sporadic orders. These agreements ensure predictable revenue and maintain strong business relationships.

✔ Who benefits? Large manufacturers, automotive companies, and construction firms that sign long-term agreements.

🔹 Example: A car manufacturer with a five-year steel supply contract is likely to get priority over a small business that orders once a year.

2. High-Volume Buyers
Big customers who purchase large quantities consistently are valuable to mills. They provide stability and higher profit margins, making them a top priority during shortages.

✔ Who benefits? Global corporations, shipbuilders, and large industrial manufacturers.

🔹 Example: A major appliance manufacturer ordering tons of sheet metal monthly will likely get prioritized over a local machine shop ordering sporadically.

3. Strategic Industry Customers
Certain industries—like defense, aerospace, energy, and healthcare—are deemed critical during times of crisis. Governments often step in to ensure these sectors receive materials first.

✔ Who benefits? Defense contractors, energy infrastructure companies, and medical equipment manufacturers.

🔹 Example: A mill may prioritize stainless steel tubing for a medical equipment manufacturer over standard commercial projects.

4. Loyal, Reliable Customers
Mills favor customers who pay on time, maintain strong relationships, and consistently place orders. A customer with a proven track record of reliability is less risky to serve during uncertain times.

✔ Who benefits? Businesses with long-standing relationships with mills and suppliers.

🔹 Example: A construction company that has bought steel from the same mill for 15 years will likely be prioritized over a new customer.

5. Customers Who Accept Premium Pricing
During shortages, mills sometimes increase prices due to supply constraints. Customers willing to pay higher rates or accept surcharges may receive priority.

✔ Who benefits? Companies that value speed over cost and can absorb higher pricing.

🔹 Example: An industrial manufacturer willing to pay a premium for expedited delivery may jump ahead in the queue.

What Can Businesses Do to Secure Priority?
If you want to avoid supply disruptions, here are some strategies to improve your chances of being prioritized by mills:

✔️ Establish Long-Term Agreements
Signing a supply contract ensures mills see you as a reliable, long-term partner rather than a one-time buyer.

✔️ Buy in Larger Quantities
Whenever possible, consolidate orders to increase your purchasing volume. This makes you a more attractive customer.

✔️ Build Strong Supplier Relationships
Regular communication, timely payments, and loyalty to a specific mill or distributor can improve your standing during shortages.

✔️ Plan Ahead and Maintain Inventory
Rather than relying on just-in-time inventory, consider keeping safety stock to withstand short-term disruptions.

✔️ Be Willing to Pay Premium Prices
If supply is critical to your operations, flexibility on pricing may help you secure materials faster.

Final Thoughts
When shortages hit, mills don’t operate on a first-come, first-served basis. They prioritize contracted, high-volume, strategic, and loyal customers—those who provide stability, long-term value, and minimal risk.

If you want to ensure your business stays at the top of the priority list, focus on building strong relationships, securing long-term contracts, and being a reliable buyer.

After all, in times of scarcity, who you are to your supplier matters just as much as what you need from them.

Have you ever faced material shortages? How did you navigate them? Share your experience in the comments! 🚀