Shell is expanding its U.S. fuel distribution and retail network with a deal to take full ownership of Tri Star Energy LLC, a convenience-store operator and fuel distributor with operations across the Southeast.

Equilon Enterprises LLC, doing business as Shell Oil Products US, agreed to acquire the remaining 67% of Tri Star that it does not already own. The Nashville-area company operates 320 fuel and convenience-store locations and has supply agreements with another 552 dealer-owned sites in Tennessee and surrounding states.

Shell will acquire the remaining interest from The Parman Corp., Kimbro Oil Co., and their subsidiaries. Financial terms were not disclosed. The transaction is expected to close by the end of 2026, subject to regulatory approval and other closing conditions.

The acquisition gives Shell greater control over both sides of its U.S. fuel distribution strategy: directly operated retail locations and the wholesale supply of fuel to independently owned dealers.

Once the transaction closes, Tri Star will be operated by Texas Petroleum Group LLC, a wholly owned subsidiary of Shell Mobility & Convenience US LLC. The combined Shell business will have 550 company-owned convenience stores and supply agreements with about 650 dealer-owned locations across the southern U.S.

That represents a significant expansion of Shell’s directly controlled U.S. distribution and retail operations. Shell already has about 12,000 branded fuel and convenience locations across 49 states, but most are owned and operated by wholesalers and dealers. The network serves more than 7 million customers daily.

The Tri Star deal gives Shell a larger company-owned footprint while preserving the dealer distribution model that provides much of its national reach. It also adds density in the Southeast, particularly around Nashville, where Tri Star has built its core business.

“Tri Star has built a strong business with high-quality assets, a dedicated team and a loyal customer base,” Machteld de Haan, Shell’s president of Downstream, Renewables and Energy Solutions, said in announcing the deal. She said the transaction fits Shell’s strategy of concentrating investment in businesses where it believes it has competitive advantages.

Shell said the acquisition is part of a broader effort to shift capital toward higher-return businesses and priority markets. The company plans to spend 80% of growth capital expenditures in its Mobility & Convenience business in 10 key markets, including the U.S., which Shell said generates most the business’s cash flow.

The company said the Tri Star acquisition is expected to generate a return above the hurdle rate established for Shell’s marketing business.

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Noble Supply & Logistics and 10 affiliates have filed for Chapter 11 bankruptcy protection as the government-focused distributor grapples with a cash crunch, excess inventory and mounting problems involving major Defense Logistics Agency contracts.

The Boston-based company filed voluntary Chapter 11 petitions Aug. 30 in U.S. Bankruptcy Court for the District of Delaware. Noble announced the restructuring on Aug. 31 and said it is considering a sale of some or all its assets, a reorganization, or another transaction.

Noble Supply & Logistics reported estimated assets of $100 million to $500 million and estimated liabilities of $500 million to $1 billion in its bankruptcy petition.

The filing follows a sharp deterioration in Noble’s relationship with one of its largest government customers.

On Aug. 27, three days before the bankruptcy filing, the Defense Logistics Agency notified Noble that it was terminating approximately $400 million of orders under a separate Special Operational Equipment contract, according to a declaration filed with the bankruptcy court by Chief Transformation Officer Robert Albergotti. Noble said it intends to appeal that decision.

That came as Noble was already struggling with the fallout from another Defense Logistics Agency program that had left the distributor carrying substantial inventory and purchase commitments.

The company won the Defense Logistics Agency’s Federal Supply Group 53 contract in 2021 to provide supply chain management for fasteners, hardware and related products used across multiple weapons systems. The contract had an estimated potential value of more than $1 billion and included a three-year base period, a one-year transition period and two three-year options.

Noble invested heavily in inventory to meet the contract’s delivery requirements, according to court documents. Many of the products had long lead times, while Noble said it sometimes waited as long as 18 months between purchasing inventory and receiving payment after a Defense Logistics Agency order.

The agency informed Noble in December 2024 that it did not intend to exercise the contract’s next option when the existing term expired in June 2026, according to the court declaration. The Defense Logistics Agency instead requested a two-year extension while it sought another supplier.

Noble said the decision effectively reduced what it had expected to become a 10-year program to four years.

The company also contends that the Defense Logistics Agency did not complete contractual closeout procedures or an end-of-contract inventory buyback. Noble said that it left it with more than $70 million in inventory and purchase obligations associated with the program.

In announcing the bankruptcy, Noble characterized its overall exposure more broadly, saying the contract change left it holding approximately $100 million in inventory and related obligations acquired, warehoused, and maintained to meet Defense Logistics Agency requirements.

The inventory problem placed additional pressure on Noble’s cash position.

After learning the contract would not be renewed, Noble sought additional financing from its lenders. Subordinated noteholders provided another $25 million in June 2025, while the company’s term loan agent allowed Noble to factor receivables to generate additional liquidity, according to Albergotti’s declaration.

Noble also cut approximately $30 million in operating expenses and worked to reduce inventory.

The measures were not enough to resolve its liquidity problems.

Noble’s inability to secure sufficient additional capital eventually forced it to delay payments to vendors, straining relationships with suppliers and putting additional pressure on the business, according to the court filing.

The company also pursued outside investment. Noble held discussions involving Bain Special Situations, but a potential transaction did not close amid concerns that included expectations for future federal defense spending, according to the declaration.

Noble continued seeking buyers or financing before filing for bankruptcy. Eight parties signed nondisclosure agreements and received access to a virtual data room or participated in meetings with Noble and its restructuring adviser about a possible transaction.

Noble ultimately concluded Chapter 11 offered its best opportunity to stabilize operations and preserve the value of the business.

“For over 20 years, Noble’s team has delivered mission-critical support to the government agencies and commercial customers who depend on us most,” founder and CEO Tom Noble said in announcing the filing. “After a thorough evaluation of our options, we determined that this process is the right path to preserve the value of our business, while allowing us to continue meeting our obligations to the customers and partners we serve.”

Noble serves more than 4,000 U.S. government customers across approximately 150 contracts, along with commercial and international customers. Its operations are supported by a network of more than 13,000 suppliers.

The company provides logistics, supply chain and product services across defense and federal markets. Its government contracts cover products ranging from fasteners and hardware to maintenance, repair and operations supplies and commercial off-the-shelf products.

Noble expects to continue operating during Chapter 11 using cash collateral with the support of its existing secured lenders.

The company has asked the bankruptcy court for authority to continue paying employee wages and benefits and maintain other normal operations. It also is seeking permission to pay certain prebankruptcy claims owed to critical vendors and lien claimants.

Noble enters bankruptcy without a predetermined outcome. The company said it does not have a restructuring support agreement or committed exit financing and has not identified a stalking-horse bidder or plan sponsor.

The restructuring could result in a sale of some or all of Noble’s assets, a reorganization, or another transaction.

For distributors, Noble’s collapse illustrates the potential downside of building inventory and working-capital requirements around a large customer contract. Noble committed substantial capital to products needed to meet demanding government delivery requirements, including inventory with long procurement lead times.

When the expected duration of that business changed, Noble was left with tens of millions of dollars tied up in inventory and purchase commitments at the same time it was struggling to raise additional capital and pay suppliers.

The subsequent termination of approximately $400 million in orders under another Defense Logistics Agency contract added another problem just days before Noble entered Chapter 11.

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Parts Town Unlimited is expanding its distribution network with a 538,450-square-foot fulfillment center northeast of Atlanta that will become the company’s largest facility of its kind.

The parts distributor has signed a lease for the entire building at Jackson 85 North Business Park in Pendergrass, Georgia, and expects to occupy the facility by the end of 2026.

The new operation will extend Parts Town’s fulfillment network into the Southeast and join existing global fulfillment centers in Chicago, Phoenix, and Munich. The company said more than 140 employees will work at the Georgia facility.

Once operational, the center will stock original equipment manufacturer parts for commercial foodservice equipment, residential appliances and heating, ventilation, and air conditioning equipment.

Parts Town said the additional capacity will enable it to deliver mission-critical original equipment manufacturer parts to 93% of the U.S. within two days. The company also plans to provide local pickup and same-day delivery, giving customers near the facility access to some parts in as little as two hours.

“Our new Global Fulfillment Center represents an important next step in the evolution of our North American distribution network and positions us to serve our customers and manufacturer partners with even greater speed, flexibility and scale,” CEO Bill Geary said.

The Georgia expansion is also a significant automation investment for Parts Town.

The facility will use a modular design and robotic conveyance systems intended to give the distributor flexibility as inventory volumes and customer requirements change. Parts Town also plans to deploy artificial intelligence-powered robotics and automation in packing, shipping sortation and receiving.

The company said those investments are expected to increase productivity, improve the use of warehouse space, and allow employees to spend more time on higher-value work.

“By placing greater depth and breadth of mission-critical OEM parts closer to customers across the Southeast, we can reduce transit times and costs while creating room for our partners’ expanding inventories,” Geary said.

Jackson 85 North is a 215-acre industrial development near Interstate 85. The first phase includes two warehouses totaling about 1.56 million square feet. Parts Town is leasing 538,450-square-foot Building One.

The building includes 40-foot clear heights, 185-foot truck courts and 124 dock doors, giving Parts Town a large-scale distribution platform along the Interstate 85 corridor connecting the Atlanta region with markets farther north in the Southeast.

The facility will also become Parts Town’s first global fulfillment center certified under the Leadership in Energy and Environmental Design program, commonly known as LEED.

Parts Town Unlimited is the parent company of more than 50 brands worldwide. Its businesses distribute original equipment manufacturer parts for commercial foodservice equipment, residential appliances, heating, ventilation and air conditioning equipment and consumer electronics, along with related products.

The Georgia investment expands a distribution model increasingly built around positioning inventory closer to customers while using automation and robotics to increase fulfillment speed and capacity.

For Parts Town, the immediate objective is straightforward: add Southeast inventory capacity, shorten transit times, and extend the reach of a distribution network that the company says will soon put 93% of the U.S. within two-day delivery range.

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U.S. industrial leasing jumped 50% in the second quarter as companies expanded distribution networks, increased their use of third-party logistics providers, and sought larger warehouses capable of supporting automation.

Industrial leasing activity increased 49.4% from a year earlier to 175.7 million square feet during the second quarter, according to JLL’s U.S. Industrial Market Dynamics report. Leasing totaled 320.9 million square feet in the first half of 2026.

The increase came as companies continued to rethink where they hold inventory and how they move products to customers.

Third-party logistics providers, or 3PLs, accounted for 22.4% of leasing activity, leading the market for the sixth consecutive quarter. JLL said 3PL space absorption increased 35.9% from a year earlier as companies used outsourced distribution networks to gain flexibility, technology capabilities, and additional capacity.

At the same time, companies are expanding warehouse networks beyond traditional coastal distribution hubs. JLL said occupiers are adding facilities in inland markets that offer more transportation options and less exposure to port congestion and international shipping volatility.

Companies also are building more multi-node distribution networks, including additional capacity and safety stock intended to protect operations from supply chain disruptions.

The trend has direct implications for distributors deciding where to place inventory and how much redundancy to build into their networks.

Demand Shifts to Bigger, Newer Warehouses

Demand is increasingly concentrated in larger and more modern distribution facilities.

Leasing for warehouses larger than 500,000 square feet increased 58.3% from a year earlier. Big-box leasing in the Inland Empire, Chicago, Dallas-Fort Worth, and eastern and central Pennsylvania accounted for 27.1% of all second-quarter leasing activity.

The largest buildings posted some of the strongest growth.

Leasing for facilities larger than 1 million square feet increased 71.1% from a year earlier, while leasing for buildings between 750,000 and 999,999 square feet increased 66.5%, according to the report’s second-quarter breakdown. By comparison, leasing for buildings smaller than 100,000 square feet declined 16.5%.

Big-box facilities accounted for 25.6% of leasing activity during the first half, exceeding the 22% to 23% share recorded during the peak pandemic years.

JLL attributed the shift to companies seeking facilities that can support automation, higher product throughput and larger regional or national distribution networks.

The divide also is widening between newer and older warehouses.

Class A leasing increased 7.1% from a year earlier, while Class B leasing declined 3.8%. JLL said tenants are favoring newer facilities with specifications suited to modern distribution operations, while older properties face longer leasing periods and greater pricing pressure.

Automation Becomes a Real Estate Requirement

Warehouse automation is helping drive that divide.

Persistent labor constraints and higher wages are accelerating investment in warehouse technology, according to JLL. Companies increasingly want buildings with the clear heights, power capacity and structural specifications required for robotics and other automated systems.

That makes warehouse selection increasingly an operational decision rather than simply a real estate decision for distributors.

JLL said demand is growing for facilities capable of supporting robotics, automated storage and retrieval systems and the electrical infrastructure needed to operate them. The firm also cited expanding warehouse requirements around data center construction and renewed ecommerce investment, including interest in facilities capable of supporting AI-powered inventory management.

Occupied Warehouse Space Surges

The increase in leasing is translating into higher warehouse occupancy.

Net absorption — newly occupied space minus space vacated — reached 99.1 million square feet in the second quarter, seven times the 14.4 million square feet recorded a year earlier.

Dallas-Fort Worth, Houston, Phoenix, Chicago, and the Inland Empire accounted for 34.2% of second-quarter absorption.

First-half absorption reached 167.4 million square feet, already exceeding the amount recorded during all of 2025. The national industrial vacancy rate declined 60 basis points from the first quarter to 6.8%.

New construction has not increased at the same pace.

Developers completed 62 million square feet during the quarter, up 3.3% from a year earlier but well below the quarterly totals exceeding 100 million square feet in 2023 and early 2024. About 276 million square feet was under construction.

Average asking rents increased 1.7% from a year earlier and 1% from the first quarter to $10.45 per square foot.

Supply Chains Move Inland

Trade uncertainty also is influencing where companies build distribution capacity.

JLL said shipping-rate volatility, tariffs and geopolitical uncertainty are encouraging companies to diversify supply chains and place more inventory domestically. Companies are increasingly considering nearshoring and onshoring while building regional distribution networks intended to reduce exposure to international transportation disruptions.

The result is a warehouse market increasingly shaped by the same issues distributors face in their broader supply chain strategies: where to hold inventory, how close to position it to customers, how much capacity to outsource and how aggressively to automate operations.

JLL said the industrial market entered the second half with stronger demand but continued uncertainty from trade policy, tariffs, and geopolitical conflicts. It expects a slower pace of new warehouse deliveries and improved tenant demand to support the market into 2027, particularly for modern, well-located facilities built to support automation.

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Performance Food Group is entering fiscal 2027 with more customers and cases moving through its distribution network — and higher costs associated with delivering them.

The Richmond, Virginia-based food distributor said fourth-quarter operating expenses increased 6.4% to $1.8 billion, driven partly by higher fuel prices and additional miles driven to support new business. Higher wages and commissions and increased depreciation tied to transportation equipment and facilities under finance leases also contributed to the increase.

For the full fiscal year ended June 27, operating expenses increased 9.1% to $7.2 billion. PFG again cited higher fuel prices and miles driven, along with acquisitions, higher personnel expenses, increased auto and workers’ compensation insurance costs and additional depreciation tied primarily to transportation equipment and facilities under finance leases.

The company disclosed in its annual filing that fuel expense alone increased $57.1 million during fiscal 2026 because of higher fuel prices and additional miles driven to support new business.

The higher distribution costs are coming as PFG continues to add volume and take market share.

Fourth-quarter net sales increased 6.4% to $18.03 billion from $16.94 billion a year earlier. Total case volume increased 3.5%, while organic case volume increased 1.8%. Net income increased 23.4% to $162.3 million from $131.5 million.

For fiscal 2026, sales increased 7.2% to $67.84 billion from $63.30 billion. Total case volume increased 5.1%, while organic case volume increased 2.8%. Net income increased 5.6% to $359.3 million from $340.2 million.

“Our solid execution throughout the year produced a strong finish to fiscal 2026,” President and CEO Scott McPherson said. “Consistent market share gains across our business units translated into strong revenue growth and record-setting EBITDA results.”

The results show the operational demands accompanying that growth.

PFG operates more than 150 locations and delivers food and related products to more than 350,000 customer locations across North America. The company has more than 44,000 employees and operates across foodservice, convenience, and specialty distribution.

As volume increases, PFG must move more product through that physical network while controlling the cost of warehouse labor, transportation, fuel, insurance, and outbound freight.

That challenge is particularly apparent in PFG’s Foodservice business.

Fourth-quarter Foodservice sales increased 6.8% to $9.82 billion from $9.19 billion a year earlier. Total Foodservice case volume increased 4.1%.

Independent restaurant customers produced faster growth. Independent case volume increased 8%, including 5.8% organic growth as PFG added customers and expanded business with existing accounts.

Independent customers represented 43.1% of Foodservice sales during the quarter.

PFG said those customers generate higher gross profit because of the additional services it provides. But the growth also comes with higher servicing costs.

Operating expenses affecting Foodservice increased 9.9%, outpacing the segment’s 6.8% sales growth. PFG attributed the increase primarily to higher personnel expenses, acquisitions, increased fuel expense from higher prices and additional miles driven to support new business, and higher auto and workers’ compensation insurance costs.

Foodservice’s adjusted EBITDA increased 2.2% to $395.5 million, significantly slower than its sales growth.

The numbers highlight a central operational issue for PFG: Winning higher-value independent customers can improve the sales mix, but serving a larger and more fragmented customer base also puts additional demands on the distribution network.

PFG is seeing a similar dynamic in its Convenience business.

Fourth-quarter Convenience sales increased 5.7% to $6.81 billion from $6.44 billion. Case volume increased 3.9%, primarily because of new chain customers.

Operating expenses affecting the business increased 4.8%.

PFG said the increase was driven primarily by higher personnel expenses needed to support the additional case volume and higher fuel expense caused by increased fuel prices and miles driven from new business.

Convenience adjusted EBITDA increased 10.4% to $132.5 million.

The results show how new account wins translate almost immediately into operational requirements. Additional customers mean more cases moving through distribution centers, more delivery activity and greater demands on labor and transportation capacity.

PFG’s Specialty business is encountering another logistics pressure: small-parcel freight.

Fourth-quarter Specialty sales increased 6.6% to $1.34 billion, while case volume increased just 0.8%.

Operating expenses affecting Specialty increased 8.4%, driven partly by higher fuel and personnel expenses and increased outbound freight costs primarily related to small-parcel volume.

Specialty adjusted EBITDA declined 0.5% to $92.7 million.

The segment’s results demonstrate that transportation pressure is not limited to PFG’s traditional foodservice truck routes. Parcel fulfillment is also adding cost as the company’s mix of channels and customers expands.

PFG invested $384.1 million in capital expenditures during fiscal 2026, down $121.9 million from the previous year.

The company’s financial results also show continued additions of transportation equipment and facilities through finance leases. PFG cited those investments as a major reason depreciation and amortization expenses increased.

At the same time, the distributor generated $1.41 billion in operating cash flow, up from $1.21 billion the previous year.

That gives PFG significant capacity to continue investing in its distribution infrastructure as volume grows.

The company’s network has also expanded through acquisitions, including Cheney Brothers, which PFG acquired in October 2024. PFG cited the acquisition as one of the contributors to fiscal 2026 sales growth and higher operating expenses.

The combination of organic customer growth and acquisitions is increasing the amount of business PFG’s distribution infrastructure must support.

That pressure is unlikely to ease as PFG enters its new fiscal year.

The distributor expects fiscal 2027 sales of $72.5 billion to $73 billion, which would represent another increase of $4.7 billion to $5.2 billion from fiscal 2026.

For the fiscal first quarter, PFG expects sales of $17.9 billion to $18.1 billion.

“We enter fiscal 2027 with significant momentum, reflected in the outlook we are providing today,” McPherson said.

For PFG’s distribution operations, that momentum means more product moving through warehouses and more deliveries moving through its transportation network.

The company’s fiscal 2026 results show the trade-off.

PFG is winning business and moving more cases, particularly with independent restaurants and new convenience-store chain customers. But those gains are also producing higher fuel costs, additional miles, higher labor expenses, greater insurance costs and increased investment in transportation equipment and facilities.

That makes logistics productivity more than a cost-control issue.

As PFG pushes toward as much as $73 billion in annual sales, its ability to absorb billions of dollars in additional business without distribution costs increasing at the same pace will become an increasingly important part of its growth strategy.

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UK flooring distributor Likewise Group has raised approximately £32.5 million ($44.2 million) as it expands its distribution network and builds capacity for a significantly larger business.

The Birmingham, England-based distributor raised the capital through a combination of share placements, subscriptions, and a retail share offering. The retail portion raised approximately £4 million ($5.4 million) after Likewise increased the offering from an initial £2 million ($2.7 million).

Shareholders approved the remaining portion of the fundraising Aug. 14, and 30.5 million additional shares were scheduled to begin trading Aug. 17 on the London Stock Exchange’s AIM market.

The capital raise comes as Likewise adds physical distribution capacity to support continued sales growth.

The company has exchanged contracts to acquire a 60,000-square-foot high-bay distribution facility in Corby, England. The total acquisition cost, including stamp duty, is approximately £9.5 million ($12.9 million), with completion expected Aug. 21.

The facility is expected to become the fifth major distribution hub for Likewise Floors and expand the distributor’s ability to serve customers across the UK.

The Corby investment is part of a broader plan to build distribution and processing infrastructure capable of supporting approximately £300 million ($408 million) in annual group sales, above Likewise’s current revenue.

Likewise is building distribution capacity ahead of sales

The Corby facility is the latest step in a wider expansion of Likewise’s UK logistics network.

The distributor has invested in warehouse, cutting and processing capacity as it seeks to capture a larger share of the UK flooring market.

Likewise has previously added logistics capacity in Plymouth and expanded cutting and processing operations in Glasgow and Derby. It has also developed Newport into a distribution hub and added capacity in Leeds.

The strategy is designed to put inventory and processing capabilities closer to independent flooring retailers and contractors while increasing the amount of volume the network can handle.

That infrastructure is being built ahead of the company’s current sales.

Likewise reported 2025 revenue of approximately £163.1 million ($221.8 million), up 9% from £149.8 million ($203.7 million) in 2024.

Underlying profit before tax increased 56% to approximately £3.1 million ($4.2 million) from £2 million ($2.7 million).

Sales accelerated further in 2026.

Revenue increased 15% during the first three months of the year, and the company said similar momentum continued in April. By July 20, year-to-date revenue was running 17.8% above the prior year.

The performance is giving Likewise reason to add distribution capacity before its existing network reaches its longer-term sales target.

Distribution is central to the growth strategy

Likewise operates a wholesale flooring distribution business serving independent flooring retailers and contractors across the UK. The company says it now has 12 locations providing nationwide geographic coverage.

Its products include carpet, residential vinyl, luxury vinyl tile, laminate, underlay, and artificial grass.

Flooring distribution places particular demands on the physical network. Distributors must hold large amounts of inventory, process and cut flooring to customer specifications and provide frequent deliveries to independent retailers and contractors.

That makes warehouse location, processing capacity, and inventory availability central to Likewise’s expansion strategy.

The company has also been expanding its sales organization alongside its physical infrastructure, seeking to put more volume through the network as additional capacity comes online.

Likewise, it has said its objective since its formation has been to build a meaningful UK flooring distribution business and capture at least 10% of a UK flooring market it estimates at £2 billion ($2.72 billion).

The company was formed in 2018 and expanded through acquisitions before moving to the London Stock Exchange’s AIM market in 2021. It acquired Valley Wholesale Carpets in January 2022.

Likewise now describes its business as focused primarily on organic growth from its existing locations.

Fundraising leaves room for further expansion

Not all the £32.5 million ($44.2 million) raised is earmarked for the Corby facility.

Likewise said the proceeds will also strengthen its balance sheet, cover transaction costs, and provide additional flexibility to pursue its growth strategy, including potential acquisitions.

The company also arranged approximately £9 million ($12.2 million) of additional financing from NatWest associated with the Corby transaction. That includes a £7.2 million ($9.8 million) commercial mortgage facility and a £1.8 million ($2.4 million) value-added tax bridging facility, subject to final documentation.

The additional capital gives Likewise more flexibility to invest in both organic expansion and potential acquisitions as it builds its national distribution platform.

The strategy is increasingly centered on scale.

Likewise generated approximately £163.1 million ($221.8 million) in revenue last year. It is now developing infrastructure intended to support approximately £300 million ($408 million) in annual sales.

That leaves a gap of £137 million ($186.3 million) between its 2025 revenue and the amount of business its planned infrastructure is intended to support.

Closing that gap will require continued organic growth, market-share gains, and potentially additional acquisitions.

Likewise’s recent performance suggests the company is already putting more volume through the network. Year-to-date revenue was up 17.8% as of July 20.

The Corby investment shows the next phase of the strategy: Rather than waiting for its existing network to reach capacity, Likewise is adding warehouse and processing infrastructure ahead of expected growth.

For the distributor, the challenge now is to generate enough additional business to fill it.

Join DSG in Birmingham: Distribution Strategy Group will bring its Applied AI for Distributors Forum to the U.K. and Europe on Oct. 15, 2026, at the National Conference Centre in Birmingham, England. The one-day event will bring together distribution executives and AI leaders to examine how distributors are putting artificial intelligence to work across sales, operations, customer service, and other parts of the business. Learn more and register at Distribution Strategy Group’s AI Forum UK & EU.

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U.S. wholesale prices were unchanged in July as declines in energy, food and freight costs offset higher prices for services and construction, according to federal data released Thursday.

The Producer Price Index for final demand was flat in July after falling 0.1% in June and rising 0.5% in May, the U.S. Bureau of Labor Statistics said. Producer prices were 4.7% higher than a year earlier.

The July report showed easing costs in several areas important to distributors, particularly fuel and transportation. But the year-over-year increase and continued gains in some business input costs suggest distributors are still operating in a higher-cost environment.

Prices for final demand goods fell 0.7% in July after declining 1.4% in June. Energy prices dropped 3.1%, and food prices declined 0.9%. Prices for goods excluding food and energy edged up 0.1%.

Gasoline prices fell 5.7% and accounted for more than half of the decline in goods prices. Prices also fell for diesel fuel, jet fuel, residual fuels and thermoplastic resins and materials. Motor vehicle and equipment prices increased 0.3%, while electric power and grain prices also rose.

Freight costs also declined. Prices for final demand transportation and warehousing services fell 1.8%, including a 1.8% decrease in truck freight transportation prices.

The declines were offset by higher prices elsewhere. Final demand services rose 0.2%, while construction prices increased 2.2%.

A measure that excludes food, energy and trade services increased 0.4% in July after rising 0.1% in June. That index was also 4.7% higher than a year earlier.

Business Input Costs Remain Elevated

Prices further up the supply chain also showed declines in energy-related costs but continued pressure in other categories.

Prices for processed goods sold to businesses as inputs fell 0.6% in July after declining 1.1% in June. Processed energy prices dropped 3.1%, while processed food and feed prices fell 0.5%. Prices for processed materials excluding food and energy edged up 0.1%.

Despite the monthly decline, prices for processed goods for intermediate demand were 9.9% higher than a year earlier.

Diesel fuel prices in that category fell 6.7%. Prices also declined for jet fuel, basic organic chemicals, gasoline and thermoplastic resins and materials. Lumber prices, however, increased 5%.

Prices for unprocessed goods sold to businesses fell 1.8% in July after dropping 6.4% in June. The decline was driven by a 7.4% decrease in unprocessed energy materials. Crude petroleum prices fell 11.9%.

Business service costs moved in the opposite direction. Prices for services for intermediate demand rose 0.5% in July and were 5.1% higher than a year earlier. Trade-service margins increased 0.7%, while transportation and warehousing services fell 0.5%.

BLS also reported higher margins for food and alcohol wholesalers and machinery and equipment parts and supplies wholesalers. Building materials, paint and hardware wholesaling declined.

The July figures leave distributors with a mixed cost picture. Lower fuel, freight and energy prices could reduce near-term operating and transportation costs, but producer prices remain above year-ago levels, while processed business inputs and services continue to carry significant increases.

BLS is scheduled to release August producer price data Sept. 10.

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Sunoco LP has agreed to acquire Offen Petroleum for about $600 million in cash, a deal that would expand the fuel distributor’s customer base and geographic reach across the Midwest, Mountain West, and Southwest.

Offen distributes approximately 2.5 billion gallons of fuel annually to about 7,000 customers and more than 800 retail stations.

The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approval.

For Sunoco, the acquisition adds significant scale to a distribution business that already moves more than 15 billion gallons of fuel annually. Based on those figures, Offen’s annual volume is equivalent to 17% of Sunoco’s current distribution volume.

Sunoco distributes fuel to approximately 11,000 Sunoco and partner-branded retail locations, independent dealers, and commercial customers. The Offen acquisition would deepen its presence in several U.S. regions and give the company a larger platform for additional expansion and acquisitions.

Sunoco said Offen’s geographic footprint complements its existing distribution operations.

The deal also underscores Sunoco’s strategy of combining a large fuel distribution network with transportation and storage infrastructure. The Dallas-based company operates about 14,000 miles of pipeline and more than 170 terminals.

Offen’s network would give Sunoco broader access to retail and commercial fuel customers in markets where delivery density, terminal access and regional scale can influence distribution costs and service levels.

Sunoco did not disclose Offen’s annual revenue or provide details on potential changes to Offen’s workforce, management, or operating structure after the acquisition.

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W.W. Grainger is accelerating investments in data center projects, customer productivity services, fulfillment infrastructure, and digital commerce as it sharpens its growth strategy and raises its outlook for 2026.

The Lake Forest, Illinois-based distributor reported second-quarter sales of $5.02 billion, up 10.3% from $4.55 billion a year earlier. Net income attributable to Grainger increased 18.3% to $570 million from $482 million, while operating earnings rose 19.0% to $807 million from $678 million. Operating margin expanded to 16.1% from 14.9%.

For the first six months of 2026, Grainger generated sales of $9.76 billion, up 10.2% from $8.86 billion in the first half of 2025. Net income attributable to Grainger increased 17.1% to $1.13 billion from $961 million, while operating earnings climbed 18.2% to $1.60 billion from $1.35 billion. During its second-quarter earnings call, executives outlined several strategic initiatives that extend well beyond quarterly financial results, highlighting where the company expects to capture additional market share in the years ahead.

Among the biggest opportunities is the surge in data center construction, which management said is driving demand not only directly but also across manufacturing, electrical infrastructure, and contractor markets.

Chairman and CEO D.G. Macpherson said Grainger’s direct exposure to data centers remains less than 1% of revenue, but the broader ecosystem is becoming an increasingly meaningful growth catalyst.

“We’re seeing significant projects and project business come through,” Macpherson said. “It’s been a tailwind on revenue.”

Management estimated that large customer projects added 90 basis points to growth in the High-Touch Solutions segment during the quarter and expects that momentum to continue through the remainder of 2026 and potentially beyond. While project work carries lower gross margins than traditional MRO business, executives said it delivers comparable operating profitability.

Grainger also said its competitive strategy increasingly centers on helping customers operate more efficiently rather than simply supplying products.

Macpherson described customers asking Grainger to improve inventory management, strengthen workplace safety and solve operational challenges inside manufacturing facilities. In one case, he said Grainger’s safety expertise became the catalyst for expanding a customer relationship.

The approach reflects a broader shift among large distributors toward embedding technical expertise, inventory management, and operational consulting into customer relationships to deepen engagement and improve retention.

To support future growth, Grainger recently opened a new technology-enabled distribution center in Oregon that began outbound operations in July.

Executives said the Northwest facility positions inventory closer to customers, shortens delivery times and strengthens the company’s fulfillment network as customer expectations for speed and product availability continue to increase.

Grainger continues to invest heavily in its Endless Assortment businesses, including Zoro in the U.S. and MonotaRO in Japan.

Management said Zoro is improving customer retention through more targeted marketing while continuing investments in product assortment, search capabilities, pricing, and delivery performance.

The company is also taking a more disciplined approach to assortment management after eliminating low-performing products, adding new SKUs more selectively while continuously pruning items with limited demand.

Another strategic initiative involves streamlining Grainger’s private-label portfolio.

Macpherson said the company is reducing 14 legacy private brands to four or five core brands, with many products transitioning to the Grainger brand. The initiative is intended primarily to strengthen brand recognition and drive long-term growth rather than improve margins. The Dayton brand will remain.

Executives also pointed to Canada as an example of operational execution paying off.

Over the past several years, Grainger has rebuilt its Canadian sales organization, improved customer service, modernized its website and diversified its customer base and product portfolio. Those efforts have produced the strongest operating margins in Canada in a decade, management said.

Grainger said MRO demand strengthened across every major customer segment during the quarter, with manufacturing, government, contractors, and retail all contributing to growth.

Macpherson said the industrial market has shifted from several years of sluggish demand to a healthier growth environment, while Grainger continues to gain market share through pricing discipline, customer service, and operational execution.

The company expects those trends, coupled with continued infrastructure investment and customer productivity initiatives, to support growth through the second half of 2026.Do not miss any content from Distribution Strategy Group. Join our list.

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James Hardie Building Products is expanding its U.S. distribution network by giving six regional distributors access to its full portfolio of exterior building products, a move aimed at broadening market coverage and making it easier for contractors and dealers to source multiple product categories from a single supplier.

The company said that Capital Lumber, Dixie Plywood & Lumber Co., Lumbermen’s Inc., Parksite, Woodgrain and Woolf Distributing will add Hardie siding and trim to the AZEK, TimberTech and other exterior products they already distribute in designated markets.

The expansion builds on longstanding relationships with the distributors rather than creating new partnerships. Until now, the companies primarily distributed James Hardie’s affiliated outdoor living brands but not its flagship fiber cement siding and trim products.

The announcement follows a separate agreement disclosed Monday under which Boise Cascade’s Building Materials Distribution division became the exclusive nationwide U.S. distributor of James Hardie’s complete portfolio of exterior building products, effective July 31. The regional agreements complement that nationwide arrangement by expanding the product assortment available through key regional distributors.

James Hardie said the strategy is intended to strengthen its distribution network while improving product availability and simplifying purchasing for builders, contractors and dealers. Customers in participating markets will be able to source siding, trim, decking, railing and other exterior building products through the same distribution partners.

The move follows James Hardie’s acquisition of The AZEK Co. earlier this year, which combined the company’s fiber cement siding business with AZEK’s portfolio of composite decking, railing and outdoor living products. Expanding distribution of the combined portfolio is a key step in integrating the businesses and bringing the broader product offering to market.

For distributors, the expanded partnerships create opportunities to increase sales per customer by offering a more complete exterior-building products portfolio while reducing the need for contractors to purchase from multiple suppliers.

James Hardie did not disclose financial terms of the expanded distribution arrangements or identify the specific markets where the full product portfolio will be available.

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