Crescent Electric Supply Co. has promoted Kristee Mitchell to chief supply chain officer, putting her in charge of key supply chain and distribution operations across one of the nation’s largest independent electrical distributors.

Mitchell, who joined Crescent in 2023, moved into the newly expanded role Aug. 31 after most recently serving as vice president of supply chain fulfillment.

She will oversee supplier partnerships, supply chain fulfillment, distribution center operations, transportation management, and operational excellence across the company. The responsibilities give Mitchell broad oversight of the operations that move products from suppliers through Crescent’s distribution network and to customers.

The East Dubuque, Illinois-based distributor said the promotion is part of its continuing effort to evolve its organizational structure and improve operational performance.

“We congratulate Kristee on this well-deserved promotion and look forward to the results that she will drive,” CEO Penny Cotner said.

Mitchell holds an executive Master of Business Administration in global supply chain management from the University of Tennessee and a bachelor’s degree in supply chain management from Michigan State University.

Crescent operates at more than 140 branches in 28 states and serves contractors, original equipment manufacturers and maintenance, repair, and operations customers in commercial, industrial, institutional, and utility markets.

In addition to its Crescent Electric operations, the company’s regional brands include BA Supply in Missouri; Interstate Electric Supply in Idaho and Oregon; Mesco Electrical Supply in Ohio; National Electric Supply in New Mexico; Womack Electric Supply in Virginia and North Carolina; Stoneway Electric in Washington and Idaho; and Lowe Electric in Georgia and South Carolina.

The promotion puts Mitchell at the center of Crescent’s efforts to coordinate suppliers, inventory movement, distribution center operations and transportation across that multistate network, functions that directly affect product availability, delivery performance, and customer service.

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Winsupply has acquired a 48,000 square foot facility next to its Dayton, Ohio, distribution center as the distributor moves ahead with a 1.6 million square foot expansion of its national distribution network.

The company said Sept. 3 that it closed this week on the purchase of the former Planes Moving & Storage facility at 9370 Byers Road in Miami Township. The building sits next to Winsupply’s existing distribution center, where the company is adding approximately 200,000 square feet.

Winsupply said the newly acquired building is intended for future use. The company did not disclose the purchase price or provide details on how the facility ultimately will be used.

The acquisition comes as Winsupply advances a broader distribution expansion announced in March. The company plans to add 1.6 million square feet of capacity over two years through projects in Ohio, Oklahoma and Georgia.

The largest is a 1.17 million square foot distribution center Winsupply purchased in Atlanta. The facility will become the company’s eighth distribution center.

Winsupply also is adding 254,000 square feet to its existing Oklahoma City distribution center and approximately 200,000 square feet to its Dayton operation.

The Dayton expansion is expected to be the last of the three major projects completed, with work scheduled to finish around fall 2027.

“The additional space in Dayton will enable Winsupply to increase our product breadth and depth and provide the products to Local Companies so they can serve their customers,” Winsupply president Jeff Dice said.

Winsupply said the Dayton project has required extensive site preparation, with more than 20,000 truckloads of dirt removed as of June.

The company has positioned the three distribution projects as a way to increase product availability and inventory depth across its network of more than 680 locally operated wholesale companies.

Winsupply Inc. holds majority equity stakes in those businesses, known as Winsupply Local Companies. They distribute construction and industrial products across markets including plumbing, heating, ventilation and air conditioning, electrical, waterworks, pipes, valves and fittings, pumps and maintenance, repair and operations.

The additional distribution capacity is designed to give those local businesses access to broader product assortments and deeper inventory while centralizing more of the infrastructure required to support their growth.

Winsupply described the 1.6 million square foot program in March as one of the most significant periods of infrastructure growth in the company’s history.

The company reported $8.4 billion in sales for the fiscal year ended Jan. 31, 2026, which Winsupply described in April as a record fiscal year. The Winsupply family of companies employs more than 9,500 people nationwide.

The latest property purchase extends Winsupply’s investment around its Dayton distribution operation while the larger network expansion moves forward. In Dayton alone, the company is adding approximately 200,000 square feet to its existing distribution center and now has another 48,000 square foot building available for future use.

For distributors, the broader investment illustrates how Winsupply is putting more warehouse capacity behind its decentralized wholesale model. Rather than changing the local ownership structure at the center of its business, the company is expanding the distribution infrastructure those businesses can use to increase product availability and assortment as they grow.

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BlueLinx Holdings Inc. is expanding its outdoor living business through a new distribution agreement with Trex Company Inc., adding the composite decking manufacturer’s products across 11 distribution centers in the Midwest and Southeast.

Atlanta-based BlueLinx said it will distribute Trex decking and railing products from distribution centers in Indianapolis; St. Louis; Cincinnati; Erwin and Nashville, Tennessee; Atlanta; Birmingham, Alabama; Memphis, Tennessee; Gulfport, Mississippi; Little Rock, Arkansas; and Monroe, Louisiana.

The distribution territory covers markets in Missouri, Illinois, Ohio, Kentucky, West Virginia, Tennessee, Arkansas, Louisiana, Mississippi, Alabama and Georgia.

The agreement expands BlueLinx’s specialty products portfolio as the building products distributor looks to increase its exposure to higher-value product categories. The company distributes lumber, panels, engineered wood, siding, millwork and industrial products, along with other branded and private-label building products.

Adding Trex also gives BlueLinx another major brand in its outdoor living portfolio and creates opportunities to sell complementary products to existing dealers and contractors.

BlueLinx CEO Shyam Reddy said the distributor is seeking to expand its portfolio with established brands that can increase value to customers and create additional growth opportunities.

Trex, based in Winchester, Virginia, manufactures composite decking and residential railing as well as other outdoor living products. The company sells its products through more than 6,700 retail outlets across six continents.

For Trex, the BlueLinx agreement adds distribution capacity across a sizable portion of the central and southeastern U.S.

BlueLinx serves customers in all 50 states through its distribution network. Its customers include national home centers, professional dealers, cooperatives, specialty distributors, regional and local dealers and industrial manufacturers.

The Trex agreement is the latest move by BlueLinx to put more emphasis on specialty products, which the company views as an avenue for expanding sales beyond more commodity-oriented building materials while increasing the amount of business it does with existing customers.

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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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W.W. Grainger Inc. has acquired technology, intellectual property, and talent assets from Adroit Worldwide Media for $210 million in cash, adding technology designed to automate inventory management for industrial customers.

Chicago-based Grainger said the acquired assets will strengthen inventory management capabilities within its High-Touch Solutions — North America segment. The company plans to begin integrating the technology immediately and launch a commercial pilot within the next several months.

Grainger said the technology is expected to help customers lower the total cost of managing maintenance, repair, and operating inventory, improve product availability and free skilled employees for higher-value work. The company said the acquisition is not expected to contribute materially to near-term results.

Adroit Worldwide Media, or AWM, develops technology that uses artificial intelligence, computer vision, and sensors to automate inventory tracking and replenishment.

AWM’s current systems combine AI-powered vision and sensor technology with smart shelving, inventory analytics, and access controls. The company says its technology can track tools and consumable products across warehouses, cribs and other locations and link products removed to individual users, job codes, or accounts.

AWM also offers predictive replenishment technology designed to identify what inventory should be restocked and when. Other capabilities include tool tracking, smart shelves with weight detection, product mapping, automated inventory reporting, and real-time inventory visibility.

Those capabilities provide more detail around what Grainger described in announcing the acquisition as “frictionless technology for industrial B2B distribution.”

AWM has previously applied its technology specifically to industrial inventory management.

In 2020, AWM announced a global partnership with OptiCrib, a Shamrock company, to apply its Automated Inventory Intelligence and AWM Frictionless technologies to industrial and commercial storeroom management.

The OptiCrib system used high-definition optical sensors combined with weight-sensing technology to automate monitoring of on-shelf inventory. The companies said the technology was designed to provide continuous inventory accountability for durable and consumable materials.

The application puts AWM’s technology squarely into an area already familiar to industrial distributors: managing and replenishing products inside customer facilities.

AWM has also deployed its computer vision and frictionless technology in automated retail environments. In 2024, Denver-based Choice Market selected AWM as its preferred frictionless checkout and technology development partner for its automated Mini-Mart concept. The partnership was intended to help Choice expand the format across locations including multifamily developments, campuses, electric vehicle charging sites and hospitality properties.

AWM is headquartered in Aliso Viejo, California, and lists a production facility in Santa Ana, California. Its website also lists fulfillment or warehouse locations in Las Vegas; Salt Lake City; Sacramento; Boise, Idaho; and Santa Ana.

Grainger did not disclose in its acquisition announcement which specific AWM technologies or intellectual property were included in the transaction or how many AWM employees are joining Grainger.

The investment comes as Grainger’s High-Touch Solutions — North America business continues to post robust growth.

Sales in the segment increased 11.9% in the second quarter from a year earlier. Companywide sales increased 10.3% to $5.02 billion from $4.55 billion, while operating earnings rose 19% to $807 million from $678 million.

Grainger also raised its full-year 2026 sales forecast Aug. 4 to between $19.4 billion and $19.7 billion, up from its previous range of $19.2 billion to $19.6 billion.

For Grainger, the acquisition potentially extends its inventory management capabilities beyond supplying MRO products and into more automated tracking and replenishment after products reach a customer’s facility.

AWM’s existing industrial technology is designed to provide visibility into what products are on hand, who is using them, what has been removed and what needs to be replenished.

Grainger will now evaluate whether those capabilities can become a broader commercial offering within its High-Touch Solutions business.

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The electronics supply chain is tightening again, with manufacturers reporting worsening component availability and longer supplier lead times during the second quarter.

Two-thirds, or 64%, of electronics manufacturers said components and materials were available only in limited quantities or with extended lead times, according to the Global Electronics Association’s August 2026 Global Sentiment Survey. No respondents reported readily available supplies with excess inventory.

The deterioration accelerated during the second quarter. 44% of manufacturers said component and materials availability worsened from the first quarter, compared with 10% that reported improvement. Another 42% said conditions were about the same.

Lead times also moved in the wrong direction. 53% of respondents said supplier lead times for components and materials increased during the second quarter, while just 3% said they decreased.

The results point to supply constraints across several major component and material categories rather than an isolated shortage.

Memory products and laminates and resins were each cited by 16% of respondents as leading sources of disruption. Microprocessors and graphics processing units followed at 14%, while 11% cited passive components.

The sources of supply pressure also differed by region.

In Europe, 35% of respondents cited laminates and resins as a source of disruption, compared with 6% in North America. In the Asia-Pacific region, 33% identified passive components as a source of supply pressure.

The findings could have broader implications for electronics distributors if manufacturers increase orders or carry more inventory to protect against longer lead times. Tighter supplies also could increase demand for alternative components and suppliers as customers try to keep production schedules on track.

“The signals have been building for months,” the Global Electronics Association said in releasing the findings. “Now the numbers confirm it: the electronics manufacturing supply chain is facing renewed and measurable pressure on component and materials availability, and conditions are moving in the wrong direction.”

The association stopped short of describing current conditions as a supply-chain crisis, but said the combination of constrained availability, longer lead times and shortages across multiple component categories warrants closer attention.

“The industry is not in crisis, but the trend lines are worth watching closely,” the association said.

The Global Electronics Association conducts its Global Sentiment Survey monthly to track conditions across the electronics manufacturing industry. The August survey included questions focused on component and materials availability.

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New 50% U.S. tariffs on $20 billion of Canadian goods took effect Aug. 22, expanding import costs across products ranging from cement and plywood to furniture and other goods sold through distribution.

The Trump administration imposed the duties under Section 338 of the Tariff Act of 1930, opening another front in a trade dispute with Canada while distributors continue to adjust pricing and purchasing strategies to a U.S. tariff system that has changed repeatedly this year.

President Donald Trump signed three proclamations July 20 targeting Canadian dairy products, alcoholic beverages, and motor vehicles over trade practices the administration considers discriminatory.

The tariffs were initially scheduled to take effect Aug. 19 but were delayed three days while U.S. and Canadian officials continued negotiations. The talks ended without an agreement, and U.S. Trade Representative Jamieson Greer said no additional discussions were planned.

Canadian Prime Minister Mark Carney said Canada would retaliate “dollar for dollar.”

The affected products extend well beyond the categories highlighted by the administration. Annexes to the proclamations include cement, plywood, furniture, wine, clothing, seeds, fishing rods, hockey sticks, and swimming pools, among hundreds of tariff classifications.

The duties apply even to products that qualify for preferential treatment under the United States-Mexico-Canada Agreement, eliminating an exemption that had shielded many Canadian products from previous U.S. tariffs.

Canada responded with tariffs on U.S. products including steel, dairy products, appliances, agricultural machinery, paper, and electronics.

U.S. Tariff Policy Continues to Shift

The Canadian tariffs are the latest change in a U.S. trade policy that has been reshaped several times in 2026 by court decisions and new administration actions.

The U.S. Supreme Court ruled 6-3 on Feb. 20 that the International Emergency Economic Powers Act did not give the president authority to impose tariffs, invalidating duties imposed under the law. Those included the administration’s 2025 reciprocal tariffs and fentanyl-related tariffs on Canada, Mexico, and China.

U.S. Customs and Border Protection stopped collecting the affected duties following the decision. A process for refunding previously collected tariffs is underway, although the government has not completed procedures for returning all the money.

The administration responded by invoking Section 122 of the Trade Act of 1974, which permits temporary import surcharges of up to 15% for no more than 150 days under certain balance-of-payments conditions.

A 10% global surcharge took effect Feb. 24.

The U.S. Court of International Trade ruled against the surcharge in May. The administration appealed, and the U.S. Court of Appeals for the Federal Circuit stayed the decision June 11, allowing collection to continue during the appeal.

The Section 122 surcharge expired July 24. The U.S. Trade Representative then imposed tariffs of 10% to 12.5% on imports from about 60 trading partners under Section 301, citing forced-labor enforcement.

Twenty-five states sued Aug. 3 in the Court of International Trade seeking to block those tariffs and recover duties already collected.

Section 232 national security tariffs have remained on a separate track. Steel and aluminum duties were increased from 25% to 50% in 2025 and subsequently expanded to additional derivative products.

The administration completed a Section 232 investigation into polysilicon on Aug. 6, resulting in a 15% tariff and minimum import prices on the material used in semiconductor and solar manufacturing. A Section 201 tariff on quartz surface products took effect July 31.

A separate Section 301 investigation into structural manufacturing overcapacity covering 16 countries remains open. Brazil has faced a 25% Section 301 tariff since July 22.

For distributors, the result is a patchwork of tariffs imposed under different laws, covering different countries and products and carrying different expiration dates and legal risks.

Public Distributors Turn to Pricing

Second-quarter earnings reports provide a clearer picture of how distributors are responding to those costs.

W.W. Grainger reported $43 million in refunds related to invalidated IEEPA tariffs during the second quarter, adding about 90 basis points to gross margin.

CEO D.G. Macpherson said the refunds were smaller than the cumulative tariff-related cost increases Grainger had absorbed and said the company does not expect refunds of similar magnitude going forward.

Grainger adjusted prices during the quarter as tariff policy changed and is planning another pricing action in September. The company expects the increase to add about 1% to annual revenue and help offset freight and tariff-related costs.

Third-quarter operating margin is expected to decline sequentially as the tariff-refund benefit does not repeat.

Fastenal executives also said tariff-related costs pressured gross margin during the first half of the year. Pricing actions have helped offset those increases and broader inflation, with the company continuing to target price-cost neutrality rather than using tariff-related increases to expand margins.

Watsco has seen a similar shift.

Chairman Albert Nahmad cited tariffs alongside the pandemic, supply chain disruptions and regulatory changes as challenges the HVAC distributor has managed during the past five years.

Executive Vice President Barry Logan said aggressive manufacturer price increases in 2025 reflected the unusual combination of tariffs and inflation and should not be considered a new pricing baseline. He said that pricing behavior in 2026 has moved closer to historical patterns, he said.

Ferguson executives said the distributor has not received tariff refunds from branded suppliers and does not expect to receive them. Ferguson is the importer of record for only a small portion of its own-brand products, limiting its direct exposure to potential refunds.

Core & Main is seeing tariff effects primarily through product pricing rather than direct import costs.

CEO Mark Witkowski said the company remains cautious about private construction because of geopolitical and tariff uncertainty, interest rates, and builder confidence.

Chief Financial Officer Robyn Bradbury said PVC pipe prices had declined about 15% during the year, although recent supplier increases could provide modest revenue benefit during the second half of fiscal 2026.

The distributor also reported higher steel prices in its fire protection business, which Witkowski attributed in part to tariff-related costs moving through the supply chain.

WESCO International said its direct tariff exposure remains limited because it is the importer of record for only a low-single-digit percentage of its cost of goods sold. The company does not expect significant recoveries through the IEEPA refund process.

WESCO said it adjusts prices to maintain margins as tariff-related costs increase. Executives said indirect effects, including transportation costs, have been more noticeable but remain manageable.

Applied Industrial Technologies reported a pricing contribution of about 2% to 2.5% from tariff-related supplier increases during fiscal 2026. The company expects that contribution to moderate to about 1.5% to 2% during fiscal 2027.

CEO Neil Schrimsher said trade policy and geopolitical conditions could affect industrial production and customer spending. Chief Financial Officer David Wells said tariff conditions were stabilizing, heading into the new fiscal year.

Across the seven distributors, the response has been broadly consistent: Companies are passing on higher costs through pricing while not counting on tariff refunds or making significant changes to their sourcing networks.

Canadian Tariffs Add to 2027 Planning

The new Canadian duties add another cost variable as distributors begin planning purchasing, inventory, and pricing for 2027.

Section 338 allows tariffs of up to 50%, meaning the administration has already reached the statute’s maximum rate on the affected Canadian products. How long those duties remain in place could depend on whether Washington and Ottawa resume negotiations.

For distributors importing affected Canadian building materials and industrial products, the more immediate issue is how quickly higher landed costs move through inventories and into customer prices.

Recent results from major public distributors suggest the industry’s response is becoming increasingly consistent: recover tariff-related costs through pricing rather than wait for trade negotiations, court decisions, or refunds to provide relief.

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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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