Tariffs Spark Stockpiling, Industrial Outdoor Storage Demand

As reported by Bisnow, contractors and suppliers are racing to prepare for potential tariffs under the Trump administration’s proposed trade policies.

With tariffs as high as 25% on goods from Canada and Mexico and 60% on Chinese imports, construction firms look to industrial outdoor storage as a solution for managing rising costs.

Reviving Interest

The list of affected goods includes steel, lumber, concrete, HVAC components, and construction equipment—necessities for both commercial and residential projects. As a result, contractors are scrambling to secure materials ahead of time to avoid escalating costs.

“What [contractors] don’t want is to quote a fixed price on a project and then watch their materials or equipment costs skyrocket,” said Associated Builders and Contractors Chief Economist Anirban Basu. 

This uncertainty has led to increased stockpiling activity, particularly for high-value items like equipment that can be stored long-term.

Reviving IOS Interest

Industrial outdoor storage, which saw a spike in demand during the pandemic, is regaining attention as contractors seek affordable and flexible storage options.

“If suppliers choose to stockpile materials, they will increase inventory throughout the supply chain. The easiest and cheapest place to store materials is in outdoor yards,” said Matt Hunsucker, founder of the IOS List newsletter.

Unlike warehouses, IOS yards offer cost-effective solutions for bulky materials that don’t require climate-controlled environments.

For IOS operators, this trend presents an opportunity to expand capacity or reconfigure sites to accommodate denser storage. However, zoning restrictions on stacking heights and site usage could limit growth in some areas.

Lessons Learned

The construction industry has faced tariff-related challenges before. During Trump’s first term, a 25% tariff on Chinese structural steel spurred a wave of stockpiling, creating a high demand for material storage. 

However, current stockpiling efforts remain measured due to lingering doubts about whether the tariffs will materialize.

Basu pointed out that many contractors view the tariffs as a negotiation tactic, which could delay widespread action. Additionally, years of supply chain disruptions have already led to increased inventory levels, reducing the immediate need for more stockpiling.

Implications for Contractors

Contractors preparing for potential tariffs face complex decisions. Supply chain leader Tim Jed of DPR Construction advises accelerating delivery timelines for materials where possible and exploring domestic alternatives to international products. 

For ongoing projects, early material procurement could shield contractors from sudden price hikes. Preconstruction planning is also critical, as contractors must account for potential tariff-related cost increases when providing estimates to clients.

Key Piece of The Puzzle

The evolving tariff landscape highlights the importance of industrial outdoor storage as a logistical asset. Hunsucker emphasized that IOS yards are an integral part of the supply chain, particularly during demand shocks like those experienced during the pandemic.

As the industry braces for potential disruption, those who act quickly to secure storage and supplies may gain a competitive edge.