Steel Prices Affecting the Material Handling Industry

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Steel Tariff on Foreign Importers

The United States has recently implemented a 25% tariff on foreign steel being imported into the country. The implementation of this tariff aims to increase domestic production of steel and create jobs, as well as encourage U.S. companies to purchase steel manufactured within the United States. In the short-term steel prices are rising continuously as steel manufacturers struggle to keep up with the high demand for domestic steel.

What does this mean for our customers?

There are two major impacts to the industry regarding this tariff.  The first is the rising cost of steel that is impacting the price of pallet racking, shelving, mezzanines, conveyors, cranes and most of the items that we sell.  The second impact factor is the availability of steel.  As larger steel brokers are buying up any reserves, it is forcing smaller manufacturers to pay more or wait longer for the supply to be available. 

The short-term effect is that your project may cost more, strictly due to steel fluctuations.  However, the bigger impact that we are seeing is lead time.  As many companies across the country are placing orders to lock-in costs, the lead time from the manufacturers is getting stretched.  These manufacturers are getting flooded with orders maximizing their capacity.  In turn, lead times that may have been around 5 weeks now are close to 9. 

This is a typical occurrence as we move into the end-of-year calendar months and people want to receive the product before the end of the year.  However, we are seeing it in May which lead us to believe that lead times will stay this way or get worse as the year continues. 

The result is that clients are needing to make decisions quicker if they want to minimize the rising cost of steel impacts, freight implications (see our other blog on the freight industry), longer lead times jeopardizing the project carrying beyond the deadline goals. 

A great way to get ahead of inevitable increases in steel prices is to book projects sooner rather than later. It is important to also remember that large projects can be filed under the Section 179 Deduction, which has increased to $1,000,000 for the 2018 tax year (see our other blog on Section 179).

It is impossible to predict the long-term effects of this new tariff. That is why we suggest start putting those material handling projects you’ve been wanting to get done into rotation now.  Let Bode Equipment Company help navigate these variables affecting your project.  We are here to assist you disclosing all critical impact factors influencing your decision. 

If you would like to schedule a site visit or receive a quote, send us an email info@bodeequipment.com, visit our websites www.BodeEquipment.com & www.BodeDockandDoor.com, or Just Call Bode! 800-797-5699.

"I've worked with Bode on numerous projects over the years and I can honestly say they have never told me they couldn't handle a job."
Project Engineer
Coca Cola of New England

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