The unpredictability of the current economic landscape, from inflation and interest rates to tariffs and trade volatility, is a cause for concern for the construction industry. While inflation is showing signs of cooling, reaching its lowest level in April since early 2021, the impact from tariffs could trigger inflation later in the year, translating to higher prices for building supplies, such as steel and lumber.
In addition, within the coming months, it is expected the U.S. will see the effects tariffs will have in the form of lower imports—for example, lumber, stone, concrete and metal may not be arriving on U.S. shores in customary volumes. Since these materials are critical to construction, lower product volumes, coupled with the higher prices of domestically sourced products, stand to have an impact on overall sales in the sector.
In fact, according to a recent survey by Associated Builders and Contractors, nearly 22% of contractors had a project delayed or canceled in April due to tariffs, up from 18% in March, with 87% receiving notification of tariff-driven price increases for materials. While builders and contractors remain upbeat about their near-term outlook, 19% of respondents expect their sales to decline over the next six months, up from 13% at the start of the year.
DIGITAL TRANSFORMATION PROTECTS MARGINS
As tariffs and economic uncertainty push material and labor costs higher, building supply distributors are reevaluating every part of their operations in search of efficiency and cost-saving opportunities, including how materials are delivered to the jobsite. Notably, the last-mile journey is no longer singularly about on-time delivery—jobsite theft, missing materials and delivery disputes are piling on extra costs and damaging customer relationships at a time when margins are already razor thin.
To protect profits, building supply distributors are turning to digital tools and technology, transforming how they interact with customers for materials ordering and delivery. Consider a contractor ordering supplies to install a roof who inadvertently omits a required component and requires a second delivery. In contrast, guided ordering, via a combination of custom mobile apps and contractor enterprise resource planning systems, ensures all necessary supplies are ordered, saving time and delivery costs and keeping project timelines intact.
Building supply distributors are also adopting delivery management technology that automatically routes and tracks deliveries in real time, provides guided workflows and communicates order details across the last mile. This digital approach results in routes that are lower cost, more efficient and higher density (i.e., more stops per route), while providing a differentiated customer experience.
For instance, Richards Building Supply enhanced delivery performance, increased distribution capacity and trimmed last-mile costs by automating and optimizing delivery route planning and proof-of-delivery using a route planning, execution and mobile solution.
“With real-time visibility from GPS-tracked vehicles and digital proof of delivery, we’ve significantly improved our logistics operations,” says Jenny Vetter, logistics manager at RBS. “This technology allows us to create more accurate delivery schedules, increase daily delivery volumes and better align delivery windows with customer expectations.”
Driver safety is also a serious priority for distributors like RBS. Equipped with telematics devices, forward- and rear-facing dash cams in its vehicles, and mobile devices for drivers, RBS enhances driver safety through real-time visibility, automated driver-vehicle inspection reports and the ability for drivers to engage with safety training videos on their mobile devices.
MINIMIZING DISPUTES BUILDS TRUST
Building supply distributors face unique delivery challenges, from short lead times, tight delivery windows and varying loading/unloading times to bulky deliveries (e.g., prefabricated structural components, modular buildings), different types of vehicles (e.g., boom trucks, vans, dump trucks) and specialized loading and offloading requirements (e.g., cranes, telescopic handlers, forklifts).
These unique factors not only complicate chain-of-custody management and on-time delivery performance—disrupting project workflows and delaying progress—but they also elevate the risk of damaged or incorrect materials arriving at the site, triggering increased disputes and costly claims, especially for distributors relying on paper-based proof of delivery.
Unfortunately, proving that a delivery occurred as planned while following safety procedures and ensuring no damage occurred to either the goods or the jobsite is difficult without photo documentation. But asking drivers to take pictures on their personal phones and forward them to multiple recipients is an inefficient and risky practice.
Instead, forward-thinking distributors are minimizing fraud and theft by using mobile applications to guide drivers’ workflows, including automatically prompting them to take the required photos of the jobsite, equipment set-up, product delivery location and condition of materials. Vetter emphasizes, “Technology has helped us not only optimize logistics, but it’s also helped us fortify defenses against jobsite theft—safeguarding our deliveries and our customers’ trust.”
TAKING CONTROL OF THE LAST MILE
While leading distributors may be better positioned to pivot and offer more value-added services to their contractors—job quoting, automated ordering, inventory management (on and off the jobsite), just-in-time delivery—to justify higher prices and encourage customer loyalty, companies of all sizes should evaluate their last mile processes for opportunities to increase efficiency, trim costs and strengthen customer relationships.
Many are finding last-mile optimization software is indispensable in the face of shifting trade policies, the ongoing shortage of commercial driver’s license drivers and shrinking margins. Indeed, with a route-planning, execution and mobile solution driving last-mile operations, building materials suppliers are able to drive greater route density and improve on-time delivery performance, while increasing vehicle capacity by ensuring trucks are loaded with the maximum product according to vehicle type and size.
In addition, by leveraging technology that helps reduce costly disputes and claims, building supply distributors can enhance the customer experience while freeing up the human resources to perform higher-value work and provide other value-add services—critical steps in safeguarding margins and minimizing churn in today’s uncertain economic climate.
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