Piedmont Warehousing & Manufacturing Support: A woman-owned, full-service warehousing and manufacturing support company exceeding expectations since 1975
Two numbers from the same Census release point in opposite directions. Merchant wholesaler inventories hit $944.7 billion at the end of June 2026, up 4.2 percent from a year earlier. The inventories-to-sales ratio fell to 1.19, down from 1.30 in June 2025.
More goods are sitting in warehouses. Relative to what is selling, there are fewer of them. Neither number is wrong. They are measuring different things.
Both facts are true, and the gap between them is where inventory positioning strategy lives.
What a Falling Ratio Actually Means
The ratio answers a simple question. How many months of sales does current stock cover?
At 1.30, a wholesaler held about five and a half weeks of cover. At 1.19, that drops to roughly five. The cushion got thinner even as the dollar value of the pile grew, because sales grew faster. June wholesale sales ran 14.1 percent above the prior year.
Thinner cover raises the cost of a miss. A stockout in a 1.30 environment gets absorbed by the buffer. A stockout at 1.19 turns into a missed ship date, and the recovery runs on expedited freight. The same forecasting error costs more money than it did a year ago.
Production Has Room. Utilization Says So.
The Federal Reserve reported that industrial production ticked up 0.1 percent in June and grew at a 4.0 percent annual rate in the second quarter. Manufacturing output was flat in June but rose at a 4.7 percent annual rate for the quarter.
The more useful number is capacity utilization. Total industry sat at 76.1 percent in June, which is 3.3 percentage points below its long-run average. Manufacturing came in at 75.7 percent.
Plants are not running against a ceiling. Capacity is available across the industrial base. That changes the nature of the problem for anyone sizing a warehouse commitment.
When factories are maxed out, the answer is to hold more inventory, because replacement takes time. When capacity has slack, holding more inventory buys less protection than it used to. The constraint moves downstream, to how fast material reaches the line and the customer.
The Tariff Schedule Has Moved All Year
Trade policy adds a second variable, and it has been unusually active.
The USITC published Revision 16 of the Harmonized Tariff Schedule on August 14, 2026. That is the sixteenth revision to the schedule this calendar year. Rates, exclusions, and product coverage have all shifted more than once.
Penn Wharton Budget Model estimates the average effective tariff rate at 7.1 percent as of June 2026, compared with 2.3 percent in January 2025. The rate varies sharply by category. Steel and aluminum products sat near 40.9 percent, automotive vehicles near 13.2 percent. The share of Canadian and Mexican imports claiming USMCA exemption reached 83.6 percent in June.
Set aside the politics. The operational point is narrow. A landed cost calculated in one quarter may not hold in the next, and a decision to buy ahead is a bet on a schedule that keeps getting revised.
Positioning Beats Quantity
Put the three signals together. Cover is thinner, plant capacity has slack, and duty rates keep moving.
Buying twelve weeks of a component ahead of a rate change is one response. It ties up cash, fills space, and assumes the rate moves the way you expect. Sometimes that is the right call, particularly on a category with a wide spread between rates.
The quieter answer is where the goods sit and how fast they can move once they land. Material staged near an intermodal ramp reaches a plant in hours. The same material in a distant lease reaches it in days. On the I-85 corridor that distinction is measurable, because container volume through the inland port keeps climbing and the drayage leg is short.
That is a positioning question rather than a quantity question, and it is the one most inventory conversations skip.
Three Patterns Worth Knowing
Buy ahead and store centrally. Lowest unit cost on the purchase, highest carrying cost, and the least flexibility if demand shifts.
Hold a base and flex the top. A committed core of fast-moving material in fixed space, with seasonal or tariff-driven volume in variable third-party space. More moving parts, and the cost tracks actual volume.
Stage close and turn fast. Smaller quantities positioned near the inbound node, replenished often. Lowest carrying cost, highest dependence on reliable handling and short lead times.
None of the three is correct in every case. The right pattern depends on how volatile the category is and how much a stockout costs.
What to Measure Before Committing Space
- Weeks of cover by SKU class, rather than a single blended figure across the catalog.
- Effective duty rate by product category, checked against the current HTS revision rather than last year’s landed cost sheet.
- Time from inbound gate to production line, measured in hours.
- The cost of one stockout, including expedited freight and any customer penalty.
- Storage cost per week under the actual billing cycle. Daily accrual and monthly accrual produce different invoices on identical goods, which is where a quote and an invoice tend to diverge.
One last caution. Aggregate inventory data describes the economy. It does not describe a single manufacturer’s risk. A plant running one tariff-exposed component against a thin cover profile has a different problem from one holding a year of a domestically sourced part. The published ratios are a prompt to run your own numbers, not a substitute for them.
Piedmont Warehousing: Inventory Management and 3PL Support in the Upstate
Piedmont Warehousing & Manufacturing Support is a woman-owned, ISO 9001:2015 certified 3PL in Spartanburg, South Carolina, serving the Upstate since 1975. WBENC certified, on the I-85 corridor, with warehousing and light manufacturing under one roof.
Our Services Include:
- Integrated Inventory Management Services — EDI integration, real-time scanning, custom reporting, and 24/7 access, using Piedmont’s system or your own WMS
- 3PL Warehousing Solutions — Receiving, storage, order picking, fulfillment, and cross-docking on the I-85 corridor
Need visibility into where your inventory sits and how fast it moves?
Contact Piedmont Warehousing to talk through SKU profile, turn rate, and space.
About the Author
Ada Wallace is President of Piedmont Storage and Repack, LLC, operating as Piedmont Warehousing & Manufacturing Support in Spartanburg, South Carolina. She brings more than 24 years in the warehousing and manufacturing support industries and leads the second generation of Wallace family ownership of a business founded in 1975. Under her leadership, Piedmont holds ISO 9001:2015 certification and Women’s Business Enterprise (WBE) designation, serving clients across Spartanburg, Greenville, Anderson, Cherokee, Laurens, and Union counties. She can be reached at awallace@piedmontwarehousing.com.
Works Cited
Board of Governors of the Federal Reserve System. “Industrial Production and Capacity Utilization — G.17.” Federal Reserve, 17 July 2026, www.federalreserve.gov/releases/g17/current/default.htm.
Penn Wharton Budget Model. “Effective Tariff Rates and Revenues (Updated August 10, 2026).” University of Pennsylvania, 10 Aug. 2026, budgetmodel.wharton.upenn.edu/p/2026-08-10-effective-tariff-rates-and-revenues-updated-august-10-2026/.
U.S. Census Bureau. “Monthly Wholesale Trade Report: June 2026.” U.S. Department of Commerce, 6 Aug. 2026, www.census.gov/wholesale/current/index.html.
U.S. International Trade Commission. “Harmonized Tariff Information.” USITC, 14 Aug. 2026, www.usitc.gov/harmonized_tariff_information.