3 MIN. READ
In May 2019, there were only 4,568 searches for storage tanks on the industrial markeplace IndustryNet. In May 2020, there were 17,561 searches, a nearly fourfold increase. What is causing the hike in demand for industrial storage?
A Brief Overview
Before identifying the causes of this recent spike, it's necessary to understand the industrial storage tank sector as it usually stands.
Read More: 10 Most Popular Industrial Search Categories on IndustryNet
This sector is relatively small, with only 149 companies nationwide. According to data collected by MNI, the vast majority are located in the South, with 44% based in this region. The Midwest is second most populous with 26%, followed by the West and Northeast in a near tie at 17% and 13% respectively.
The percentage of woman-owned companies in this sector is fourteen times higher than manufacturing in general, with 28% of them fitting this criterion.
Minority-ownership is also higher, with 11% compared to 1% for manufacturing overall. Other statistics are nearly an exact match with manufacturing, including domestic distribution (2% less at 68%), private ownership (1% higher at 92%) and imported raw materials (0% difference at 11%).
COVID-19
Obviously, COVID-19 has had an incredibly intense effect on all businesses worldwide, contributing to the massive increase in industrial storage tank demand.
During the middle of the crisis, the quarantine and shutdown effectively halted all commerce in certain sectors. While the reduction in the rate of infection was beneficial, there were many unintended consequences.
Due to reliance on a global supply chain and a decades-old focus on efficiency versus resilience, many industries were hammered mercilessly.
The deciding factor for most was the definition of “critical infrastructure,” which allowed some industries to continue operations, albeit at a limited capacity.
What was not considered was that many critical industries relied on non-critical industries to survive. Here is an example of this ricochet effect.
Restaurants and Agriculture
The mandatory closing of restaurants meant that food demand was sharply reduced. Since farmers had already grown crops that were expected to be consumed, there was a need to store whatever they could or risk losing that harvest.
In the end, not all agricultural products were able to be saved. Foods such as eggs and milk had to be dumped, even as supermarket shelves became bare. However, dry bulk foods like grain, potatoes and wheat were able to be stored for use at later dates. The excess volume required expanding storage facilities, thus prompting an increase in demand for storage tanks and silos.
No Demand for Oil
In another example, oil exploration companies were caught off-guard by the immediate cessation of every type of travel. After reaching record levels of production, demand fell 25% overnight.
A storage crisis ensued as a backlog built up, not just from the low demand, but from the need to keep wells operating to avoid problems within the reservoir.
Some oil was held on supertankers that anchored for weeks while a substantial amount was stored in industrial oil tanks.
Companies have expanded their tank networks in the hopes that they will have enough room to store their oil until demand picks up again.
Conclusion
The interconnectivity of our economy is a strength and a weakness. Building more resilience into our supply chains means having stockpiles and inventory on hand for emergencies and unexpected situations.
Industrial storage tanks can easily fulfill this purpose, giving various industries room to store their products in the event of a sudden drop in demand.
Likewise, they offer the capacity to deal with random spikes that normally would result in product shortages.
Industrial Storage Tanks Resources
Those seeking a reliable source of storage tanks or can search, source and quote for free among 400,000 U.S. manufacturers and suppliers of more than 10,000 products and services on IndustryNet. IndustryNet is also a powerful platform for suppliers to stand out to potential buyers.
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