A hearty and sincere welcome to everyone to the Hardware Everywhere fastener blog. Primarily, we are going to talk about fasteners in this blog: except for this series of posts in which we’re going to talk about the ongoing lack of fasteners.
All industries, including fastener distributors, have been hit hard by the supply chain crisis, some worse than others. As the result of the pandemic – the world’s most convenient scapegoat – many companies around the world reduced inventory levels drastically, including Hardware Everywhere (we accept responsibility for our part), because nobody knew what to expect. When demand picked back up, everyone was caught short: supplies and distributors alike. Worse, many of the factories that closed due to the pandemic, never re-opened. Suddenly the supply side was much smaller.
Know Your Fastener Supplier
Before I get into what caused it, let’s talk about working with your fastener supplier. First, online fastener distributors are very similar to their offline counterparts. Your three primary concerns should be a fair price, the ability to meet your needs (service), and integrity. All online fastener distributors use their vendors’ warehouses. You place an order, they send the paperwork to their vendor, and that vendor ships it to you. We do that for some orders too.
However, most online fastener distributors do not own their own warehouse which means they are at the mercy of whatever that vendor has in stock. Hardware Everywhere has its own 50,000 square foot warehouse in South Florida that is full of inventory we have purchased from various vendors all over the world. That means we can control our product far better than most of our competitors. Here's something you can try: ask your online fastener distributor a picture of their warehouse and you may discover how few of them actually have one. You can see a picture of ours to the right.
The Nature of the Fastener Industry
It’s crazy out there. Our vendors are all out of product, their prices are through the roof, and deliveries are extended. One of our vendors insists that customers won’t be asking “how much” but only whether or not we can get it. This has proven to be true. Customers decide to shop around and when they come back, the product is gone, or the price has gone up even more. Hardware Everywhere is uniquely positioned to get material when others can’t because we have long-standing relationships with both our vendors and customers and are able to work with them to weather this latest storm.
The whole supply chain from manufacturers down to end users is in a panic, but there’s no need for it. This isn’t the first time this has happened, nor will it be the last – the fastener industry has always been cyclical. Our long-term employees and customers all remember the last time this happened was due to the longshoreman’s strike (2007) when containers weren’t allowed to dock in the United States. Now in 2021/2022 there’s no room at the ports, and incoming containers are being sent to wait at sea, often for a month or more! Just like last time. This isn’t new. Don’t panic: adapt. As Sir Winston Churchill said, “Keep calm, and carry on.” We could, in theory, sell anything we can get at whatever price we want, but we don’t because we don’t take advantage of our customers because that’s not who we are.
Shanghai Port: A 6 mile backup in the rush to get stuff on a boat before a previous strike.
Because of Covid-19, nobody ordered stock as the economy cratered. As things ease up a bit and the economy attempts to recover, companies are trying to restock empty shelves, creating an artificially high demand. This is coupled with a quadrupling (400%!) increase in container costs at minimum.
Customers who don’t plan far ahead and fail to keep ample stock in their warehouse, will find it very, very difficult to continue business as usual. While we have access to domestic suppliers on many products, customers will have a challenge accepting the cost differential and extended lead times, yet when it comes to shutting down production, they may have to make some hard choices. Deliveries on many new orders are being quoted out as long as a year or more!
With most of our competitors, it’s not a pricing issue at all. They just can’t supply you because they don’t have 50,000 square feet of warehouse like we do. We’re in a topsy-turvy market where the question isn’t “What is the price?” but rather “Can you get it?” and our answer to the second question is a resounding “yes.” Sadly, when it comes to name-brand products we are all at the mercy of the company that owns the brand. Not every company saw this mess coming (Why not? We saw it!) and shame on them for not doing what it took to catch up. Now, it’s far too late. How did we get here? The whole concept of supply chain is tied up in history.
Keep an eye out for the next post in this three-part series to gain further insight into the state of today's fastener industry.