Global Fastener News reported this week that Fastenal intends to develop an abandoned industrial site in Indianapolis, Indiana and start producing fasteners that they currently import from Thailand. I know they manufacture parts in Winona near their headquarters and they also own Holo-Krome so this is another interesting development from one of the industry’s more powerful distribution companies. It is always nice to see more product being made domestically and the Fastenal people are smart, so it must make financial sense for them to do this. I will be interested to hear what kinds of parts they intend to make at this new facility.
At this particular moment in time, I’m guessing that Fastenal wishes they already had this plant up and producing. I just read an article, dated February 5, that quoted the Pacific Maritime Association President, James McKenna, as saying the “union-led work slowdowns could shut down the 29 U.S. West Coast ports in five to 10 days”. If you are not feeling the impact of this development yet, keep close tabs on how this is affecting the material flow from your suppliers of import products. If you directly import yourself, you already are feeling the affects. Domestic manufacturers should have a unique opportunity to run fill in orders during this period. Distributors need to get out that list of cold headers and other manufacturers and keep them handy in case of emergencies.
Speaking of domestic manufacturers, I just had the opportunity to tour The Auto Bolt factory in Cleveland, Ohio. It was a terrific tour and I have posted a few pictures on the Photo section of this site. Thank you to the North Coast Fastener Association for setting up this tour. On the topic of fastener associations, I recently got a copy of the current Fastener World magazine, and the Pac-West organization had a news release about their upcoming Spring Conference. I found this interesting for a number of reasons. First, it was the only U.S. based regional fastener organization with a news release in the entire 565 page magazine, so give credit to Vickie Lester for getting that advertisement out there. Secondly, the overall coverage of the U.S. market is kind of a hodgepodge of articles and news snippets. One specific article was a report that Fastenal was moving its branch location in Sydney, Ohio to a 40% larger facility. Hmm, interesting, but not quite the news breaker that they plan to soon be manufacturing in Indianapolis. It just seemed like kind of a small news item to be reported on in the international fastener magazine. Fastener World is a 565 page magazine filled with colorful ads and every kind of fastener imaginable. It is interesting to get the Fastener World perspective on the world market and the Asian market in particular. If anyone from Fastener World reads this site, I enjoy your magazine and glad I get my copy. Also, if you would like a contribution from the U.S. side of the fastener business from a slightly unconventional source, just give me the word and I’m there for you!
I assume it will be some time before they get caught up!
Regarding the ports: as I was driving down Pacific Coast Highway yesterday I could still see countless ships waiting to get into the ports and offload.
Thanks for the props! Sometimes PR isn’t rocket science. Fastener World is on my distribution list for press releases and I was lucky they picked it up!
TS – great post! Here’s my 2 cents on the Fastenal (FNL) announcement. Industrial Distribution quotes Indianapolis Business Journal as follows: “Fastenal would like to use the building to manufacture custom orders, replacement parts and fasteners that are now being made in Thailand.” My take on this is FNL will primarily make short runs of non-standard and special fasteners with this operation. FNL has proven with their other domestic manufacturing locations that they can increase profitability by doing small runs in-house. This is more of the same. And to my esteemed colleague, John Butler’s point, as an employee of an Asian factory I can tell you we are not concerned by this in the least. Volume standard parts will continue to be manufactured in Asia throughout my career. If I’m wrong I owe you (JB) a pair of juicy Packer tickets.
RDC
Just an interesting development in an ever changing fastener landscape. Normally, the changes I mention seem to be about consolidations so this was just a little bit of an anomaly. Regarding standard volume parts – do you see more small and medium sized distributors going overseas themselves as the landscape changes?
TS, Many will try on a few line items where their volume makes sense. Current port issues aside — overseas freight costs are a mega hurdle for small and medium size distributors. I don’t think the master importers will be challenged much.
Thanks for the information Rurh and I won’t bet against you!
Thought provoking post TS. I would venture a guess Fastenal will either produce small screws or low carbon hex caps. I would also assume they would have their own heat treat and plating processes for self sufficiency. I doubt they will stop there, they could easily add nuts to their manufacturing facilities. Can you imagine what the current suppliers are thinking right about now. It won’t be long before future orders from Fastenal start slowing down and Asain manufacturers scramble to find other buyers for their products. I wonder how this will affect margins for all Distributors. Hopefully Fastenal takes the extra profit instead of lowering down the sell prices.