What Are Supply Chain Issues In China Doing To The Fastener Industry?

Supply chain issues in China are affecting a number of industries—especially fasteners. Why? Lots of companies need them.

Fasteners are among the most widely used basic materials in many industries. They have numerous applications in several sectors of the US national economy, from machinery, equipment, ships, and railways to chemicals and railways. Most of the standard commodity fasteners in the US are sourced from manufacturing facilities in China. 

Today, the industry faces ongoing supply chain disruptions triggered by the COVID-19 pandemic, which is causing long-lasting port congestion, disruptions at Chinese plants, high demand, and longer lead times. 

So, let’s take a look at the effects of what’s happening in China, the supply chain issues it’s causing, and what it’s all doing to the fastener supply industry in the United States.

What is causing the supply chain issues?

The following are some of the causes of supply chain issues in the fastener industry:

• Congestion at the port: The US maritime ports and terminals such as Long Beach and Los Angeles handle over 80% of all internationally traded goods. The COVID-19 pandemic triggered disruptions at the ports, leading to the stockpiling of containers and a scarcity of chassis because the containers sit on them. The port congestion has, in turn, caused the entire system to slow down, leading to significant delays in the supply chain.
• Disruptions in the Chinese plants: At the start of the pandemic, Chinese plants reduced the number of workers and working shifts. There was also an acute shortage of workers due to illnesses, leading to disruptions in production lines. Today new variants and outbreaks of COVID-19 are slowing production again.
• High demand: Currently, there is a massive demand for fasteners owing to the effects of the COVID-19 pandemic. Even as the Chinese manufacturing plants reopen, the rapidly growing demand has overtaken supply, leading to further supply chain disruptions in the US and elsewhere.

Effects of supply chain issues in China

The following are some of the effects the supply chain issues in China are having on the US fastener industry:

• Revenue loss: Poor performance caused by disruptions results in lost revenue or customers. For many retailers in the fastener industry, missing critical fastener orders has resulted in stockouts and lost revenue, as well as lost customer trust. These losses are more likely to be acute for SMEs because they typically have fewer resources to absorb supply chain inefficiencies.
• Higher prices: Supply chain disruptions create shortages and higher prices for all commercial products, including fasteners. This, in turn, increases the cost of living, especially for vulnerable populations.
• Compromised business reputation: When a business has challenges fulfilling customer orders, its reputation is at risk of being damaged. Late or failed deliveries erode customer trust while decreasing customer retention rate. It also drastically decreases customer lifetime value. The widespread nature of the fastener delivery delays has greatly impacted the reputation of businesses dealing in the commodity.
• Increased operational costs: Operating and production costs increase when a business faces acute supply chain issues. In the US fastener industry, this problem is majorly attributed to transport and distribution costs, which have increased exponentially during the past few years. The increase in production costs has forced many businesses into additional debt, with others closing down their operations.

Contact Big Bolt for all of your fastener needs

Supply chain disruption affects each company differently. While the impact of global supply chain issues on the fastener industry can be unavoidable, each business has an individual responsibility to create resilience in its supply chain strategy. It is essential to take proactive steps to spot potential risks to your supply chain and mitigate them. 

Your mitigation efforts should include partnering with a reliable supply of fasteners like Big Bolt. Big Bolt manufactures and sells high-quality fasteners and has built a reputation for fast turnaround times.  

Big Bolt manufactures and sells high-quality fasteners and has built a reputation for fast turnaround times.  Big Bolt carries a large array of bar and blank stock to ensure their customers receive their products in the shortest amount of time.

Big Bolt carries a large array of bar and blank stock to ensure their customers receive their products in the shortest amount of time. Never sacrifice quality when it comes to fasteners. Big Bolt thrives on making quality fasteners quickly, so you'll never have to worry about supply chain issues. Contact us today to get a quote.