Association

Interview with

NFDA President
Jim Degnan

With inventory, freight cost, and inf lation
continuing to impact the global supply chain
since 2022 (and the U.S. industry is no exception), do you
think the pressures on the U.S. fastener industry due tothese issues have eased this year, and are there any new
emerging issues that are worth paying attention to?
A: While freight costs and lead times have improved,
inflation continues to have a large impact on our industry.
Many production costs including labor and inventory carrying
costs have increased. The availability of qualified labor is alsoa frequent topic of conversation. Recruiting, training, andretaining employees is more critical now than ever.
(Following Q1) Which of these issues do you
consider to be the highest priority for the U.S.
fastener industry to deal with at this stage? Why?
A: I believe that the highest short-term priority will be
managing costs as inflation continues to impact many
product classes and industries. Even with the efforts of theUS government to slow it down through increased interest
rates, inflation continues to affect all aspects of our industry.
Also, any significant economic downturn will just increase
the complexity of managing changing costs. However, skilledlabor availability will be the larger, longer-term issue thatcompanies must be addressing now.

206

Fastener World no.203/2023 惠達雜誌T he prac t ice s adopt e d by U. S . fa st ener
distributors in response to changes in market
supply & demand and industrial upgrading have always
been a model for their counterparts in other countries tolearn from. In the face of these old and new challenges in
the market that we are all closely concerned about, how
do the U.S. distributors, who stand on the front line as thegatekeepers for their customers, cope with and overcome
them? Do you have any practical examples to share?
A: The volatility of the fastener market over the last several
years has motivated US distributors to expand investment
in data analytics, standardization, supply chain visibility,and system technologies to help with these new market
dynamics. But none of that will have a material impact
without encouraging your employees to empathize withyour customers, clearly understand their requirements, andempowering them to solve problems directly. Our industry
employs some of the best and brightest folks. They are the key
to our success.
Under the framework of the new U.S.-MexicoCanada Trade Agreement (USMCA) andwith the advantage of preferential tariffs and geographic
location, it is reported that some U.S. fastener companies
are also investing in Mexico to set up their factories. Do you
think that this trend will cause some subtle changes to theexisting U.S. fastener distribution system?

AssociationA: We have all heard the quote: “The only constant in life ischange”. And that applies to the US fastener distribution industry
more than most. Our industry has always worked effectively
through the perpetual changes in our marketplace. Our world isdynamic, and we must move with it or deal with consequences.
The trend of U.S. fastener companies investing in Mexico toset up factories under the USMCA framework is indeed a topicof considerable interest. With labor shortages in the U.S., theproximity of Mexico and their strong labor force is an attractive
destination. While automotive and electronic manufacturing
have long been established in Mexico, we're now witnessing
many other manufacturing segments exploring this option.
Our industry has years of experience serving the companies
already in Mexico, and in many other countries.
According to the latest U.S. Customs statistics,
the U. S. imported about US$3. 8 billion offasteners in the first 7 months of 2023, with the top 3 importorigins being Taiwan, China and Japan. As far as you know,what are the main applications for the fasteners the U.S.
imported from these three countries? And, what advantages
do fasteners from these three countries respectively present toU.S. fastener distributors? Are there any new trends in fastener
manufacturing and development in the U.S.?
A: Fastener imports from Taiwan, China and Japan areused across a very wide range of applications in industries
including construction, automotive, consumer electronics,
and machinery manufacturing to name just a few. The appealof these fasteners is primarily their cost. Many commodity
fasteners can only be purchased in volume from overseas
manufacturers. There are also many US fastener manufacturers
who have opened manufacturing locations in Asia to expand theirproduction capacity and to serve the local markets.
In the first 7 months of this year, more than 35%of U.S. fastener imports (about 320,000 tons) camefrom Taiwan, a much higher percentage than China and Japan,
showing that Taiwan and the U.S. fastener industry have been
cooperating extraordinarily closely. What do you think are thereasons that the supply chain between Taiwan and the U.S. hasremained close over the years?
A: The close collaboration between Taiwan and the U.S.
fastener industry is rooted in longstanding relationships built onquality, pricing, reliability, and consistent delivery performance.
These foundational pillars have been nurtured over time, resulting
in robust and enduring supply chain partnerships. While the U.S.
fastener industry is always exploring opportunities to expand its
vendor base, Taiwan's reputation for excellence and dependability
has made it a preferred partner for U.S. distributors. As we explore
global options, other countries like Malaysia, India, and Turkey
offer unique strengths for various product lines, providing
diversification opportunities within the supply chain.

manufacturers in Taiwan, China, and many other Asian
countries have begun to actively introduce the concept of "energy
saving and carbon reduction" in all aspects to strengthen
their competitiveness. Will low carbon fasteners also become arequirement for upstream suppliers of U.S. fastener distributors
in the near future?
A: With the upcoming trial implementation of the EU's CBAM
measures, many fastener manufacturers in Asia, including
Taiwan and China, are proactively embracing "energy-saving andcarbon-reduction" principles to enhance their competitiveness.
The adoption of low-carbon fasteners may indeed become afuture requirement for upstream suppliers of U.S. fastener
distributors. We have witnessed similar trends with the trickledown effect of various industry initiatives. As we await thefinalization and potential modifications of CBAM requirementsin the coming weeks and months, it is possible that carbon
reduction measures will be integrated into the broader spectrumof our industry practices in the U.S.

As the new president of NFDA, have you set a few
goals to achieve during your term?
A: The N F DA board has established several strategic
objectives, mostly around the improvement of membershipvalue. Our objectives cover a range of topics including employee
development, recruiting, training, mentoring, and effective
networking practices. We are always committed to helping ourmembers thrive in a global marketplace.

What NFDA events have been planned for theupcoming year? Will there be any exchange eventwith other national fastener associations or industries?
A: We have several events scheduled for the upcoming year
including:
1. NFDA Virtual Program – November 30, 20232. 2023 YFP and NFDA Virtual Holiday Party – December
14, 2023
3. 2024 NFDA Annual Meeting and ESPS – June 12, 2024
4. 2024 NFDA Executive Summit in San Diego, CA –October 16-18, 2024

What are your expectations for the U.S. fastenerindustry in 2024?
A: T he US fastener i ndust r y wi ll have some g row t hchallenges in 2024 given the uncertainty of the economy, but
US fastener distributors will continue to grow as more of themarket recognizes the competitive advantages of working with astrong distribution partner to assist them with the ever-changing
dynamics of a global supply chain.

With the trial implementation of the EU's CBAM
measures from October 1 this year, fastener
Copyright owned by Fastener World惠達雜誌 Fastener World no.203/2023

207