Guide to High-Performance Coatings

A Guide to High-Performance Coatings

Much of the innovation in the fastener industry is focused on coatings for steel to prevent rust and corrosion. New technologies have led to coatings with high corrosion resistance, low friction, and even germ-killing capabilities. Coatings like these can enhance the longevity of steel components in critical applications.

What is a Salt Spray Test?

When you hear companies discuss protection measured in Hours of Salt Spray testing, they are referring to a popular and easy test to determine how much protection from rust a coating provides. The test uses a mist of water and salt (typically 5%) to determine how many hours it takes for “red rust” to form on a surface. Common coatings like Zinc Plating, also know as electro-galvanizing, provide 20-40 Hours of protection depending on the thickness of the plating.  The most common test is standardized by ASTM B117 requirements, although there are other standards and variations on the test for specific applications. The most accurate tests of a coating`s performance cycle between wet and dry cycles to resemble a real-world environment.

Why Zinc?

Zinc is often used as a component of corrosion-resistant coatings because it acts as a sacrificial metal, protecting the steel or other material underneath. When exposed to the elements, zinc provides protection on two levels: the zinc coatings create a separating layer between the steel and the environment, and zinc corrodes before the base metal. Even if the barrier of zinc is damaged or chipped, the underlying steel will be protected by the zinc near the area of damage. Zinc plating provides better protection than equivalent thickness plating of other metals like Nickel or Brass, as well as being a natural lubricant requiring less torque to drive.

Galvanized Steel

In the past, if high corrosion resistance was needed on a steel part, Hot-Dipped Galvanization was the answer. By dipping a steel part into a bath of hot zinc, a thick protective layer is added that can provide up to 1000 hours of protection in a salt spray test. Protection depends on how thick the coating is, and in the case of a bolt or nut the parts may need to be tapped oversized to mate properly. Microstructures of Zinc Coatings

Conversion Coatings

Popular finishes like Black Oxide and Black Phosphate are conversion coatings, not a plating. These coatings are extremely thin layers on the outside of a part that are created by a chemical reaction on the surface. This reaction leaves a thin coating that can provide some corrosion resistance (low levels of protection) and change the color of an item. These types of coatings are often used in the automotive industry and tools.

Powder Coatings

Hardware that needs a hard and durable surface can sometimes use a powder coating as a finish. A fine dust of plastic powder is applied electrostatically to an item, then baked with heat or UV light to cure and fuse the polymer together to form a strong coating on the outside. Powder coating is much more durable than paint, but much more costly as well. Powder coating is also more difficult to color match than paint, making it less suitable for some applications. Generally, powder coating can provide 200-1000 hours of corrosion resistance in a salt spray test.

Dacrotized Coatings

A few decades ago, ceramic coatings with high corrosion resistance were introduced to the market. One of the first and most popular were Dacrotized coatings that could provide up to 1000 Hours of salt spray protection. Dacrotization is the process of applying a film of zinc or aluminum flakes and binding chemicals to an item, then baking the item in a kiln to cure and adhere the coating to the metal. Dacrotization does not risk hydrogen embrittlement and can be died to many different colors. Contrary to popular belief, Dacrotized coatings are not the best option for deck screws when used in pressure treated wood (with ACQ).

Ruspert™, MAGNI, and Composite Coatings

New developments in ceramics, chemistry and composites have created a new breed of coatings that can surpass 2000+ hours of salt spray protection. Many of these coatings include layers of zinc or aluminum flakes, ceramics and chemical conversion films that are tailored to specific applications. Some coatings target lubrication and driving torque, while other focus on high-heat, corrosion resistance or application methods. Hundreds of these coatings are branded and trademarked names as companies try to establish reputations for their coatings. Generally, these types of coatings are more expensive than electroplating, galvanization, phosphates, and oxides, but provide much better corrosion resistance.

Pressure Treated Wood & ACQ Coatings

Wood used for outdoor environments like decks or pilings are often pressure treated to prevent rot, and the chemicals used to treat the wood are highly corrosive. Since 2004 in the US, all pressure-treated wood offered to the public has used ACQ over previous chemicals that were polluting to the environment and included arsenic. ACQ is much more corrosive than previous chemicals used to treat wood, and special coatings must be applied to hardware to be sure the fasteners wont rust and the structure does not fail. If you are working with treated lumber, be sure to use an ACQ Compatible coating.

Antimicrobial and Antibacterial Coatings

Advancements in the anti-microbial properties of silver have led to a wide range of additives that can be added into a coating, paint, or plastic to make the surface resistant to germs. Especially with the COVID pandemic, this has been an area of interest for many manufacturers of consumer goods. Additives are typically mixed and applied during production of the part, with a curing process that make it difficult for bacteria and viruses to linger on the surface of the part.

Posted by Eric Brickman

December 2021 Market Update

2021 started with optimism and hope that we were finally turning a corner after COVID changed the world in 2020. This year has thrown more curve-balls into supply chains than anyone could have anticipated, and it is clear that the path to full recovery will be winding and complicated. With a focus on immediate emergencies, it can be difficult to find the time to keep up with recent developments. We have compiled the top concerns that our customers and partners are discussing, with added research to keep you up to date on the latest trends impacting supply chains.

Ocean freight is still a massive bottleneck, with waiting container ships just idling farther off US coasts.

Congestion at the largest US port of LA/Long Beach has increased even as aging containers waiting to be picked up by importers has decreased with the threat of daily storage fines. In past months the ports had noted aging containers that were offloaded but not picked up as a significant cause of delays, and the threat of fines has now pushed importers to pick up their containers. Even so, there are currently 96 ships waiting of LA/LB with 31 at berth in the port. Much of the recent news commentary has been around finally turning a corner at ports as congestion eases, but the facts are that the backlog of waiting ships has not decreased and port congestion in the US causes downstream effects for future sailings, making the issue slow to solve. Gene Seroka, Director of LA/Long Beach recently stated that, “Since we instituted a penalty for long-aging containers, the number of ships at anchor has decreased by more than 40% over a four-week period.” In our research, this analysis is misleading.

The reason port directors and politicians can say that congestion is easing is due to how “vessels at anchor” is typically calculated. The traditional calculation looks at any ships idling or anchored within 40 miles of a port to determine which are waiting to dock. US ports have a Safety and Air Quality Area (SAQA) 150 miles West and 50 miles North/South of the ports, and ships are now encouraged to wait for berths outside of this SAQA. This is coupled with a new system of allowing ships to reserve space at ports based on a “calculated time of arrival” rather than the previous system of first-come first-served. The effect is that many waiting cargo ships are in queues far off US shores based on their calculated time of arrival, but are still in line for a spot at the port. Rather than wait directly offshore to save their spot in line, ships can reserve space based on their CTA and wait further offshore. In our personal experience as an importer, the last month has brought more delays in-transit to the ports of NJ/NY by about 5-10 days, with premium market-rates for containers decreasing ~10-20% since this time last month.

In our assessment, the new policies do more to score political points than reduce congestion or increase throughput at ports, though they could prevent accidents at sea by spacing ships further apart.

Note the extreme right-hand side of the graph, the recent policies that just started in November reduced ships waiting within 40 miles of the port, but total ships waiting to dock has increased.

A new COVID Variant of Concern is troubling financial markets and offers the possibility of continued supply chain woes, depending on how countries respond.

For those of us who are tired of hearing the word “COVID”, the news about the Omicron Variant in late November was disappointing. The Omicron Variant of COVID has world leaders and scientists concerned for the global recovery, although there is still much to learn about the new variant. We do know that Omicron has the highest number of mutations that we have seen, and many of these mutations occur on the spike protein
 that lets the virus infect humans. In our November Update we noted that supply chains already stretched to their limit are susceptible to further disruption, and that this disruption could have outsized impacts. The response to this new variant could be such a disruption.

The graph above shows the high number of mutations on the spike protein compared to other variants

Why the concern about Omicron?

While Omicron is the 5th Variant of Concern since 2019, it has the most mutations of any variant so far and over 30 of these mutations affect the spoke protein that allows the virus to bind with human cells. Some of these mutations have effects which are understood to increase transmissibility and may reduce immune response; others have not been seen before, and the concern is that these new mutations could make vaccines less effective. First reported out of South Africa, Omicron likely originated in Europe and has so far been reported in at least 38 countries worldwide. Reports from South Africa show the Omicron Variant spreading twice as fast as Delta had, which could be devastating for health systems in countries with low vaccination rates. The good news is that so far Omicron appears to cause mild symptoms and vaccines are expected to reduce hospitalization in infected patients.

What is the risk for Supply Chains?

The risks for supply chains now mainly depend on countries` responses to this new variant, especially China. While other countries like Australia and New Zealand stepped back from their Zero-COVID policies, China still follows this strategy which in the past has caused entire cities to shut after just one positive case. Other countries are limiting cross-border travel and may impose lockdowns if infection rates rise. Another possibility is that another spike in cases could reduce consumer expenditure on dining, entertainment and travel and keep levels of consumer spending on physical goods elevated. This would make it more difficult to reduce bottlenecks and inflation.

Until we have more information on the effects of the new Omicron variant, the best course of action is not to panic but to follow new developments closely.

Power shortages in China are easing as the government has adjusted its policies on emission reductions.

Electricity shortages in China have eased a bit since the crisis peaked in September as the government allowed more mining of coal to supply powerplants. There is still electricity rationing in place, but the disruptive effect on supply chains has been diminishing.

What caused the energy crisis? Chinese emission targets for a green energy transition have reduced the production of coal in China, which forced prices higher. The government strictly controls electricity prices in China to keep them artificially low, and this means that coal burning power plants had two choices – continue production and operate at a loss or reduce output of electricity. At a time when global demand is rising for durable goods which China produces, this has caused a mismatch of incentives. In the past month the government has increased coal production and relaxed its emissions requirements after their previous policies caused widespread outages in September and October.

Labor shortages across the US are adding to higher prices and delays, with ports, truckers and warehouses struggling to attract and retain workers.

Labor shortages are still causing delays and raising costs with companies struggling to attract dock workers and truck drivers – the American Trucking Association estimates 80,000 more drivers are needed to meet demand. The US labor force is almost 5 million workers smaller than it was pre-pandemic, and the rate that workers are returning to the workforce is slowing in recent months. Many of the lost workers are from the leisure and hospitality industries, and while warehousing and transportation gained 50,000 jobs last month (~23% of the total) there is much more demand for workers. In addition to adding to the delays, the rise in wages offered to attract new workers is helping to push costs (and inflation) higher.

With the increased demand for their services, many US workers have been pushing for better working conditions and pay. In July of 2022 the negotiations between ports and the International Longshore and Warehouse Union will begin, and with additional bargaining power many are expecting the negotiations to be tense. The last time an agreement was reached in 2015, labor disruptions impacted port operations for months with productivity slowed by about 50%. The President of the ILWU recommended on a podcast that dockworkers save money heading into next year`s talks, stating, “There may be a battle in 2022… Be prepared.” Hopefully port congestion eases by July, but we will be keeping an eye on the news leading up to the negotiations.

The graph above shows the slowing growth of the labor force since August 2021

The Federal Reserve noted that inflation is lasting longer than they had expected, and will take action to fight inflation.

Since early 2021 the Federal Reserve, who is responsible for keeping unemployment and inflation low, has held the stance that inflation was “transitory” as the economy reopened from a once in a century pandemic. After 10 months of higher inflation with no end in sight, questions have been raised on how long “transitory” inflation may last. Last week the FED Chairman Jerome Powell testified to congress that, “the risks of higher inflation have moved up.” It is expected that the federal reserve will reduce bond-buying programs that were intended to boost the economy and raise interest rates sooner than previously expected to shift focus to fighting inflation.

All the issues in this update (high freight costs, Omicron, rising input costs for factories, labor shortages) lead to increased costs for businesses, some of which are passed on to consumers. With additional government spending on the horizon and a push toward a green energy transition, demand for industrial products and durable goods is likely to remain high in the coming years, leaving little time for supply chains to catch up.

Actual inflation now is almost 3 times as high as before the pandemic, and is expected to remain elevated for some time. August 2021 is the last month the Federal Reserve has released CPI data for.

Regarding fasteners, even extremely common items are still stocked out domestically. Companies needing immediate inventory replenishment may need to use substitute items.

Since April/May 2021 domestic stock levels of fasteners have been falling dramatically. Companies that realized they were low on fastener inventory began scrambling to buy any material they can find, leaving many top factories out of stock for months. Whereas there are normally many suppliers with available material many are now completely stocked out. Some common parts are out of stock across the country, forcing companies to use substitute items. The market has shifted to favor those who are able to plan and forecast. The situation is so tight that we regularly have calls now from our competitors looking for parts. Domestic manufacturers still have lead times extending 12-20 Weeks.

The most important takeaway is that companies that wait until the last minute to acquire parts are paying much more for immediately available material and will likely need to use substitute items. Planning your usage ahead of time is absolutely necessary with domestic stock levels so low.

We are entering 2022 with several challenges to supply chains, but the outlook is brighter.

Speaking with our customers and partners, the most common question is when things will return to normal. 2021 was more volatile than many had expected – As we entered the second year of a global pandemic new challenges arose that were not foreseen in 2020. (Think of port bottlenecks and inflation risks) Even with the various and serious issues we discussed throughout this update, the governments and businesses have learned how to operate through a pandemic and supply chains have become more resilient than they were pre-pandemic. We still urge all customers to review their inventory and demand visibility in their supply chains – the earlier a potential issue is discovered, the more options you will have to react and find a solution.

The port backlogs are likely going to ease over the coming months, and without additional huge shocks we are probably seeing the worst delays and highest prices now. Omicron does pose a risk, especially if the variant overwhelms health systems and causes lockdowns again. The path for COVID to become endemic will be rough, and we are likely to see additional variants and mutations in the coming years before it is as common as influenza. Even so, governments have learned to balance the need to protect lives and the need to maintain livelihoods much better than in early 2020. Inflation and labor shortages could both slow the recovery but are unlikely to get to crisis levels.

In summary, our view is that we are currently experiencing the worst of the COVID-related supply chain disruptions. While the challenges will continue well into 2022, the next focus will be how quickly the market can shift to a post-pandemic “new normal” and what this new normal will look like.

Posted by Eric Brickman in News, 0 comments

November 2021 Market Update

Over the past month we have heard from Supply Chain Managers and Purchasing Departments that their roles are more akin to firemen, constantly putting out blazes left and right. With a focus on immediate emergencies, it can be difficult to find the time to keep up with recent developments. Below are some of the most impactful updates we are keeping an eye on.

With Peak Season for ocean freight on top of strong consumer demand, the largest US port now has a record 100 ships waiting to dock. Even with President Biden`s recent focus on relieving congesting, disruptions are rippling through the complex global freight market.

In August there were a record 44 ships waiting for space at the Port of Longbeach / LA which processes about 35% of all US Imports (more than double the volumes of the next largest port, Newark). For supply chains this was an unprecedented disaster clogging the already tight ocean freight system that relies on timely turnaround of equipment to keep operating smoothly. As of last week there are over 100 ships waiting for berths. To understand the scale of current congestion, the pre-pandemic record for ships waiting at the port was 12, back in 2014.

Why is congestion so bad right now?

The problem with congestion at ports, which is also an issue outside of the United States, is that the ships and containers dedicated to a trade-lane are lost from circulation while they wait to load or unload. The freight market works most efficiently when equipment is always in operation and any delay in operation ripples through to future sailings. This causes delays for material that is physically on the ships waiting to unload, but also for material waiting for the ships to complete their voyage and start a new trip. The typically high demand from retailers to stock shelves in advance of the December Holidays has increased demand in the past few months, further disrupting the system. Retail imports are at their highest levels ever, making this Peak Season even more disruptive than normal. There has also been a shortage of dockworkers and truck drivers, which we dive into deeper below.

The graphs below from the National Retail Federation shows 2021 Retail imports surging this year, with growth since August constrained by port congestion rather than lack of demand.

Continuing power shortages in China have limited production capacity and increased costs for factories, many of which now depend on diesel generators or face reduced capacity.

Power shortages in China have continued and are likely to persist over the coming months, despite Chinese Government efforts to import more coal and reduce price caps on electricity. The high demand for imports from countries like the US is causing increased power demand from manufacturers in China, and with demand expected to remain high through 2022 many Chinese factories have resorted to producing their own electricity with diesel generators. The Chinese Government has allowed coal mines to increase production, and afforded electricity producers a 20% price fluctuation to pass on increased costs.  Still, the price of coal in China is now at all-time highs and officials have been warning factories in China of power rationing for the months ahead, especially as the colder weather brings higher demand for electricity to heat homes.

How did this happen? Chinese emission targets have reduced the production of coal in China, which forced prices higher. The government strictly controls electricity prices in China to keep them artificially low, and this means that coal burning power plants had two choices – continue production and operate at a loss or reduce output of electricity. At a time when global demand is rising for durable goods which China produces, this has caused a mismatch of incentives. Even with powerplants now working on acquiring more coal at any cost, the Chinese Government is warning businesses to prepare to ration electricity over the next few months, so this problem will remain for some time.

The top 3 most productive Chinese provinces of Jiangsu, Guangdong and Fujian all have power rationing in place

Labor shortages across the US are adding to higher prices and delays, with ports, truckers and warehouses struggling to attract workers.

Part of the delays seen in freight have been due to lack of dockworkers and drivers, which is causing 30% of pickup appointments at LA-Long Beach to go unused. Ports have complained for months that it is taking importers longer than ever to accept delivery of their containers, which has crowded staging areas and made it difficult to unload additional vessels. To find space for the backlogged containers, Long Beach has allowed stacks as high as 5 containers up from the previous limit of 2.

Warehouses that normally take delivery of containers as soon as they are unloaded are now allowing containers to remain at ports for 5-10 days, much to the lament of port directors. This demurrage costs thousands of dollars per container, but in a market where container rates are over $20,000 and warehouses do not have enough workers to meet demand many importers are opting to use ports as secondary storage. There are almost 500,000 open jobs in the warehouse and transportation industry, and demand for warehouse workers is rising as the holidays approach.

The graph above from Bloomberg shows hiring data up to July 2021

“Transitory” inflation may last longer than previously expected, with some central banks and governments preparing for years of price increases as the world rebounds from COVID-19.

In previous Market Updates we have discussed the possibility of extended inflation, and the dilemma that expected inflation impacts actual inflation. While inflation doomsayers are always sounding the alarm on the risks of higher prices, it would be imprudent to ignore the possibility that the various challenges affecting supply chains could cause an extended period of inflation. This week the Bank of England announced it would begin raising interest rates in response to the threat of “medium-term” inflation spurred on by shortages and continued supply chain disruptions. All the issues in this update (record-high freight costs, rising manufacturing costs in China, labor shortages) lead to increased costs for businesses, some of which are passed on to consumers. With additional government spending on the horizon and a push toward a green energy transition, demand for industrial products and durable goods is likely to remain high in the coming years, leaving little time for supply chains to catch up.

While specific issues will be resolved in the short term, global supply chains are currently stretched beyond capacity and any further shocks to the system will have outsized impacts. Severe storms, COVID outbreaks in Asia this winter and a possible oil spill near the Suez Canal could all disrupt global supply chains.

Regarding fasteners, even extremely common items are stocked out domestically. Companies needing immediate inventory replenishment may need to use substitute items.

Since April/May 2021 domestic stock levels of fasteners have been falling dramatically. Companies that realized they were low on fastener inventory began scrambling to buy any material they can find, leaving many top factories out of stock for months. Whereas there are normally many suppliers with available material many are now completely stocked out. Some common parts are out of stock across the country, forcing companies to use substitute items.

The market has shifted to favor those who are able to plan and forecast. The situation is so tight that we regularly have calls now from our competitors looking for parts. Domestic manufacturers still have lead times extending 12-20 Weeks.

The question we are asked most is, “When will things return to normal?” The answer is complicated; the proper course of action is clearer.

As the volatility since 2020 shows, forecasting is unpredictable to say the least. COVID has illustrated the successes and failures from past decades of globalization – A seemingly small disruption such as 30 COVID cases in a Chinese City can delay hundreds of billions of dollars’ worth of goods, for instance.  What we can say with certainty is that supply chains that were previously optimized for just-in-time delivery and low cost are proving less resilient than necessary. The global freight market is at a delicate point where additional disruptions will cause enormous delays. Manufacturing centers in Asia are generally operating at capacity, and the push toward green energy and government spending in the US will likely keep demand high in the near-future.

The answer to the question above is “it depends”. If there are no additional disruptions or shocks to supply chains, some experts, including Jamie Dimon of JP Morgan, are predicting a return to stability in early 2022. Other experts and economists are predicting disruptions to continue through 2023, as worker shortages and additional waves of infections continue to cause issues.

Our view at Uneeda is that the future is uncertain and risks for further disruption remain high. Our inventory planning has always taken a “plan for the worst and hope for the best” approach, and it has served us well through the past 67 years. To date, Uneeda has never enacted a Force Majeure or changed the terms of an order due to market fluctuations, and we intend to uphold our integrity moving forward.

We urge all customers to review their inventory and demand visibility in their supply chains – the earlier a potential issue is discovered, the more options you will have to react and find a solution.

If you have any questions, feel free to reach out to us and we would be happy to discuss further.

Posted by Eric Brickman, 0 comments

June 2021 Market Update

With the volatility and uncertainty in supply chains getting worse, we at Uneeda have been compiling news from trusted sources and industry experts to help you understand the trends affecting your business.

Since our last update in May, prices have increased, and lead times have lengthened further due to material shortages and lack of container availability. From what we are seeing, we are not yet experiencing the worst of the effects. The trends we follow point to a further slide towards volatility and a sustained cycle of challenges until at least Q2 2022.

See a deeper dive below, including supporting stories from trustworthy news sources hyperlinked in blue.

New Trends

COVID is not gone…. While cases are down dramatically in the United States, current spikes in Taiwan, India and China have impacted supply chains over the past few weeks and will continue for the foreseeable future. Taiwan had almost zero cases throughout the pandemic, implementing a robust testing and quarantine policy and shutting the borders to foreign visitors. In just the last two weeks case levels have spiked and the country has been one step away from a nationwide lockdown. Vaccines are being rushed in from the US and cases have been falling since the peak on May 17. We are monitoring the situation constantly and a nationwide lockdown appears unlikely.

China and India are dealing with their own regional spikes which have so far impacted raw material availability and freight. One of the world’s busiest ports in Yantian China shut down to less than 30% capacity last week after multiple dockworkers tested positive. Further COVID variants such as the emergent variant in Vietnam could cause serious disruptions in countries that have managed the pandemic successfully so far, and could continue well into 2022.

The global freight market has continued to worsen, with Year over Year price increases of 400% and lack of availability impacting lead times. Demand is essentially 50% higher now than the same period in 2019, and the tight freight situation is expected to continue through 2021. There is a lack of containers as well as ships which as caused delays in shipping of over 4 additional weeks – Spot rates, which are normally how most importers move freight, are irrelevant as there are no available containers to be loaded at standard prices. To get a container shipped now, importers are relying on the premium market where there is some availability.  We have seen rates this week over $15,000 without a guarantee of booking. Many carriers are also limiting weight per container to 7,500kgs which is less than half of the typical container weight. Air freight rates are between $10-14/KG, much higher than the cost of most hardware of the same weight.

Demand for physical goods is much higher than predicted, causing a wave of orders for factories and overloading freight lines. As the US began to re-open and roll out vaccines in early 2021, the consensus by industry analysts was that people shift from buying physical goods and begin spending more on entertainment, travel, and restaurants. While venues have largely re-opened over the past few months, demand for durable goods remains stubbornly high. This signals a longer-lasting trend in consumer purchasing, highlighted by Walmart`s recent rise in earnings projections after higher-than-expected revenue growth. This trend in consumer preference toward e-commerce and high demand for durable goods is stressing every aspect of global supply chains at the moment. Federal Reserve Economic Data shows that Personal expenditure on Durable goods is almost 50% higher than pre-pandemic levels.

Continuing Issues

Raw material shortages are at critical levels. With high demand for durable goods in the US and increased manufacturing and construction globally, raw materials have been increasing in price almost across the board. Recently European manufacturing has picked up and with it there is even more demand in Asia for hardware. Our factories have rejected quotes simply because they cannot acquire material. Just to acquire raw steel wire factories have reported lead times of 120+ days, up from 60 days just 2 months ago. China Steel Corporation, who has a near-monopoly on steel wire used in fasteners, has limited factories with quarterly quotas to preserve stock levels. Some signs point to a plateau in steel prices with slight decreases toward the end of the year, but this scenario is far from certain. Further US Government spending could increase demand for raw materials, further straining the already short supply.

Domestic stock-outs are here… Many of our top domestic suppliers are completely out of stock on common items until October and November. Others that have material have implemented quotas to protect material as large national fastener chains have sought to purchase all available material in expectation of the chaos to come. This means any of our customers that normally purchase material with a 1-2 Week lead time may find it extremely difficult to get material. Domestic factories are offering lead times of 10-22 weeks depending on the item, and some have started canceling existing open orders as they cannot keep up with demand. This fact does not seem to be understood by most manufacturers or consumers yet, so it will undoubtedly be harder to find items locally in the coming weeks.

Global Demand for goods and material from Asia is increasing as vaccine rollouts improve. Over the past month European countries have begun easing their Spring lockdowns, and our factories are telling us that they are seeing increased orders from European customers to replenish stock, much as the US did in Fall 2020.The worst bottlenecks are at secondary processors such as platers and painters. Our factories have been listing these as significant components of increased costs and many processors are fully booked until May 2022. Looking further out, the recently proposed infrastructure plan coupled with ambitious pledges to reduce greenhouse emissions will further stress the availability of metals like steel, copper, zinc and cobalt if followed through on.

The Solution

With the extremely long lead times overseas and shortage of common items domestically, we strongly advise all customers to plan far ahead as possible based on their hardware usage. Even in the absolute best-case scenario, overseas lead times are already pushing past the 12-month mark.

Companies that plan farther ahead over the last few months have seen almost no disruption to their fastener supply and have not needed to spend on costly airfreight or rush orders. Almost daily we see companies that have not planned for the environment take drastic measures such as airfreight, UPS next day air, and stopped production lines to account for the lack of fasteners which usually cost less than $0.01 each.

The trends we are following point to an extended period of volatility and long lead times. The companies that chose to wait until the last moment to replenish will be victim to the reality of the current market, where domestic factories are unable to process rush orders and even common items are stocked out in the US. The core tenants of supply chain management such as Just In Time inventory and Lean Manufacturing principles will not suit companies well in the current environment of such sustained and dramatic instability.

If you have any questions on how to mitigate these risks or concerns, please reach out to us at 1-800-535-2800 or email sales@uneedabolt.com

Posted by Eric Brickman, 0 comments

May 2021 Market Update

The situation in global supply chains and manufacturing has gone from bad to worse in the past few weeks. The spike in Indian COVID cases has further stressed supply chains already dealing with high demand, lack of raw materials, and an explosive freight market. The domestic hardware market has started to react over the last 2 weeks, with some national chains stockpiling any material they can find, stocking out factories until October and November on common items. The trends we have been following since 2020 are now impacting every level of the global supply chain, and we are urging all customers to review inventory now and cover themselves for the next 8-12 months to avoid stock outs.

New Trends

Raw material shortages are at critical levels. With the sharp rebound in demand over the past few months, raw materials have been increasing in price across the board. Recently European manufacturing has picked up and factories need to replenish stocks (much as the US did in the Fall 2020) and with it there is even more demand in Asia for hardware. Our factories have rejected quotes simply because they cannot acquire material. Much of the raw wire that is used for hardware comes from smelters in India, and with the recent COVID spike factories have been ordered to divert oxygen to medical use. With the diversion of oxygen and workers returning home for safety, raw material supply is expected to become even tighter. Just to acquire raw steel wire factories must wait 60-90 days right now. The impact for 410 and 18/8SS will be even harder than the impact on steel availability.

Domestic stock-outs are here! Many of our top domestic suppliers are completely out of common items until October and November. Others that have material have implemented quotas to protect material as large national fastener chains have sought to purchase all available material in expectation of the chaos to come. This means any of our customers that normally purchase material with a 1-2 Week lead time may find it extremely difficult to get material at all, unless it is in our stock or on order from overseas. Domestic factories are offering lead times of 10-22 weeks depending on the item, and some have started canceling existing open orders as they cannot keep up with demand. This fact does not seem to be understood by most manufacturers or consumers yet, so it will undoubtedly be harder to find items locally in the coming weeks.

Global Demand for goods and material from Asia is increasing as vaccine rollouts improve. Over the past few weeks European countries have begun easing their spring lockdowns, and our factories are telling us that they are seeing increased orders from European customers to replenish stocks, much as the US did in Fall 2020.The worst bottlenecks are at secondary processors such as platers and painters. Our factories have been listing these as significant components of increased costs and many processors are fully booked until January 2022. Looking further out, the recently proposed infrastructure plan coupled with ambitions pledges to reduce greenhouse emissions will further stress the availability of metals like steel, copper, zinc and cobalt if followed through on.

While the global freight market appeared to show signs of easing last month, the high demand and Suez Canal blockage has caused a “tsunami” of freight to back up. Demand is essentially 50% higher now than the same period in 2019, and the freight situation is expected to continue through 2021. The blockage at the Suez canal affected millions of TEU and those containers will be late returning to Asia for the next trip. We are seeing rates of over $10,500 per container to lock down available space 4 weeks in advance, up from the standard $2,000-$2,500 we were seeing pre-pandemic. The only winners here are the shipping lines, which are reporting record profits this year.

Worse than incredibly high pricing is the lack of available space. Even paying huge premiums freight is backed up 4 weeks or more now. Speaking with our larger multinational customers who bring in thousands of containers per year, many have told us they can only book 1/3 of the containers they have ready to ship. The backlog is so large that the lack of availability likely will not subside until 2022.

The Solution

Just as the world is beginning to turn the corner regarding COVID, the effects of re-opening economies and complex global supply chains means the challenges we face will likely be with us into 2022. With these numerous risks in a global supply chain due to COVID and its associated effects and the solution is still to plan much further in advance than you have historically to account for unpredictable events. It is also crucial to have transparent communication from all members of your supply chain. We will successfully navigate 2021 together with foresight and planning.

If you have any questions on how to mitigate these risks or concerns, please reach out to us at 1-800-535-2800 or email sales@uneedabolt.com

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April 2021 Market Update

2021 is shaping up to be a volatile year in manufacturing – as one challenge subsides, another intensifies. Ocean freight has been an ongoing concern since the pandemic started last March, and there are now faint signs of a more stable freight market. Ocean freight rates have stabilized from the record highs last month, and the backlog at the busiest ports is beginning to let up despite a 47% increase year over year in imports.

Raw material shortages are the new focus with scarcities and price increases on plastics, steel, cardboard, and wood. The freak freeze in Texas has some of the largest petrochemical manufacturers shut down. The ongoing issues are starting to trickle down to consumers, with many retailers (Nike, GAP and Best Buy to name a few) listing supply chain delays as causes for reduced sales. Many estimates suggest that material shortages will remain until at least early summer when opening entertainment, retail and travel sectors relieve some demand-pressure from manufacturers.

The US economy is looking brighter if we can live with a little inflation. The Federal Reserve suggested last week that they would not be raising interest rates through 2023 and would accept some inflation to help recover lost jobs from the pandemic. Manufacturing output increased in March, although many companies list labor shortages as the cause for production delays as they struggle to hire workers. Vaccinations are rolling out quicker than planned and many states are allowing access to all adults within the next few weeks.  

New Trends

Raw materials markets have been volatile due to high demand and in some cases, weather. The freezing conditions in Texas could cause months of plastics shortages, with PVC, HDPE and other plastic costs rising sharply. Steel mills domestically and in Asia are still struggling to meet demand as the global economy rebounds sharply. Our factories have told us of rationing and monthly quotas from steel mills, especially on specialty steels such as 316 Stainless. Even domestic mills are increasing lead times by 50-100%. Looking at Federal Reserve Economic Data, other metals such as Copper, Aluminum, Brass and Zinc have all been rising since late 2020.

There are some signs of easing at key US Ports – Last month more than 50 container ships were at anchor outside of Long Beach and now there are about 20 (the lowest since December 2020). Carriers have been adding any capacity they can and scheduling blank sailings to ease the congestion on the west coast. About 1/3 of the total freight volume in NY/NJ is empty containers moving back to Asia. Domestic trucking and inland freight from ports has become expensive as weather conditions earlier in March and increased demand has driven pallet rates higher. Spot rates have come stabilized from the highs of last month, and there are signs that the freight market may be less volatile going forward as dockworkers are vaccinated and demand for goods alleviates with the re-opening of restaurants and travel this summer.

Ongoing Concerns

The USD has weakened relative to most other currencies since the pandemic began, although recent signs show a strengthening. Most of the decline in value has been since October 2020. Wall street analysts are suggesting that a weak USD will continue for some time, with US interest rates expected to stay at or near 0%. The USD did gain on some other major currencies in the past month, which analysts say is due to vaccine rollouts domestically and 3rd waves of the virus hitting Europe and parts of Asia. The wall street “Fear Gauge” VIX Index, which measures volatility in markets, hit the lowest point since the Coronavirus started last year signaling stability in markets.

Adding to lead times, secondary processors like painters and platers are backed up with work. On large quantity items, lead times have been significantly extended as there is simply not enough capacity to meet the current demand. We are still seeing some RFQs rejected outright due to lack of capacity at painters. Unfortunately, most factory capacity is fully booked through the 3rd quarter of 2021. Owners are reluctant to add much capacity to their lines, as they have told us they do not believe the strong demand will continue beyond 2021 as manufacturers replenish inventory that ran low during the pandemic.

The Solution

Ocean freight is starting to stabilize, and vaccine rollouts are going well in the US. Material shortages will be a threat for the next few months, and the possibility of 3rd waves of Coronavirus variants still pose a risk to stable manufacturing markets beyond the summer. With these numerous risks in a global supply chain due to COVID and its associated effects and the solution is still to plan much further in advance than you have historically to account for unpredictable events. It is also crucial to have transparent communication from all members of your supply chain. We will successfully navigate 2021 together with foresight and planning.

If you have any questions on how to mitigate these risks or concerns, please reach out to us at 1-800-535-2800 or email sales@uneedabolt.com

Posted by Eric Brickman, 0 comments
Risk Management Through Uneeda

Risk Management Through Uneeda

With all the recent turmoil in global markets, many risks in your supply chain have likely become apparent. There are risks associated with any supply chain, but a solid partner should work with you to help you understand and mitigate these risks before they become an issue. We at Uneeda understand that the hardware we provide is likely not your most expensive or time-consuming component of your product, but if there is an issue It can shut down your entire operation. For this reason, we make painstaking efforts to reduce risk at all levels of our (and by extension, your) supply chain.

Starting at the source, we multi-source every item to ensure we have options if in the rare event there is an issue with a particular factory. Uneeda has multiple sources so that you do not have to. Uneeda has been importing since the 1970s and has thoroughly vetted all of our factories. We only purchase from ISO:9001 certified sources that produce high quality parts. Furthermore, we demand clarity and complete communication throughout the order process to best manage every order.  Not just any factory can supply Uneeda.  It is an exclusive club.

On this note, we switched the bulk of our overseas production to Taiwan decades ago to ensure consistent quality parts and open and clear communication.  We instill in our Factories the notion of partnership and our partners know they are expected to pass along market updates as to what they are seeing so we can help you best prepare for future conditions. We are constantly looking to qualify new sources, across various countries to lessen any possible political risk as well.

Once an order is placed, we expedite individual parts monthly with our factories and require reporting of all items; where they are in production, and when they are expected to ship out. This level of granularity gives us the ability to forecast arrival dates accurately and stay on top of potential issues before they arise.  This proactive behavior allows us to handle potential issues in production with little to no impact on our customers.  

We have three NVOCCs (Non-Vessel Owning Common Carriers) that we shop rates on every 15 days to ensure we are getting the best possible ocean freight rates, allowing us to ensure we are not overspending on ocean freight, and keep your prices as low as possible. We buy in large quantities and we always import material in full containers, further improving the efficacy of ocean freight and keeping costs at bay. When a single order does not fill a container, we consolidate with other orders to save as much as possible on freight costs. We are in daily communication with our carriers and require market updates as soon as they are available, which we pass along to our customers when applicable.

When your items are supplied by Uneeda you can be sure that your supply chain is protected. Our responsibility as your hardware supplier is to keep you in the loop on what we are seeing at every level. We have numerous safeguards working cohesively at every stage of production to be sure you get the right parts, on time and without surprises.

If you would like to discuss what Uneeda can do for you or have any questions please reach out to us at Sales@uneedabolt.com or call 1-800-535-2800.

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Which Drill Bit Should I Use?

One of the most common questions we are asked by our customers is which drill bit is the right for their projects. With so many designs and materials it can be confusing to know which is best for your project, so we break down key characteristics below.  

Jobber Bits

Among the most common drill bits, Jobbers are a good all-round drill bit for most projects. They come in a variety of materials and points. “Jobber” refers to the length of the bit.

Tip Style

Split Tip – A split in the tip of the drill bit that allows it to self-center. The split begins to cut before the sharp edges of the drill meet the material. Commonly used along with 135°

Standard Tip – Most common in 118°, a standard tip is perfect for drilling soft materials.

Tip Angle

90 Degree Tip – Relatively uncommon, used on very soft materials like plastic or vinyl.

118 Degree Tip – The most common tip for drill bits, it works well in softer materials like wood, aluminum, thin steel or plastic. They may start to walk when drilling harder steel, and therefore a center-punch should be used to keep the bit on target. Smaller diameter bits under 1/16” are almost always 118°.

135 Degree Tip – Mostly used on hard materials like 410SS or Steel, these bits have a less aggressive tip and center themselves well on harder surfaces. The angle of the tip allows the bit to cut into the material relatively quickly without dulling the tip as on a 118° bit.

Bit Material

In addition to the tip, you should consider the material that the bit is made from.

High-Speed Steel – Most common material great for general purpose use. It is surface treated to ensure a harder material than low-carbon steel. Surface treatment also reduces abrasion and friction between the bit and the material being drilled.

Cobalt – Harder than HSS, these bits are used for drilling steel and stainless-steel and typically are used in conjunction with a 135 Degree Split Point. Cobalt bits are more heat-resistant than steel bits and do not dull as quickly when operated at high temperatures. Keep in mind that any high-temperature usage of a drill bit will eliminate the benefits of heat treating and cause the bit to dull. Lubricating the bit will extend the useful life.

Carbide and Carbide Tipped – Harder material on key points on the bit, good for non-ferrous materials. Carbide in these applications is a combination of either Titanium or Tungsten with Carbon to create an extremely hard, heat resistant material. Tungsten Carbide, for instance, has a hardness on the Mohs Scale of about 9.5 (10 being natural Diamond).

Concrete/Masonry Bits

Masonry drill bits are shaped differently from Jobber bits, and typically have a softer steel body for debris removal with a Tungsten Carbide cutting tip. Masonry bits have larger flutes to allow debris to exit the hole and reduce friction on the bit.

Some masonry bits called SDS Bits are designed to be used in a hammer-drill. These Slotted Drive Shaft bits lock into hammer-drills and are perfect for drilling concrete or brick and are often made entirely from Tungsten Carbide. It is important not to exert too much pressure on an SDS bit as it will reduce the effectiveness of the hammer-drill as the bit both spins and reciprocates in and out of the hammer-drill.

Uneeda Bolt stocks multiple lines of drill bits, both USA Made and imported. If you have any questions on which bit is right for your job give us a call!

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Manufacturing Market Updates

On Saturday the US House of Representatives passed President Biden`s $1.9T Stimulus package. Should the package pass the Senate, most Americans will receive an additional $1,400.00 check. The $15/hr minimum wage hike was removed before the bill went to the Senate, a benefit for US Manufacturing. For manufacturers both domestically and overseas, the prospect of additional stimulus is likely to cause increased demand for products in the near term. Supply chains could be stretched even tighter, and inflation could become a concern as too many dollars chase too few goods.

On another note, vaccine rollouts have been ramping up and with the single shot Johnson & Johnson vaccine starting distribution, plans to bring COVID under control are on the horizon. Crucially, dock workers across the country have been prioritized as essential and many have already been vaccinated. Hopefully, this will help ease record congestion that has built up at West Coast ports and start returning empty containers back overseas.

New Trends

Metals markets have been volatile as mills have trouble meeting demand, and prices on steel are expected to continue rising in the short term. Steel mills domestically and in Asia are struggling to meet demand as the global economy rebounds sharply. Factories have told us of rationing and monthly quotas from steel mills, especially on specialty steels such as 316 Stainless. Even domestic mills are raising lead times by 50-100%. A recent report by the Shanghai Metals Market details the skyrocketing price of copper in February, and the increases in Nickel, Aluminum and Zinc. Copper and Aluminum prices could come down in the short term, as a decrease in new orders due to the recent spikes is expected.

The continuing demand for imports has caused congestion at ports to increase. Currently more than 50 container ships are at anchor outside of Long Beach – In February there were about 30. Gene Seroka, the Executive Director of the largest US port in Long Beach stated recently, “These are levels of shipments we have never seen in our 113 year history.” The vaccination of dock workers should help, but the backlog of finished goods waiting to ship from Asia and strong demand suggest that the stretched freight market is now expected to continue through 2021. Consumers are still spending more on durable goods (retailers have record-low inventory levels) and less on entertainment and dining.

Ongoing Concerns

The USD has continued weakening relative to most other currencies in the past year. Most of the decline in value has been since October 2020. Relative to the Taiwan Dollar, the USD is at the lowest point since 1997. Relative to the Chinese Yuan, the USD is 8.3% weaker than this time last year. Wall street analysts are suggesting that a weak USD will continue for some time, with US interest rates expected to stay at or near 0% and further economic stimulus increasing the supply of US Dollars. With a weak USD, imports become more expensive and costs for material purchased in USD increases.

Adding to lead times, secondary processors like painters and platers are backed up with work. On large quantity items, lead times have been significantly extended as there is simply not enough capacity to meet the current demand. We are still seeing some RFQs rejected outright due to lack of capacity at painters. Owners are reluctant to add much capacity to their lines, as they have told us they do not believe the strong demand will continue beyond 2021 as manufacturers replenish inventory that ran low during the pandemic.

The Solution

The vaccine rollouts have consumers and markets feeling positive about the future. Manufacturers and distributors have a less rosy outlook for the coming months as high demand and uncertainty make forecasting more of a crap-shoot than a science. There are still numerous risks in a global supply chain due to COVID and its associated effects and the solution is still to plan further in advance to account for unpredictable events and demand transparent communication from all members of your supply chain. We will successfully navigate 2021 together with foresight and planning.

If you have any questions on how to mitigate these risks or concerns, please reach out to us at 1-800-535-2800 or email sales@uneedabolt.com

Posted by Eric Brickman, 0 comments

Corrosion Resistance

Almost every steel fastener produced is either plated or coated with a layer to reduce corrosion. Un-plated steel will rust, even indoors, due to moisture in the air and eventually lose its structural integrity. To combat this, manufacturers coat steel fasteners in a variety of coatings and other metals through processes like Electroplating and Chemical Vapor Deposition.

Corrosion resistance in fasteners is measured using a Salt Spray Test. This method tests the material using a 5% Na saltwater sprayed onto the product in a closed environment. By measuring the time it takes for oxides (rust) to form on the product, corrosion resistance can be determined.

There are many variables that affect rusting on a steel part, so this test is not exact. It is the convention in the fastener industry and therefore the metals and coatings below will be described by their hours of corrosion resistance in a Salt Spray Test. The following information is based on our 65+ years of experience in the fastener industry, always refer to your engineering team before implementing product changes.

Plating

The most common plating by far is Zinc Electroplating. This coating is a thin layer of zinc over the steel part, about .0002” thick. This provides a shiny-metallic finish and about 30 hours of corrosion resistance using the Salt Spray Test. .00015” thick Yellow Zinc (Zinc with Yellow Chromate) has about 72 hours of corrosion resistance.

Thicker layers of Zinc provide more protection. .0005” thick zinc electroplating provides about 96 hours of corrosion resistance.

Hot Dipped Galvanizing, where the parts are physically dipped into liquid zinc, has a thickness of about .01” and can provide corrosion resistance up to 1000 hours.

Steel parts can be plated with other metals, such as Nickel, Brass, Copper, and Tin. Each of these will provide some protection of the underlying steel, but eventually, all will rust.

Coatings

Synthetic coatings have been created to improve corrosion resistance over electroplating. There are many brand names for these coatings, and in general they provide 1000 hours or more of corrosion resistance. These coatings also come in various colors to match customer products.

At Uneeda, we often use Ruspert Coatings, which consists of a 3-layer coating.

  • Layer 1: Metallic Zinc
  • Layer 2: Anti-Corosion chemical film
  • Layer 3: Baked Ceramic surface

Another coating method that has become popular is Dacrotization. This method was developed by Diamond Shamrock Co., Ltd and is especially popular in deck screws that can resist corrosion in treated lumber for outdoor use. Dacrotized treatment is applied by dipping parts into a liquid bath and then spinning to remove any excess. The parts are then baked at high temperatures to give an extremely corrosion-resistant coating. See the image below for results after 2,000 hours of the Salt Spray Test.


*NOF METAL COATINGS ASIA PACIFIC CO., LTD.

Material

The most important component of corrosion resistance is the base material that a part is made from.

Low-Carbon steel is one of the most common material types as it is inexpensive and strong. Its tendency to rust requires some sort of plating or coating in most cases to protect from corrosion.

410 Stainless Steel is similar to low-carbon steel in its strength, and it provides a moderate amount of corrosion resistance. Passivation is often performed on 410SS which dips the material into an acid bath to remove any iron particles or other contaminants from the surface. Passivated 410SS parts will typically pass a 48 hours salt spray test. Some customers plate the 410SS Zinc to add corrosion resistance and improve drivability (Zinc acts as a lubricant). 400 series stainless steel is hardened through heat treatment.

18/8SS is a term for all 300-Series Stainless Steels, typically 302HQ or 304. 300 Series Stainless is much more corrosion resistant than Steel or 410, but is a weaker material for fasteners. 18/8 Stainless has higher levels of Chromium (~18%) and Nickel (~8%) and can pass 1000 hours of the salt spray test. 18/8 Stainless can be used in ACQ treated lumber without any additional plating or coating. These types of fasteners are hardened through cold working, where the fastener is formed from the wire without heating.

316 Stainless, which is often used in commercial kitchens and other high-touch environments, includes 2-3% Molybdenum which increases corrosion resistance. 316 Stainless is less prone to pitting and bleeding than either 410 or 18/8.

With all types of stainless steel, there may be some surface rust as Iron particles exposed to the elements begin to oxidize.  This surface rust will not penetrate as quickly through the part as it would in a steel part.

If you have any questions about what type of material, plating, or coating is right for your application, call us or email sales@uneedabolt.com!

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