Fastenal’s chief executive said Monday that the Minnesota-based distributor has raised prices on “some” of its products in the wake of new tariffs imposed by the Trump administration.
But Dan Florness added that the company is actively engaging with its customers to help navigate a changing environment — and that Fastenal is able to provide “a pretty good window of time for options to view into the future.”
“Our biggest message to our customers: ‘Your supply chain has gotten more expensive, and let’s look at options to manage that expense,’” Florness told CNBC.
The price increases have primarily occurred in the company’s fastener lineup, which Florness said accounts for roughly one-third of Fastenal’s business. The company’s other product categories have not yet been impacted, and he noted that its approximately four months’ worth of inventory provides some flexibility to address new challenges.
Florness said the company has also benefited from overhauling its sourcing to “a broader range of countries” following tariffs implemented in the first Trump administration.
“When the tariffs came through in the 2017 and 2018 timeframe, we were much more skewed towards China and Taiwan.”
Florness added that Fastenal began the process of shipping products destined for customers in Canada and Mexico directly into those markets, rather than routing them through the U.S., “months ago,” although he conceded that it remains a challenges given the volume of SKUs that Fastenal deals with.
“Logistically, it’s more expensive than bringing it in with all of our other shipments into the central United States, and then moving it out from there,” Florness said. “But it’s a lot less than a 70% tariff getting added onto fasteners, for example.”
The company also learned a series of important lessons from economic challenges over the past decade — from the first round of tariffs to the pandemic years. In each of those circumstances, Fastenal had an “open dialogue” with customers about “things we can do to better manage your supply chain.”
At a recent Fastenal customer event in Nashville, in fact, “there wasn’t a lot of discussion about tariffs,” Florness said.
“The discussion was all about [the] supply chain, and ways to source differently, to be more creative,” Florness told CNBC. “A lot more discussions about some of the tools we can bring to the customer’s table.”