Helping customers is what Legacy Fasteners is all about. Ever since the company opened in 2017, the U.S. nail manufacturer, co-owned by Jeff Libla and Marsha Libla, has worked to earn customer loyalty one interaction at a time. With over 30 years in the U.S. nailing industry, the brother and sister duo of Jeff and Marsha Libla know the pallet nail market.
During this historic nail crunch, Legacy Fasteners has helped many pallet companies out of a bind. Marsha Libla commented, “I have heard from customers that we saved their company and kept their pallet production flowing when other nail suppliers couldn’t deliver.”
Legacy Fasteners has purchased additional equipment and has shut down some other product lines to focus on bulk pallet nails. As the nail manufacturer has increased capacity, it has produced more “less than truckload” (LTL) quantities to help more customers. Legacy used to send out 50 LTL shipments per month; now it is doing as much as 250 per month. Marsha said, “We’re just trying to take care of people. Instead of selling one person a truckload, we’ve taken that truckload and helped maybe four or five people with it.”
Another thing Legacy has done is diversify its supply. While the company does produce the majority of its nails in the United States, it does buy some from other domestic and import sources, especially for less popular items. Jeff Libla explained, “We’re trying to stay focused on certain product lines that are high volume for our own production. And some of our customers require different types of nails, so instead of us producing those here, we’ve been buying those from other domestic sources.”
Diversified sourcing is a smart strategy for pallet companies as well. Many pallet companies that use a lot of imported nails have approached Legacy about LTL shipments so that they have both domestic and international suppliers. Jeff reported that Legacy has grown 800% in the last five years.
Analysis of the Current Nail Market
Currently, we are in a historic nail market and shortage situation. Jeff said, “Container pricing has really messed up the import market. Then, of course, COVID impacted Asian countries as well as just about any other country in the world.”
On top of production slowdowns around the globe, COVID didn’t really reduce demand as many had expected. Jeff added, “Everything was in high demand, and all the inventories were depleted on just about any industry in the world. Now, they’re just playing catch-up. Demand hasn’t slowed, so the catch-up really hasn’t taken place. There are still no inventories.”
Another thing COVID did was push U.S. pallet manufacturers to look at domestic supply over concerns about foreign factories and shipping delays. Marsha further commented, “So, all these factors created a perfect storm scenario. Everyone that I have talked to in the nail business agree that they have never seen anything like this go on for so long or be this extreme. You think you get a breather, and then another increase comes from your steel supplier.”
Current global conditions don’t suggest that supply pressures are going to ease up any time soon. For example, the Russian invasion of Ukraine has further complicated the global steel market. Russia is fifth in the world in steel production. Ukraine is twelfth. Jeff stated, “I think the whole situation just creates uncertainty in the market.”
In a global market, small disturbances can have huge ripple effects. Marsha added, “There are some Eastern Bloc countries that manufacture nails. I do know of some people that bring fasteners from those countries over into the United States. If those countries start having problems because of Russia’s issues, then those nail manufacturers are going to start reaching out globally to other companies that produce steel and will impact already constrained capacities. This in turn will just reflect higher prices to everyone else. Whoever can pay the most for the steel is going to get the supply.”
A major steel producer recently wrote to Legacy and commented, “We are in an unprecedented situation given the war between Russia and Ukraine. Those two countries ship over 60% of the world’s Pig Iron…This supply has stopped, and the world is scrambling for the needed raw materials to produce sheet steel.”
As a result, domestic scrap prices have increased 38% in March 2022. Another domestic steel producer pointed to these and other concerns, suggesting continued upward pricing until the end of the year.
Uncertainty and fears over the Ukraine war spreading to other countries have some concerned about even further shocks to the global supply chain. Marsha admitted, “Literally, Chaille, I’ve probably had at least five or six customers ask me, ‘If this gets worse and we go to war, are you guys going to even be available to provide us nails or will you be forced to manufacturer war goods such as bullets, etc.?’”
Securing supply has required Legacy Fasteners to get creative when it comes to importing nails or steel even though it has good relationships with domestic steel sources. There are about eight rod mills that make rod and rebar in the United States. Rod is the raw material used to produce nails. Some of the big players include: Nucor, Liberty Steel, Sterling Steel, Optimus and others. Jeff explained that there isn’t enough domestic steel supply to provide for all the industries needs of steel without imports. That’s why the global steel market can have such a strong impact.
And there is competition within the country for steel supply. Marsha said, “In the steel industry, it’s very similar to the pallet industry for lumber. We’re always at the bottom of the totem pole. It’s the same with the steel that we buy. We compete against the rebar market.”
Customer Testimonials
A number of Legacy customers talked about how the company has kept them supplied, even in this most recent lean nail market. Ken Englesma, operations manager for Michigan Pallet, St. Charles, Michigan, recalled, “Legacy has been our bulk nail supplier since they began, roughly five years ago. I’ve heard the horror stories of companies running out of nails, but with Legacy as our bulk nail supplier, we thankfully have not experienced that.”
Michigan Pallet owns and operates a few different brands of pallet building machines. Englesma stated, “Legacy nails run well in all of them!…My point of contact at Legacy is Mike Sheehan (a fastener veteran) who does a great job helping to keep us supplied.”
Scott Anderson, product manager for Blackhawk Industries, admitted, “Legacy has filled a huge void for us that was created during the COVID situation when we lost another supplier. Legacy is a small enough company that my regular contact is with one of the owners. It’s nice to have that direct access to the owner.”
Blackhawk is a nail and fastener wholesaler providing services and products through companies throughout the United States, with a focus on the Upper Midwest. Legacy has been a crucial partner as import delays have gotten worse. Anderson explained, “Marsha Libla has been a huge asset for Blackhawk over the last 18 months due to all of the delays in international freight. We went from 90-day lead times to six to seven months now for shipments coming overseas. Marsha was able to fill the gaps.”
Over the past two years, Legacy has become a top supplier for Blackhawk, which buys both bulk and collated nails from Legacy.
Jim Hicks, owner of The Timbermen Inc. in Camak, Georgia is another happy Legacy customer. He buys primarily bulk nails from Legacy and remembers, “I have bought nails from the Liblas for decades. Legacy has gotten us out of some tight spots with timely delivery of nails. They sent some partial loads when that was all they had, and we needed them.”
The Timbermen has continued buying to build up larger inventory. Hicks stated, “We have a better nail inventory now than we have had in a year. We are not going to take our foot off the gas. We are going to keep buying and keep supply coming in here. I think the war is probably going to make the steel and nail situation a lot worse.”
Dennis Hansen is operations manager for Manufacturers Pallet Disposal (MPD)/Patz Pallet. It is one of the largest pallet manufacturers in Wisconsin and continues to grow every year in production output. He recalled, “Back in June 2021, we were dropped on our heads by a previous supplier as they could not ship us any nails for six months when previous lead times were less than 3-4 weeks. Marsha was able to get us a couple of skids to get us by. She worked us into her schedule and never let us go without nails and had supplied us steadily ever since.”
Hansen added, “Legacy has been absolutely amazing from a customer service standpoint. There have even been times where we had an increase in our typical usage and needed extra nails quickly, and Legacy was able to help supply us so we never missed a beat.”
Diversified Product Line
Legacy Fasteners offers a diverse product line ranging from bulk nails to collated nails, staples and pneumatic hand tools. The majority of its domestic production focuses on bulk pallet nails.
What pallet customers want has changed a bit over the last few years. Marsha explained, “For the last probably eight to ten years, what started out as a two or a two-and-a-quarter inch pallet nail started shrinking when the diameter of the lumber started shrinking. The thickness of the boards and everything started going to the one-trip pallets instead of multiple-trip pallets.”
The most popular sizes now are an inch and three-quarter, and two-inch, and some two-and-a-quarter, which are still pretty much the standard.
Besides available supply and good service, some customers rave about the quality of the nail. Scott Anderson, product manager for Blackhawk Industries, explained, “We started buying from legacy to help complement our current pallet nail offering and to help us through some rough supply issue, and we continue to buy due to their customer service and high quality product they provide.”
There are some other variations to consider depending on the application. Ring shanked nails are used for softwood lumber. Screws are commonly used for very heavy-duty pallets or crates. Blunt diamond nails are utilized in places where frozen lumber is common.
Building on the Libla Legacy and Experience
Where Legacy is headed, one day, Jeff wants to be the largest domestic nail producer serving the U.S. pallet sector. The Liblas plan to be a big part of the pallet, crating and reel industry for the long run building on their family experience in the business. Jeff and Marsha’s father and uncle built Mid-Continent into the largest domestic nail producer, and they worked and helped run the business for years before it was sold to Deacero.
Marsha explained, “I feel like Jeff and I came up with the right name for our business because we are continuing the legacy that our family started. I think a lot of it is about relationships. We are getting ready to celebrate our fifth anniversary as a company. Five years, it just seems like it’s only been a year. It has gone by so fast.”
The Liblas started from scratch and built the company using their years of experience. Marsha remembered, “We had to start over from the beginning, and our employees made all the difference. We try to operate our factory as a family.”
Jeff added, “We try to involve everybody in all aspects and help our employees. They’re not just a number. Each and every one of them is very important to our success.”
Since Legacy focuses exclusively on the U.S. pallet industry, its supply and customer service are centered on keeping the pallet industry going. Jeff projected, “If there’s a steel shortage, which there almost kind of was…Our priority is going to be focused on the pallet industry.”
