Supply chain disruptions still impacting 'nearly all' chemical manufacturers

17 April 2023

Supply chain kinks might be flattening out, but new research finds nearly all chemical manufacturers still face significant supply disruption – with supply chain woes higher than pre-pandemic levels.

According to data from the American Chemistry Council (ACC), nearly all (93%) of the 76 companies questioned said supply chain and freight transportation disruptions are still impacting their US chemicals manufacturing businesses.

Recent disruption was so great that the vast majority of firms (86%) said they were forced into modifying their operations because of supply chain issues and/or transportation disruptions in the second half of 2022.

Moreover, it found conditions are still worse today, compared to pre-pandemic conditions.

Commenting on the data, ACC senior director of regulatory and scientific affairs, Jeff Sloan, said: “Hoping things will improve on their own is not a strategy.”

Sloan said manufacturers now need government intervention to recover.

He said: “There are several sensible policy reforms that are ready to go that could help address these major transportation problems now and into the future.”  

Overall, chemical manufacturers observed some “unwinding in supply chain kinks”.

But while two-thirds of firms (67%) said freight conditions had improved compared to the first half of 2022, some 83% said that overall, conditions were still worse than pre-pandemic levels.

ACC director of economics and data analysis Emily Sanchez added: “There are signs that conditions have improved, but the transportation problems plaguing our members are far from resolved. Marine and truck transportation have improved, but poor rail services continue to be a major concern.” 

Supply-side delays meant that more than a third of companies (36%) said customers had cancelled orders – either because they were concerned their order would not arrive on time, or that they would not arrive at all. 

To try and offset this, three-quarters (75%) of firms said they had increased the amount of materials and supplies they had in stock. But they also said this had raised costs and resulted in constrained warehouse capacity.

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