ACC survey: Supply-chain issues persist for chemicals industry

A new survey from the American Chemistry Council reports that major supply-chain disruptions have continued well into 2022, significantly affecting the U.S. chemicals manufacturing industry.

The freight transportation-related problems have negatively affected the industry for the past three consecutive quarters (Q4 2021, Q1 2022 and Q2 2022). Higher shipping rates have also been compounded by pricy workarounds, including increasing inventory, investing in more rail cars and committing additional resources to shipment management, ACC officials said in a press release.

The survey had several key findings:
• 97% of companies report modifying operations due to supply-chain issues;
• 92% of producers increased inventories of raw materials and supplies in response to challenges;
• 52% of producers curtailed production due to the inability to ship products; and
• transportation costs have increased across all modes over the past year for nearly all producers.

Companies that ship by rail claim that delays and service challenges are worse than previously reported, ACC officials said. Nearly all companies (93%) report conditions are worse or unchanged, and 43% of companies added tank cars to their fleet because of freight-rail service problems.

ACC officials are calling for legislators to adopt more concrete measures to address the supply-chain and freight-rail shipping crises through passing the Freight Rail Shipping Fair Market Act, which would strengthen the Surface Transportation Board’s authority to address rail service emergencies and require rail contracts to include service delivery standards.

"There are some positive signs most notably in ocean shipping and trucking where policymakers have taken action, but it’s clear that we still have a long way to go before we turn the corner," said ACC President and CEO Chris Jahn.