Chemical manufacturers in the United States reported that supply chain disruptions are persisting and in some cases worsening, causing companies to incur significant expenses in shipping delays and lost business, according to a survey conducted by the American Chemistry Council late last year.
The trade group predicted that the problems will continue well into 2022 and called for federal government action to alleviate the situation as it announced survey results on Monday.
“Our industry forecasts for 2022 anticipate significant growth in chemical production and shipments, which heightens the urgency for untangling ongoing supply chain issues,” Martha Moore, the council’s chief economist, said in a news release. “Our member companies have made it very clear that widespread problems across all modes of transportation created an unwelcome and very disruptive environment for chemical manufacturers.”
The council, which is based in Washington, D.C., represents suppliers of lubricant additives as well as other types of chemicals. It conducted the survey in November and December and received responses from approximately 70 companies, a spokesman said.
Survey results showed the vast majority of respondents suffering significant impacts from supply disruptions, which stem mostly from lockdown measures imposed by governments as they tried to contain the COVID-19 pandemic plus labor shortages caused by workers getting sick or choosing to stay away from jobs.
Ninety-eight percent of participating companies said they modified operations because of supply chain or transportation problems. Ninety-four percent reported shortages of raw materials, and an equal portion reported shipping delays. Two-thirds reported lost production because of those problems, and 93% reported that their transportation costs had increased.
More than a third of respondents declared force majeure during the past year because of supply chain disruptions or experienced such a declaration by a business partner. Ninety-three percent of companies reported incurring costs of at least several million dollars from supply chain disruptions or transportation delays, and a third of respondents reported those expenses totaling more than $20 million.
ACC officials said President Joseph Biden’s administration has taken a number of actions that have helped address the situation, but they warned that the problems will continue if further actions are not taken.
“The supply chain problems impacting our member companies simply didn’t disappear at the stroke of midnight on New Year’s Eve,” ACC President and CEO Chris Jahn said. “Unfortunately, they will carry over well into 2022. “To put these systemic supply chain problems behind us, we must continue to move forward on additional policy reforms that will unlock the full capability of the entire freight transportation network.”
Among the actions that the council urged are passage of the proposed Ocean Shipping Reform Act of 2021, loosening of gross vehicle weight limits on federal interstates and adoption of reforms aimed at encouraging competition for rail transportation. The full report about the American Chemistry Council’s survey can be viewed here.