WASHINGTON (April 13, 2023; ACC release) — Chemical manufacturers report that despite improving conditions, supply chain challenges and freight transportation disruptions continue to be a major problem for the U.S. business of chemistry and the broader economy.
According to the results of a new survey released by the American Chemistry Council (ACC), transportation-related supply chain issues moderated during the second half of 2022 but continue to be worse than conditions prior to the COVID-19 pandemic.
"There are signs that conditions have improved, but the transportation problems plaguing our members are far from resolved. Marine and truck transportation have improved while poor rail service continues to be a major concern," said Emily Sanchez, ACC Director, Economics and Data Analysis
For two years, ACC member companies have reported that supply chain and freight transportation problems are disrupting their U.S. manufacturing operations. In addition to lost manufacturing and customer orders, companies once again reported that higher shipping rates were compounded by costly workarounds, including increased inventories.
ACC has surveyed chemical companies four times since late 2021 to better understand the persistent challenges to moving freight in the U.S. by rail, truck, and water. The latest survey focused on business impacts through the second half of 2022 (H2) compared to conditions in the first half of 2022 and compared to conditions prior to the pandemic.
Chemical manufacturers observed some unwinding in supply chain kinks, but they report that conditions remain worse compared to pre-pandemic:
- Nearly all (93%) of companies say supply chain and freight transportation disruptions are impacting their US chemicals manufacturing business.
- Compared to conditions in the first half of 2022, 67% of companies reported supply chain and freight transportation disruptions were generally better in the second half of the year. Compared to conditions prior to the pandemic, however, 83% of companies say they are worse.
- Among respondents, a majority (86%) reported they modified operations because of supply chain issues and/or transportation disruptions and delays in H2.
- In both the first and second half of 2022, about 36% of companies experienced customers canceling orders because they were concerned their order would not arrive or would not arrive on time.
- Supply chain issues and transportation disruptions continue to push up transportation costs. More than half (62%) of chemical manufacturers saw costs rise over H2.