Supply Chain Crisis

The View from Chemical Distributors

Photo: luamduan, iStock/Getty Images Plus, via Getty Images

By the National Association of Chemical Distributors, Arlington, VA

From the beginning of the COVID-19 pandemic, there has been an immense strain on the chemical distribution supply chain. Ports across the U.S. continue to suffer from severe congestion, causing cargo ships to experience significant delays in unloading cargo and, ultimately, delivering product in a reasonable time.

More recently, NACD members have encountered severe delays, skyrocketing costs and outright order rejections. Chemical distributors are an integral part of the chemical sector and the entire U.S. manufacturing supply chain because of the essential services and products they provide. The crisis and its impacts on chemical distributors in particular are having an effect on a diverse range of industries, including paints and coatings, putting Americans at jeopardy of having insufficient access to clean water, inadequate medical and medicinal supplies, limited food production and preservation capabilities, and more.

To better understand how the shipping crisis is impacting NACD members and affiliates, we began surveying our membership. Here’s what we found from our most recent member survey:

Shipping Statistics

Data was reported on July 9, 2021, via our NACD June Member Survey.*

Key Takeaways:

• Companies out of stock of at least some imported product: 84.5%

• Respondents reporting average delays of 11 or more days: 82.1%

• Half of companies now report delays greater than two months

• Companies reporting increased shipping costs: 97.6% (meaning that nearly the entire industry has now been impacted)

• Distributors reporting being charged additional premiums by carriers beyond tariffs and contract rates: 72.6%

• Distributors reporting additional demurrage charges: 47.7%

• Companies reporting revenue losses: 89.3%

• More than half of those reporting losses report losing more than $100,000 in revenue

• Rise in shipping costs in the last three months: 166%

*84 responses were collected. The survey is significant with a range of +/- 9.0 percent.