Supply Chain Issues Have Hurt the U.S. Chemical Manufacturing Sector

Supply Chain Issues Have Hurt the U.S. Chemical Manufacturing Sector

Time Stamp: April 14, 2023 4:02 PM
Source Node: 2583749

Nearly all U.S. chemical manufacturers were impacted by supply chain disruptions, and a huge majority had to modify operations as a result, in the second half of 2022, according to a new report from the American Chemistry Council (ACC). The report, based on a January 2023 survey of 76 chemical manufacturers, found that 93% of companies claim freight transportation and supply chain disruptions affected their U.S. chemical manufacturing business during Q3 and Q4 2022, with 86% reporting they had to modify operations due to supply chain issues and/or freight transportation problems.

In the same period, 67% of companies reported supply chain and freight transportation disruptions, an improvement compared to the first half of 2022. Still, 83% of businesses said conditions in the second half of 2022 were worse than they were before the beginning of the COVID-19 Pandemic.

According to the “Supply Chain & Freight Transportation Challenges in Chemical Manufacturing” survey, half the responders said they are feeling minor impacts from the disruptions while the other half say they feel a moderate impact. A few organizations have even stated they are dealing with “severe impacts.”

The study also noted that supply chain issues and transportation disruptions have led to an increase in overall transportation costs. In fact, over 62% of chemical manufacturers reported a rise in shipping costs during the second half of 2022.

Companies believe more action needs to be taken by U.S. policymakers to assist with transportation and supply chain problems, the report's authors said. To help enact change, the ACC called on the Surface Transportation Board of the United States to increase competition in the rail industry through reciprocal switching, which will allow certain rail customers to request their freight be moved to another major railroad when reasonably accessible. Beyond that, the ACC hopes to establish minimum service standards to hold companies accountable for potential service failures.

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