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U.S. chemical manufacturers said persistent, and in some cases worsening, supply chain problems hampered operations in 2021, and they are likely to continue in 2022 without policy reforms designed to ease congested supply lines, according to a report from the American Chemistry Council (ACC), released Monday.
ACC, which represents manufacturers and other companies in the U.S. chemistry industry, said the impacts of supply chain disruptions and transportation constraints are wide-ranging and occurred in all regions of the United States. The group surveyed 67 of its manufacturing members for the report.
Among the findings, 98% of companies reported modifying their operations because of supply chain and transportation issues; two-thirds reported lost production; and nearly all reported shipping delays (94%), shortages of raw materials (94%), and increased transportation costs (93%). More than a third of companies said they experienced or declared force majeure–events beyond the control of any party that make it difficult or impossible to carry out normal business–because of supply chain or freight transportation issues. Nearly all companies surveyed (93%) reported incurring additional costs into the several millions of dollars due to supply chain problems; estimates ranged from $100,000 to $250 million, with more than a third of companies reporting costs higher than $20 million.
ACC’s leaders said the problem will only become more acute in 2022 as chemical shipments are expected to make up a growing portion of marine, truck, and rail transportation.
“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, ACC’s chief economist, said in a statement announcing the survey’s findings.
“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 association is urging policy reform at the federal level to help alleviate the stress. They said efforts in the past year to extend service hours and provide additional funds for port improvements, as well as those aimed at truck driver recruitment programs, have helped but aren’t enough.
“The supply chain problems impacting our member companies simply didn’t disappear at the stroke of midnight on New Year’s Eve. Unfortunately, they will carry over well into 2022,” Chris Jahn, ACC’s president and CEO, said in the statement. “President Biden and Congress have made modest progress, but now is not the time to let up. 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.”
ACC said it is calling on Congress to pass the Ocean Shipping Reform Act of 2021, urging Congress to pass legislation to improve capacity for trucking by increasing the Gross Vehicle Weight (GVW) on federal interstates, and pushing the Surface Transportation Board to allow greater access to competitive and reliable freight rail service.