A new report from the American Chemistry Council (ACC) has found that chemical manufacturers still face supply chain challenges and freight transportation disruptions despite improving conditions.
In a survey of its member companies, ACC found that transportation-related supply chain issues improved somewhat during the second half of 2022 but continue to be worse than pre-pandemic conditions.
Emily Sanchez, Director, Economics and Data Analysis “There are signs that conditions have improved, but the transportation problems plaguing our members are far from resolved,” said Emily Sanchez, ACC director of economics and data analysis. “Marine and truck transportation have improved while poor rail service continues to be a major concern.”
The organization said for two years, its member companies have reported that supply chain and freight transportation issues have disrupted their U.S. manufacturing operations, causing lost manufacturing and customer orders and increased costs due to higher shipping rates. The result for those companies was expensive workarounds and increased inventories, the organization said.
Nearly all (93 percent) of the member companies said supply chain and freight transportation disruptions are impacting their U.S. business. In comparison, only 67 percent of companies reported supply chain and freight transportation disruptions were better in the second half of 2022. Compared to pre-pandemic conditions, 83 percent of companies said conditions are worse now. And 86 percent reported they had modified operations because of supply chain issues or transportation disruptions. In both the first and second halves of 2022, nearly 36 percent of companies said customers had canceled orders due to concerns they would not arrive or would not arrive on time.
“Most companies said that standardized first mile/last mile service reporting by railroads (73 percent) and access to reciprocal switching (77 percent) would help mitigate freight rail problems,” Jeff Sloan, senior director for regulatory and scientific affairs, said. “Many companies (75 percent) also said that increasing gross vehicle weight limits for interstate highways would help alleviate trucking capacity constraints.”
The ACC urged the Surface Transportation Board to increase competition in the rail industry through reciprocal switching and to hold railroads accountable for service failures. Additionally, the organization called on Congress to pass the Safer Highways and Increased Performance for Interstate Trucking (SHIP IT) Act to improve truck capacity by increasing the Gross Vehicle Weight.