Logistics delays, high freight costs pressuring US chemical distributors - NACD

Author: Zachary Moore

2021/08/10

HOUSTON (ICIS)--Logistics delays and persistently high freight costs are putting pressure on US chemical distributors and threatening to cause shortages across the industry, Eric Byer, CEO of the National Association of Chemical Distributors (NACD) said on Monday.

“All modes of shipping are currently facing delays. Our members are reporting that ocean shipping delays are from twelve weeks to up to six months,” Byer said. “Ships are currently riding at anchor for around 1.5-2 weeks at Long Beach and truck and rail availability is limited once the containers are unloaded,” Byer added. He made his comments in an interview with ICIS.

“We think that logistics congestion is likely to remain in place for the next 12-18 months,” Byer stated.

“Ocean carriers made record profits in 2020 and the first two quarters of 2021 are indicating another year of record-breaking profits,” Byer said.

“The ongoing logistics difficulties and the resultant losses in our own and other industries are attracting the attention of the federal government. We expect an update to the Ocean Shipping Reform Act to be introduced soon and we may see joint hearings from the Federal Maritime Commission and the Surface Transportation Board to help rein in shipping cost increases,” Byer stated.

Touching on other legislative issues, Byer said that the NACD supports a robust infrastructure bill, but said that NACD would push for an infrastructure bill without the superfund tax, as the negative impacts of the superfund tax would cancel out the positive aspects of the bill.

In regards to foreign trade, Byer said, “Our industry would benefit from some relaxation of additional tariffs on China put in place during the Trump administration. Thus far, the new administration has yet to meaningfully relax these restrictions and a rollback would be a positive development for the chemical industry."

Thumbnail image shows Eric Byer, CEO of the NACD

Interview article by Zachary Moore