The chemical industry faces challenges such as volatile raw material prices, shortages, supply chain disruption, and more.

The chemicals industry is one of the most important sectors, with 96 percent of all manufactured goods depending on them. With many moving parts and various stakeholders involved in the chemical supply chain, there are several challenges this industry faces. Here are some of the biggest challenges affecting the chemical industry.

CHEMICAL INDUSTRY CHALLENGES

MANAGING RAW MATERIALS

The chemical industry, specifically chemical manufacturing, relies heavily on raw materials. Raw material prices, such as those for crude oil, are volatile and can fluctuate at any given time. This can make it difficult to forecast costs and budget and, keep prices competitive.

Keeping an adequate supply of these materials can be an additional challenge. Having too much inventory can potentially lead to chemical waste or spoilage while too little can make it difficult to meet customer demand.

TRANSPORTATION DISRUPTIONS

Chemical industry supply chains can be long and complex. They have many moving parts, making the transportation of chemical products a challenge. If you add in transportation disruptions, it makes it even more problematic.

While transportation disruptions usually occur at some point, in recent years, there’s been a lot of supply chain disruption caused by the onset of Covid-19.

According to a survey by the American Chemistry Council, 97 percent of companies reported having to change to their operations due to supply chain issues in recent years. Because of this, the chemical industry must stay on the tip of its toes and be able to adapt quickly whenever disruption may happen.

Also, global supply chains see the most impact from transportation disruptions. The chemical industry has more global supply chains than other industries, making this challenge more difficult.

REGULATIONS

Chemical products are often specialized and need specific storage and handling. In addition, they face strict regulations on the transport of their products, especially hazardous materials. These regulations are necessary to have in place to protect the environment and people.

In recent years, several high-profile incidents have involved the release of hazardous chemicals into the environment. This has caused governments to introduce more strict regulations. As a result, this has increased the costs for chemical companies to operate. It’s been estimated that chemical companies will have to spend more than $300 billion over the next few years to meet regulations.

The chemical industry must be more vigilant than ever to remain compliant. These increased regulations put more pressure on chemical companies already trying to meet global standards.

The chemical industry has to work with many different regulations and agencies, such as;

LARGE AMOUNTS OF DATA

The chemical industry handles a lot of data. All manufacturing and operational data must be recorded, categorized, and processed. It’s estimated that chemical companies handle up to;

This massive amount of data can be a challenge, especially with supply chain management.

COMPLEX SUPPLY CHAINS

The chemical industry is a complex one. It can include various kinds of chemical processes with products in all forms, from raw to intermediate, to finished goods. There are also many stakeholders involved, from chemical manufacturers to distributors.

Additionally, chemical products are often required to have very specific characteristics with little to no room for variations. Chemical companies also handle more complex items, like hazmat or temperature-controlled. Chemical supply chains are often worldwide, making them much more complex than other industries.

LACK OF VISIBILITY

Due to its complexity, lack of visibility can be a challenge for chemical supply chains. It can be difficult for chemical suppliers to know their inventory levels or how products are being used. Therefore, it’s important for chemical companies to have an accurate picture of their inventory and supply chain. Improved visibility can provide insight into opportunities to reduce costs without sacrificing quality.

CLIMATE CHANGE

The chemical industry is one of the top contributors to global carbon emissions. As the world becomes more concerned about climate change and sustainability, there’s more pressure added onto chemical companies that already face strict regulations.

There’s also a growing demand from consumers for more green and ethical products. For example, many companies are having to find alternative solutions for plastic or use recycled materials.

To keep up with the ever-changing market and demand, chemical companies need to change their processes. They must find ways to create less waste and more products that help reduce their environmental impact.

Also, as the planet warms, more severe weather is taking place. This is causing more disruptions to chemical industry processes. Whether causing a halt in transportation or a shortage of oil, climate change presents several challenges for the chemical industry.

OVERCOMING CHEMICAL INDUSTRY CHALLENGES

The chemical industry can be a tough market to compete in. To overcome these challenges, chemical companies need to remain resilient and competitive. As the world and market continue to change, they need to be able to adapt.

Finding like-minded, expert partners with applicable technology is ideal to overcome these challenges. A third-party logistics (3PL) company, like Trinity Logistics, is one such resource.

Trinity Logistics has been in business for over 40 years and has worked with chemical companies of all sizes. Trinity is a trusted partner to help chemical companies better navigate their complex supply chains. We’re well-versed in the chemical industry and can help find a quality carrier for your shipment or offer improved visibility through our customized technology solutions.

When choosing to work with Trinity, our Team Member experts keep you up to date on industry news, upcoming regulation changes, or any other relevant information your business needs to stay successful.

Additionally, we’re a Responsible Care certified partner, meaning we’re committed to providing you with the best service for your logistics and transportation management while staying committed to sustainability practices.

At Trinity Logistics, we’re not your typical 3PL. We’re invested in your business and are here to help your business succeed. If you’re looking for a like-minded logistics partner to help you overcome some of your industry’s challenges, we’re here and ready to help.

SEE HOW TRINITY CAN HELP YOUR CHEMICAL BUSINESS

Chemical manufacturers collect and use a lot of data in their supply chain. They deal with data on their products, customers, transportation, storage, operations and more. Acquiring that data is not hard but managing and utilizing that information to be able to analyze your business is the challenge. Taking advantage of a Managed Services solution can assist in better managing and using your data in your chemical supply chain.

Managed Services

Managed Services is when you outsource your freight and logistics processes to a third-party logistics (3PL) provider, such as Trinity Logistics. You can find ways to manage your data in one place using a 3PL’s Transportation Management System (TMS). By better managing, using, and analyzing your data, an organization can reduce costs, improve margins, generate revenue, and make smarter business decisions. How does a TMS offer you all this?

Supply Chain Visibility

A TMS can provide visibility into your supply chain data in many ways. Best-in-class TMS’s, such as Trinity Logistics’, can provide better insight into your logistics processes.

Executives can combine this improved visibility with robust reporting to help guide their decision making. You can also provide system access to your outside supply chain members such as suppliers, carriers, and vendors. Each partner can better plan for their part, having the potential to reduce expensive production costs, limit excessive accessorial charges, and improve customer service.

Freight spend visibility has many benefits within itself. By analyzing freight spend by lane, companies can learn which of their lanes are not profitable based on transportation costs. Identifying company-wide shipment volumes and rates can provide you leverage when negotiating your carrier contracts.

Reporting & Analyzing

Not all TMS’s can generate the reporting you may need. Most generate basic reports that summarize your transportation information. Examples of basic reports include freight spend totals, shipment statuses, and shipment volume reports. But a best-in-class TMS can generate advanced reports that go into specific logistics metrics. Advanced reports can include accountability, analyzed freight spend, lane analysis, and carrier performance to name a few. The reports are dynamic, and you can filter, summarize, or graph information based on what you want to see.

The above-mentioned offers:

Accountability Reports

Accountability reports offer companies the opportunity to hold core members of their supply chain accountable for controlling costs. For example, with carriers you can view costs of carriers used, late fees accrued, any unnecessary detention charges and more.

Analyzed Freight Spend Reports

Analyzed freight spend reports allow a company to track their freight spend based on parameters. Having the ability to track it in this way ensures that potential causes of lost profits are identified and addressed right away.

Lane Analysis Reports

Analyze changes in rates by lane and predict trends in your freight costs with a lane analysis report. You can prepare for changes up front or try to prevent them altogether through carrier rate negotiations.

Carrier Performance Reports

Carrier performance reports can help you identify which carriers are best meeting your transportation needs.

Reports are an important tool to use to find areas of successes and setbacks. Once identified, companies can take advantage of this information by adjusting their practices. They can find ways to create more successes and overcome shown setbacks. Yet, most companies don’t have the technology needed to analyze their processes in such a manner. Money is often wasted on unknown and unnecessary expenses.

Quarterly Business Reviews

When choosing to work with Trinity’s Managed Services team, you gain a relationship with a specialist. Our Team analyzes, produces, and presents Quarterly Business Reviews (QBR), making it easier for you to digest your data. We help you understand what is working, what is not, and what can be done to further escalate your company’s growth.

The importance of data doesn’t revolve around how much data you have, but what you do with it. Managing and analyzing your data effectively is what will take your chemical company even farther. Take it from one of our largest chemical customers, Albaugh;

““We have had tremendous growth over the last 3-4 years. This would not have been possible without the level of service and expertise Trinity Logistics provides. They are a true strategic partner in a very dynamic environment.”

Click here to read our case study on how Managed Services helped Albaugh with their growth.

When you combine your data with our Managed Services solutions, you can,

Do you want to see what you will find when you manage and analyze your data with Trinity Logistics?

Start your free consultation.

Trinity Logistics is always looking to grow our company, our brand presence, and most importantly, our knowledge within our focus industries; chemical being one of them. We find being involved with industry associations helps keep us in tune with current challenges our customers may be facing while giving us new opportunities to connect. Recently, we came across NACD and thought it a perfect fit for Trinity.

What Is NACD?

NACD stands for the National Association of Chemical Distributors. It is an international association, established in 1971. It is made up of chemical distributors (called members) and their supply-chain partners (affiliates), like Trinity Logistics.

There are nearly 450 member and affiliate companies of NACD. They represent more than 85% of the chemical distribution capacity in the nation and 90% of the industry’s gross revenue.

Why It’s A Great Organization For Chemical Manufacturers

Becoming an NACD member provides many benefits to chemical manufacturers. You gain access to educational programs, important industry data, and networking with current or potential customers and supply chain partners. You also gain access to their list of “Responsible Distributors”, which can help you ensure your products are handled safely throughout the supply chain.

What Is Responsible Distribution?

In 1991, members of NACD created Responsible Distribution. Responsible Distribution is a mandatory third-party verified environmental, health, safety, and security program. It lets their members show their commitment to improvement in all phases of chemical storage, handling, transportation, and disposal.

Why NACD Made Sense For Trinity

As a supply chain partner and service provider, we are always looking for ways to better support our customers. We also want to continue learning and growing while networking. Striving to be our best is just something Trinity does.

NACD fits those objectives while aligning with our company culture. Learning about their Responsible Distribution program further solidified our decision to join. Since Trinity has been Responsible Care certified since 2009, gaining the opportunity to connect with like-minded companies that keep to similar standards of improvement made sense.

We are excited to be a new affiliate of NACD and to have the opportunity to connect with more members of the chemical industry.

Keep an eye out for NACD’s upcoming August edition of their magazine, Chemical Distributor. One of Trinity Logistics’ articles will be featured, written here by yours truly!

Interested in learning more about NACD and how to become a member? Join NACD

Ready to network with us and see how we can be your best supply chain partner? Request a quote

The chemical industry adheres to strict regulations with their products. With those regulations can come recalls and audits. To stay ahead of those headaches, traceability is needed in the supply chain for chemical manufacturers. Gaining traceability can help prevent possible recalls and offer preparedness for audits, while bringing many other benefits.

Shared Data

To get the greatest benefit from supply chain traceability, data needs to be easily shared across supply chain partners. The use of technology for end-to-end supply chain traceability is vital for recording and exchanging data with all. Having transparency amongst all supply chain partners brings accountability and trust.

Replace Manual Processes

Even today, a lot of traceability processes are still manual. It often takes contacting many individuals through phone or email to get the information you need. Using technology for traceability in the supply chain helps eliminate those manual processes. With current technology, you can find the information you need in minutes with one application.

Improve Customer Service

With all supply chain partners having transparency, there is great potential for customer service to be improved. Distributors can better manage their delivery times, improving communication and customer satisfaction. Retailers can provide consumers with access to product information, building loyalty and relationships. Shippers can see shipment activity and schedule heavy or light volumes, creating happier transportation partners. From end to end of the chain, it improves consumer satisfaction.

Quick Problem Solving

Traceability allows you to be more proactive should you need to cancel an order, stop a production cycle, have products re-inspected, etc. It gives you the opportunity to quickly detect problems and deliver greater service by providing solutions and visible communication right away.

Better Stock Management

Easily meet customer demand by knowing what is going on within your supply chain. Tracking and tracing shipments and orders leads to more efficient stock management. With better management brings the potential for costs savings.

Traceability With TMS

Transportation Management Systems (TMS) are one of the technologies available to gain traceability in your supply chain. They allow function and resources for all supply chain stakeholders. To reduce cost, working with a third-party logistics (3PL), such as Trinity Logistics, can give you access to their TMS technology, as well as their experience in supply chain solutions.

Looking to learn more about TMS? Click here to read our Guide on TMS.

Creating a connected supply chain adds value and strengthens those relationships with all stakeholders. It makes a company more desirable to work with and to buy from. The smallest of details can make a difference in the success of a company. Traceability is one of those finer details in your chemical supply chain that you can’t be without.

If you’re ready to make a move towards having traceability in your supply chain, connect with us and find your solution.

Find your solution

The word “chemical” may sound a little scary. But it covers many different items, including some items in your kitchen or bathroom cabinets. When people talk about the challenges of chemical shipping, they’re often talking about materials that need special care. These might include materials that could explode, ignite, emit toxic gases, or cause serious harm if not handled in a safe manner.

There are many safety rules to keep hazardous chemicals from spilling or leaking. Anyone who transports or stores hazardous chemicals must understand how to handle those types of products. If a company or person violates certain rules, they may come face to face with civil and criminal penalties and thousands of dollars’ worth of fines. This chemical safety stuff is no joke! So, what could happen if chemicals aren’t stored and shipped properly?

What Could Happen

If rules and regulations for chemical storage and shipment aren’t upheld, a dangerous situation could occur. In February 2014, a facility near Carlsbad, New Mexico experienced an impactful issue.

An issue occurred at the Waste Isolation Pilot Plant facility that was responsible for storing waste from the making of plutonium bombs. This operation was a result of a clean-up effort of old nuclear weapon manufacturing sites. A storage drum containing plutonium waste broke open because of improper packaging. This resulted in waste being sprayed into the air and 22 employees were exposed to small amounts of radiation.

The incident ended with the closure of the New Mexico repository. Investigation of the Los Alamos National Laboratory also occurred. This was where the plutonium waste was being packaged in a way that led to the occurrence.

Storing Chemicals

There are a lot of rules and regulations when it comes to storing chemical materials. One wrong thing and you could literally have an explosion on your hands. To protect the environment and people that work where hazardous materials are being stored and used, containment is important. This is to prevent contamination.

Regulations are created at the state and federal levels to help prevent incidents from happening while chemicals are being stored and moved across the country. The Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), the Department of Transportation (DOT), and other agencies all have specific requirements for handling chemicals.

Douglas Brown, of Brown Chemical Company in Oakland, NJ states that his company must interface with nine different agencies just to open the doors every day. Along with OSHA, DOT, and EPA, those agencies include the Food and Drug Administration (FDA), U.S. Customs and Border Protection, the Drug Enforcement Agency (DEA), the Transportation Safety Administration (TSA), and the FBI.

There are also safety steps companies enforce to prevent spills, leaks, and injuries. Some safety rules include forklift speed limits, passageway traffic rules, and safety training. Other safety measures could be:

Other typical storage considerations may include temperature, ignition control, ventilation, segregation, and identification. There are even special types of equipment that should be used in these environments. For example, EE-rated non-spark equipment prevent any spark from igniting a vapor or gas. In addition, special padding and static guard helps to ensure electrical equipment doesn’t set off accidents. All proper storage information is on Safety Data Sheets (SDS). An SDS must be on hand for every hazardous chemical in your workplace.

Shipping Chemicals

There are extra requirements that the Federal Motor Carrier Safety Administration (FMCSA) and DOT track to make sure shippers are compliant when transporting chemical materials. In order for a carrier to haul a chemical load that contains hazardous materials, both the driver assigned to the truck must have a hazmat certificate on their CDL and the carrier must have a hazmat certificate registered with DOT. Before shipping chemicals, a best practice would be to vet common carriers to be sure they have the above requirements. Using a third-party logistics company like Trinity will give you peace of mind when trying to get this information.

Our Carrier Compliance Team monitors carrier certificates and ensures trucking companies and drivers adhere to these requirements before arranging a chemical load. This provides the best possible safety and lessens the risk for shippers.

Responsible Care® partnership is also something to consider when shipping chemical products. This is the chemical manufacturing industry’s environmental, health, safety, and security performance initiatives. Trinity is a proud Responsible Care® partner and is committed to following the program through endorsing their guiding principles; measuring and publicly reporting our performance on an annual basis; implementing the Responsible Care Product Safety Code, Process Safety Code and Security Code; implementing the Responsible Care Management System ® to achieve and verify results; and obtaining independent certification that a management system is in place and functions according to professional specifications.

Another thing to consider with chemical shipping is capacity. Capacity is already an issue because of the driver shortage. But in the chemical industry, shipments often involve regional trips. These long-distance hauls can be unattractive to drivers. Finding tanker trucks for bulk chemical shipments proves especially tough.

Using a third-party broker like Trinity Logistics, will help take the guess work out of shipping your chemical materials. 

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Originally published August 16, 2018. Updated by Christine Griffith.