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Industry News

NACD Releases New Data on Severity of Ocean Shipping Crisis

National Association of Chemical Distributors
July 14, 2021

ARLINGTON, VA – The National Association of Chemical Distributors (NACD) recently released new data on the severity of the maritime shipping crisis facing NACD members and shippers throughout the United States. The June 2021 survey, which follows similar research from March, shows that delays and costs associated with shipping have continued to rise dramatically over the last three months.

“This data is worse than we could have ever imagined and should concern every stakeholder in the U.S. supply chain,” said NACD President and CEO Eric R. Byer. “The state of shipping as it sits currently is not sustainable. Costs to consumers are already rising, and soon businesses will be forced to close their doors – if they have not already. Increased competition in ocean shipping and greater oversight and enforcement of rate increases are vital to remedying the situation. We welcome the Biden’s Administration’s focus on this critical issue and hope it will spur the Surface Transportation Board and the Federal Maritime Commission to enforce against excessive rates that we are currently seeing at historic levels.”

As previously reported, chemical inventories have been falling, with 84.5% of companies nationwide now reporting being out of stock of at least some imported products, up from 46.6% in March. An additional 7.1% of surveyed members reported being close to running out of stock, meaning nearly 92% will soon be suffering from shortages. With increased demand for shipping as the holiday season approaches, these shortages are likely to get worse before the year ends.

Delays in shipping have also continued to worsen, with 82.1% of respondents reporting average delays of more than 11 days, and the longest reported delay being in excess of 180 days. The average length of the longest delay that respondents had experienced was nearly 61.5 days, 15 days longer than in March. Half of companies now report delays greater than two months.

Despite the decline in reliability, the cost of shipping continues to rise. Previously, 55% of respondents reported being charged additional premiums by carriers beyond tariffs and contract rates. Now a whopping 61 of the 84 respondents, or 72.6%, report paying these premiums.

The survey was administered by John Dunham & Associates in June 2021. 84 responses were collected, meaning that the survey is significant within a range of +/-9.0 percent. A memorandum detailing the full results of the survey can be found here.

KEYWORDS: Distributors

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