The tightened supply, increased shipment delays, and ongoing materials shortages that began in Q2 of 2020 as a result of the Covid-19 shutdowns were only exacerbated by the Texas ice storm in February. Extended lead times and escalating prices for raw materials, packaging goods, and shipping are presenting significant challenges as we head into the busier spring and summer months of 2021.
Despite these complications, we have done our best through forward-looking, strategic purchasing and sourcing to prepare ourselves for the looming gridlock of the North American chemical industry to limit, as much as possible, the disruptions our customers may face.
Our Materials Manager, David Gorrell describes the situation as “…Unprecedented times and we’re quickly learning that our vendors promised ship dates for raw materials, containers, and everything else in between are only hopeful estimates.”
“Everyone is affected,” says President Jason Lynch. “It just goes to show you how interdependent and reliant we are upon one another. We’re seeing both upstream and downstream chemical manufacturers coming up short on order volumes and delivery dates which makes it nearly impossible to know how this will play out on the large scale.
At the risk of sending everyone into a panic, we believe our best course of action is to swiftly communicate to our customers the reality of the pending situation and hope that our proactive purchasing strategy will help us all whether this material famine over the next 6 to 8 weeks.”
IN AN EMAIL FROM A REPRESENTATIVE FOR ONE OF NORTH AMERICA’S LARGEST CHEMICAL DISTRIBUTORS AND ONE OF EVERKEMS PRIMARY CHEMICAL DISTRIBUTORS, BRIAN DORENKOTT WROTE:
“I’m an old guy that has been formulating and managing in the chemical industry for over 35 years and I have never seen things this awful. In early March, we had an ‘All hands on deck meeting’ with everyone customer-facing and every product manager from each of our nearly 100 product classes.
The purpose of the meeting was to explain to us how bad things are and how bad they are going to be for some time. I am not allowed to get into the specifics of each product class, but let it suffice to say that roughly 95% of the product classes are on Force Majeure- meaning all contracts and guarantees are off.
We were experiencing this to a lesser degree due to strong demand, but the Texas freeze compounded the problem. For example, one of the large manufacturers had over 100 leaks in their water pipes, and repairs wouldn’t be completed for 60 days. Pricing is increasing so fast that we can’t even get a notice out before it’s outdated.”
As of early May, Gulf Coast manufacturing plants have come back online but supply is expected to remain constrained into the summer. As we continue to communicate with vendors and monitor the situation, we will do our best to offer insight and support as we brace ourselves for the turbulence in the chemical, sealants, and adhesives markets.
Contact your EverKem sales or account representative with any questions.
