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Help NACD End the Supply Chain Crisis

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Last updated 11:00 a.m. (ET), November 24, 2021

From the beginning of the COVID-19 pandemic, there has been an immense strain on the chemical distribution supply chain. Ports across the U.S. continue to suffer from severe congestion causing cargo ships to experience significant delays in unloading cargo and, ultimately, delivering product in a reasonable time.

While the supply chain snapped, ocean carriers had their best year yet. How are ocean carriers achieving record-breaking profits? By taking advantage of small businesses amid a global pandemic. To understand how these unjust policies impact NACD members and Affiliates, in March and June, we surveyed our membership about the shipping crisis.

Shipping Statistics

Data was reported on July 9, 2021, via our NACD June Member Survey.

Key Takeaways:

  • 84.5% companies out of stock of at least some imported product
  • 82.1% of respondents reporting average delays of eleven or more days
  • 72.6% reporting being charged additional premiums by carriers beyond tariffs and contract rates
  • 89.3% of respondents reported losses and half of those are above $100,000
  • 166% rise in shipping costs in the last three months

When NACD surveyed our members to understand the severity of this crisis better, we were shocked at the results. Above all, the data demonstrated that what began as a shortage of shipping containers and labor at certain West Coast port facilities had fast morphed into a dangerous breakdown of the nation’s supply chain infrastructure.

Since discovering how these shady business practices impact our membership, NACD has called on the Federal Maritime Commission (FMC) to hold ocean carriers accountable for their unethical action.

Additionally, NACD wrote to the World Shipping Council asking them to urge their members to cease these abusive actions immediately. Here are other action items NACD has recommended:

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It’s not just an issue for the supply chain. The entire shipping crisis impacts consumers, too. “Delays and price increases don’t only mean inconvenience and lost revenues, they also mean higher consumer prices and the potential for shortages of the inputs that go into some of our most critical industrial and consumer goods,” said NACD President and CEO Eric R. Byer. “Longer transit times and frequent delays have a huge ripple effect on the overall economy, with enormous cost ramifications that threaten to drive smaller companies out of business and make America less competitive in the global marketplace.”

Without intervention, the chemicals that our national infrastructure relies on are at risk of running out. The products NACD member companies import are an important part of the American economy and a critical component of American manufacturing. But for over a year, ocean carriers have made importing increasingly difficult. Ocean carriers have been violating contract terms and dishonoring reservations, even when companies have paid the carriers’ excessive premium rates.

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Businesses like yours have suffered under the conditions at ocean ports with little or no recourse. To stop the greed of ocean carriers, we need your help! We urge you to share your shipping difficulties directly with the Federal Maritime Commission (FMC). The more examples and data we can share with the FMC, the more powerful the industry’s message becomes. NACD has prepared a template for members to use to communicate their stories to the FMC. This template offers a general structure and guidelines for members to follow when detailing their experiences.

Additionally, ask your representatives to co-sponsor the Ocean Shipping Reform Act of 2021. After months of unsustainable conditions at ports, Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD) have introduced the bipartisan Ocean Shipping Reform Act of 2021. This bill will be the first major update to federal law on global shipping since 1998 and aims to address the unfair playing field in which ocean shippers have been forced to operate. Belaboring this issue any longer will result in shortages in critical chemicals across the U.S. We must get a bill through Congress now.

Finally, July 28 marked the first meeting of NACD’s Shipping Task Force. During the meeting, members discussed issues they encounter when shipping goods and the different strategies they have used to reduce some of the problems. We welcome more participants to join the task force, especially those representing smaller companies. It is important to understand how the shipping crisis is impacting all our members so we can better represent you on Capitol Hill. Interested to be a part of this task force? Contact Lucinda Schofer.

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If you have been affected by excessive shipping delays, please let NACD know the extent of the impact by contacting NACD Director of Communications Aileen Smith at asmith@nacd.com.

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Ask Your Representatives to Co-Sponsor the Ocean Shipping Reform Act of 2021.