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CHALLENGING TIMES BUSINESS • IT IS NO SECRET THAT GLOBAL CHEMICAL SUPPLY CHAINS ARE STRAINED. CBA’S LATEST QUARTERLY SURVEY IDENTIFIES JUST WHAT THAT MEANS FOR ITS MEMBERS
THE LATEST SUPPLY Chain Trends survey, carried out every quarter by the UK Chemical Business Association (CBA), identifies some extreme stresses in the sector. Some 85 per cent of CBA members surveyed report shortages of shipping containers; 90 per cent report rapidly escalating shipping costs; and 62 per cent report capacity issues with road haulage in the UK, with 76 per cent reporting similar constraints in the EU. “The current business situation has improved over the last three months, but most
UK DISTRIBUTORS ARE FACING SUPPLY CHAIN DISRUPTION AND A CHRONIC DRIVER SHORTAGE
member companies are reporting serious issues in the international supply chain resulting in significant delays, logistical gridlock, and massively increased shipping costs,” says Tim Doggett, chief executive of CBA. “This is compounded by the chronic shortage of HGV drivers aggravated by the combined impact of Brexit and Covid-19.” CBA’s online Supply Chain Trends Survey was conducted between 8 and 18 June 2021 and is based on responses from 72 member companies. BETTER OR WORSE? CBA’s Survey also followed up on the regular questions about business conditions and confidence in the chemical supply chain. Here
it asks companies to provide information on order books, sales, sales margins and employment, on a ‘better–worse–same’ basis. To measure short-term trends, the analysis ignores responses answering ‘same’ and focuses on the positive or negative balance provided by the difference between the ‘better-worse’ responses. The current survey shows a positive balance of +35 per cent in the strength of orderbooks over the past three months - an improvement of +21 per cent since the last survey in March 2021. Current sales volumes have also risen over the last three months, showing a positive balance of +43 per cent (compared to +26 per cent in March). The trend for the next three months is significantly weaker, showing a positive balance of +6 per cent - a fall of 24 per cent on the figure reported in Mach 2021, which evidently underestimated the strength of the upturn in business. Business conditions over the past year have put great pressure on sales margins but the latest survey indicates this situation may be improving. Current sales margins have moved into positive territory at +11 per cent, a survey-to-survey improvement of 39 per cent since March. Future sales margins are forecast to decline in the next three months, with a negative expectation of -15 per cent, compared to the modest optimism of +6 per cent reported in March. Finally, CBA member companies were asked if their employment levels will be higher, lower, or remain the same over the next three months. The employment trend shows a continued improvement with a positive balance of +35 per cent, slightly ahead of the +33 per cent recorded in the last quarterly survey in March 2021. CBA represents the independent chemical supply chain with a membership that includes distributors, traders, warehouse operators, along with logistics and transport companies, most of them classed as small or mediumsized enterprises (SMEs). Its distributor members have a combined annual turnover of some £2.75bn and employ more than 8,700 people distributing, packing, and blending key chemical components and services to virtually every sector of the UK economy. www.chemical.org.uk
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