Rubber Industry Supply Chain Disruptions By Liz Stevens, contributing writer, Inside Rubber
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s 2022 gets underway, rubber processors are facing enormous pressures. An increased demand for their products is crashing head-on into the lingering worker shortage and a crippling supply chain crunch. Processors have struggled to find trained workers during a period when fewer workers are seeking manufacturing jobs. Add to that the current tight material supply and rising prices, logistics madness and a booming market for products, and it is no surprise that processors are lying awake at night, wondering how to meet these challenges.
How Did the Supply Chain Jam Transpire?
The rubber supply chain quagmire stems from several factors. Prices for imported rubber and ingredients already had risen in 2018 due to the Trump Administration’s trade and tariff wars. Then COVID-19 hit, sending shock waves that resulted in factory slowdowns or shutdowns in China that spread to the US and the rest of the world. The start of the COVID-19 crush affected rubber and polymer suppliers but not in the ways that the suppliers expected. In the Spring of 2020, suppliers faced an entirely new and unpredictable future; many (or maybe most) of them feared that the entire US economy would shut down due to the dramatic “shelter in place” orders issued in many states. Suppliers scrambled to sell what stock they had on hand and then radically cut their production. But, at the start of the summer, suppliers were shocked by the unexpected: Consumer demand surged rather than tanking. The pandemic caused a surge in demand for medical-oriented products like ventilators, rubber gloves, PPE and coronavirus test kits. But the scope of the demand surge was much more widespread than this – nervous citizens began buying up all sorts of household supplies. Then, with the pandemic hobbling activities and travel, home-bound Americans began a consumables and home improvement shopping spree that upped traffic along global trade routes.
At the start of 2021, when rubber and ingredient suppliers thought that the balance of demand and supply finally had evened out, along came unprecedented winter storms in the US. A calamitous deep freeze in Texas crippled petrochemical plants and polymers were once again in short supply. The still surging import traffic flow then was hit by a whammy as cargo shipping was upended after the ship Ever Given wedged itself in the Suez Canal. Meanwhile, the US consumer buying spree continued and the incoming goods – on ships finally able to navigate the Suez Canal – began overwhelming US ports, rail transport and trucking, all of which also impacted the import and delivery of rubber and ingredients to manufacturers. As of January 2022, the Omicron variant of COVID-19 began blanketing the nation with skyrocketing contagiousness but milder disease than the Delta variant. And everyone, in every industry, in every nation, was waiting to see what would happen next. page 16 u
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