From vessel rerouting and increased shipping costs to skills shortages and regulatory burdens, the logistics industry faces varied challenges that have a direct impact not only on the industry itself, but on the wider chemical supply chain. Tim Doggett, CEO of the Chemical Business Association (CBA) discusses the current challenges and the industry-wide initiatives seeking to address them.
Far-reaching challenges
The UK’s supply chains are facing numerous logistics issues. From the Ukraine-Russia War, to attacks in the Red Sea, the situation is causing shortages of raw materials, increased shipping costs, lengthening delivery times and reducing vessel productivity.
On the regulatory front, the UK’s departure from the EU has also caused challenges. Not only has it led to increased costs and additional bureaucracy, but it has created significant trade barriers, resulting in some UK companies moving trade lanes and their operations to the EU.
The effects of these challenges on individual companies are evident in the CBA’s most recent quarterly Supply Chain Survey, covering Q2 of 2024. It highlights member responses, whose collective operations span every corner of the supply chain.
The responses confirm the various disruptions encountered. 68% of respondents saw escalating shipping costs as an issue, meanwhile, 66% were impacted by the Red Sea disruption. Other challenges were also outlined, such as sourcing bulk materials, a shortage of ocean freight containers, and ongoing issues following Brexit.
As over 97% of all manufactured goods contain a chemical input, the impact can lead to significant difficulties, not to mention inflated prices and a shortage of some common products.
Industry-wide initiatives
Some challenges are affecting the entire chemical supply chain and associations such as the CBA, have brought the wider chemical industry together to find ways to resolve them.
As a result, industry stakeholders are collaborating on ways to mitigate the impacts and alleviate disruption. This includes the Critical Imports Council, which was set up by the Department for Business and Trade (DBT) in April 2024. This combined insight ensures that industry’s interests are considered, and timely, appropriate resolutions can be achieved.
Continual lobbying on regulations such as UK REACH, and the industry’s concerns on this with regards to the duplication of testing and resulting costs, succeeded in persuading the Department for Environment, Food & Rural Affairs, (DEFRA) to extend deadlines and consulting on an alternative model. The work remains ongoing, with associations providing ongoing updates and support to their members through tailored UK REACH training.
Meanwhile, Generation Logistics is an industry-wide initiative, supported by the Department for Transport (DfT). It involves over 40 leading industry associations and businesses and aims to bolster recruitment by raising awareness of the wide variety of roles and pathways available within the sector.
Another similar initiative, that further aims to highlight career opportunities across the supply chain, is the CBA’s Generation STEAM. Recognising the need to evolve traditional STEM thinking, STEAM adds an A for Arts also Attitude, Ability and Ambition, and is reflective of the growing need for diverse talent in an industry where advanced technologies are set to play a prominent role. It also hopes to encourage more young people into STEM subjects, making them more appealing.
For those already in the supply chain, the Future Council is a CBA initiative that facilitates collaboration, bringing together young and aspirational industry professionals with different experiences and skill sets. The Future Council routinely runs outreach days at various National education institutes, aiming to attract talent to the supply chain.
To ensure the logistics industry has a sustainable future, issues with supply disruption, skills shortages and regulations like UK REACH need to be resolved. In response, industry associations like the CBA, together with other stakeholders, are committed to working together to deliver these objectives, by implementing far-reaching initiatives and delivering vital outreach, training and skills-based activities.
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