LONDON (ICIS)–Bottlenecks continue to disrupt
chemicals production in Europe, with many
sources citing a lack of truck drivers over the
summer months as the key factor disrupting
“disastrous” supply chains.
However, a lack of drivers is not the only
issue impacting the sector.
Logistics have been described as “terrible” and
“horrible” by market participants in the
European petrochemicals industry, and the
prospect of any near-term change remains muted.
“Trucking is a disaster. It’s the holiday
season and drivers are going home. Freights
keep increasing and they cancel deliveries,
move dates etc,” said one polyethylene
terephthalate (PET) trader.
The trader acknowledged that if demand was
slow, the lack of truck availability would not
be such a concern, but this view was not
universally held across the market.
“Trucks have been horrible honestly. I work in
the US and Asia, and I have not seen such
tightness for no good reason,” said a PET
producer.
“It is not because of demand, it’s because
there is a major shortage of supply in terms of
drivers… They’ve added salt on the wound with
the new [EU] mobility package,” it added.
Transport is not just impacting PET sales. For
instance, transport is possibly one of the
largest factors effecting both the propylene
oxide (PO) spot and contract markets.
“It comes down to transport. There’s no
transport [capacity] spare, so there’s hardly
an option to do spot PO, even if we have the
material,” said one PO producer.
Another producer cited the high energy costs as
another cause for the shortage of trucks for
drivers who are self-employed or work as
contractors.
“Logistics are terrible, it’s not really
working, it’s deteriorating. It’s not because
the cost is increasing, it’s the service that
is getting worse,” a source said.
Another source pointed to a lack of both
drivers as well as spare capacity; adding to
that, it said delays on railways are recurrent.
OFF-ROAD LOGISTICS
PRESSURES
Rail-related problems
have also been widely discussed across the
market, as deferred maintenance has impacted
service on the system, and the hot weather
slows down deliveries.
Congestion on the roads is not the only issue
disrupting supply chains, with low
water levels on the Rhine meaning barges
will not be able to carry as much cargo, making
this alternative less viable as a substitute
for trucks.
Chemicals companies have heavily invested in
designing barges that can cope with this issue,
but any solutions are not yet at a place which
can cope with the high volumes of traffic.
Ports have also come under pressure on the
labour side, as port
and dock workers recently took strike
action for higher pay, which could also
slow unloading times down or put further
pressures on costs in the long term.
There is still quite a lot of traffic for
barges and terminals, with one methanol
producer highlighting the impact of this on the
industry.
“It was extremely busy, and still is. I think
there was a rather big backlog which has
improved a little, but for how long I do not
know,” said one source at a shipping terminal.
“It is not only methanol that is pretty active.
Other products, like ethanol and styrene are
going crazy.
“I have been in the business for 37 years. What
I have seen in the last couple of weeks, I have
not seen before, and I am not sure how long it
will take to resolve,” the source concluded.
Front page picture: Containers at the
logistics hub in Duisburg, Germany
Source: Sergii
Kharchenko/NurPhoto/Shutterstock
Focus article by Morgan
Condon
Additional reporting by Zubair Adam,
Eashani Chavda, Caroline Murray, Nazif Nazmul,
Nicole Simpson, and Nel Weddle
