Global “perfect storm” causing raw materials shortage

Right now, the entire coatings industry is still feeling the effects of a global raw materials shortage which some called the sector’s worst supply crisis for almost a quarter of a century.

So, what has caused this? Brexit? The pandemic? Some other global supply chain disasters?

Actually, all of the above. In fact, it has been labelled the “perfect storm” for curtailing the supply of raw materials around the world.

And while we are now starting to see some of those critical issues ease, the situation is further impacted by the much-publicised commercial driver shortage, creating yet more headaches in the UK’s supply chains.

Here’s just a snapshot of some of the other issues continuing to affect supplies:

Over 40 incidents of “force majeure” have been declared this year already. The main culprits have been freak weather in Texas causing a shutdown together with a fire at a major European plant, the impacts of these are still being felt.

Covid-19 – Lockdowns and factory shutdowns have impacted, with a third wave looking likely to create more problems.

Unprecedented global demand – While some parts of the world are locking down again, others are starting to open up, leading to strong consumer demand. Some countries, like China, governments have not re-opened certain areas of the economy for export, meaning raw materials stay put.

Shipping – Lack of, and cost of, shipping containers, partly linked to the pandemic.

Brexit – Delays at ports in Europe and UK also are still causing delays and congestion, with some hauliers still avoiding making trips to the UK, especially in the case of consolidated shipments.

Oil prices – which have increased globally.

Maintenance – Planned maintenance shutdowns at factories have been hitting at the same time as all the other issues cited above.

These shortages affect a wide range of raw materials. Previously solvents and resins were the most common in short supply, however, we are now witnessing growing problems accessing pigments and packaging materials together with global shortages of pulp and polymers.

In all, there are over 30 different raw materials with decreased availability – however, the signs are these are now improving.

Unfortunately, this “perfect storm” hit the UK at a time when demand is at a record high from the manufacturing and engineering sectors. It’s not just coatings that are suffering. Across the board manufacturers and wholesalers are struggling to source materials and goods for the tradespeople they serve.

Our own trade association, the British Coatings Federation, recently found that, in addition to problems in the paint supply chain, its ink members were also finding it hard to source raw materials, while associate members including both raw materials suppliers, chemical distributors and packaging manufacturers were struggling.

Here at Trimite, we spotted this issue early on. For months now we have been hard at work scouring the world for raw materials and having regular calls and meetings with both existing and new suppliers to source what we need.

We will also continue to do what we have always done: strive to manage costs wherever possible, continually working on efficiencies in our business to ensure a robust supply chain to deliver an uninterrupted supply of high-quality products and services to our customers.

In addition to speaking to suppliers, we are closely monitoring activities of the BCF, which has been working with the Chemical Industries Association which itself is keeping the Department of Business informed on the ongoing crisis.

So, the big question is, how long will this last? Based on what our trade association says, it’s unlikely that we’ll see any improvement until Q4 this year, and there are fears it could carry on into 2022.

Rest assured at Trimite we are completely customer focused and will do everything possible to be open and transparent and provide the best, most cost-efficient and effective services we can.

By Sharon Harrison, Marketing Director