2021 — The year of supply chain issues
2021 has been quite a year.
Just six days in, and we’d already grown nostalgic for the good old days of 2020. That is, after a half-dressed, painted man in a furred headdress with horns had ushered in the new year. It was a scary preview for the year to come.
And between an ever-mutating virus, stimulus checks, and the current supply chain crisis, it’s certainly been a challenge to get our jobs done, hasn’t it?
The story of those challenges is playing out on social media pages, with service pros asking for help on where they might find this part or that chemical. Someone recently looking to purchase five pallets of chlorine was told he’d have an easier time getting the same amount of cocaine. Business owners posting “help wanted” messages on Facebook are met with pictures of unicorns.
In the pool industry, finding good workers has long been a challenge, but these days, it’s harder than ever. And it’s not easy to see that particular problem resolving anytime soon.
But when it comes to the supply chain crisis, some say that there’s light at the end of the tunnel.
According to President Biden, the congestion is easing at the Los Angeles and Long Beach ports, through which 40 percent of the nation’s goods arrive. The White House helped broker agreements between labor and management at the key ports to allow 24/7 operations. Officials have also worked to make it easier for companies to offload shipping containers quickly and provide more flexibility for truck drivers. The president says that they are getting a handle on “the huge surge of goods moving through some of our biggest ports. And that has translated into shelves across our country being well-stocked.”
President Biden was especially encouraged after a recent meeting with the chief executive officers of the country’s major retailers and businesses who reported improving conditions, including the CEOs of Best Buy, Samsung North America, Qurate Retail Group, Todos Supermarket, Etsy, Mattel, CVS Health, Food Lion, Walmart, and Kroger.
“The business leaders we gathered here today represent a broad swath of American shopping: brick and mortar and online stores, national and local grocery chains, our nation's largest retailer, and makers and sellers of toys, electronics, and health supplies,” the President said.
However, not everyone is so optimistic, because the backups at the ports are far from fully resolved, and shortages persist for a wide variety of products due to an additional number of astonishing causes. Rob Handfield, director of the Supply Chain Resource Cooperative at North Carolina State University, is among those who think the glass remains half empty.
In a recent article appearing in the Anchorage Daily News, Handfield wrote, “Companies working in everything from tech (Hewlett-Packard) to cars (Ford) to clothing (Under Armour) to consumer goods (Clorox) have told stock market analysts this month that they expect shortages to persist until at least the third quarter of 2022.”
Now, with the new Omicron strain, and given that the Coronavirus pandemic and concurrent lockdowns were the apparent reasons for these shortages, resolution seems ever more uncertain.
But the port backups are only one part of the amazing confluence of events that has led to these shortages.
Within the pool and spa industry, we are looking at chlorine shortages, parts and equipment shortages, hot tub shortages, vinyl liner and fiberglass shell shortages, with attendant price increases across the board.
The price of trichlor tabs has doubled, thanks to Hurricane Laura, which helped cause a fire at a chlorine manufacturing plant that, prior to August, 2020, produced a third of the country’s most popular pool sanitizer. Subsequent hoarding only made the problem worse.
Plastics of all sorts are also in short supply, thanks also, in part, to Hurricane Laura, which affected many big Gulf Coast polymer producers, including Chevron Phillips Chemical in Texas and LyondellBasell in Louisiana. The havoc caused by Hurricane Laura shut down so many petrochemical factories that practically overnight, 15 percent of American polyethylene and polypropylene production was suspended.
Then in February, 2021, a freak storm hit Texas, with its many oil refining and chemical manufacturing facilities. When the power went out, pipes froze, and the plastic-producing chemical reactions occurring within those pipes came to a standstill, gumming up miles of plumbing. It resulted in a 12-percent reduction in US polyethylene production, with Chevron Phillips Chemical, LyondellBasell, Exxon Mobil Corp., Royal Dutch Shell Plc, Westlake Chemical Corp., and Dow Chemical Co. all struggling to resume Gulf Coast operations.
In March, 2021, the plastics supply chain (and many others) was literally dammed for six days by the grounding of one of the world’s largest container ships in the world’s busiest shipping channels, the Suez Canal.
In July, 2021, a lightning strike temporarily knocked out LyondellBasell’s polypropylene plant in Louisiana.
The industry was just starting to recover when Hurricane Ida struck the Gulf Coast in August, 2021, again damaging refineries and chemical plants.
Then in September, 2021, Tropical Storm Nicholas caused flooding.
“There isn’t one thing wrong,” said Jeremy Pafford, managing editor for the Americas at Independent Commodity Intelligence Services, which analyzes energy and chemical markets. “It’s kind of whack-a-mole — something goes wrong, it gets sorted out, then something else happens. And it’s been that way since the pandemic began.”
Now, according to Independent Commodity Intelligence Service Figures, the price of PVC has skyrocketed by 70 percent.
The price of epoxy resins utilized for coatings, adhesives, and paints has soared 170 percent. And ethylene, known as the world’s most important chemical, used in everything from packaging to antifreeze, has jumped 43 percent in the past year.
All has conspired to lower the availability and raise the prices on the materials used in the manufacturing of swimming pool equipment, hot tubs, pool liners, fiberglass shells, and more.
If it’s made of plastic, it is more expensive now.
So, what do we have to look forward to in the new year?
The more optimistic among us see a gradual easing of prices as the supply chain returns to normal and factories return to pre-disaster, pre-pandemic operations.
Thelessoptimisticenvisionacontinuing struggle that may go on indefinitely.
Our suggestion is to hold tight, preserve resources, and hope for the best.