Shippers have many questions around every market, but resin is a hot commodity that brings about its own questions. How did the resin market perform last year amid congesting and operational issues worldwide? How will the resin market move forward as port congestion and terminal issues finally appearing to ease? We take a look at these questions and more in this blog post.
The Logistical Position
Despite increasing their capacity, U.S. chemical and plastics manufacturers struggled to reach overseas markets last year due to rising shipping costs, port congestion, equipment shortages, and capacity constraints.
Volume in 13 of the top 20 export markets declined in 2021, with seven of those countries registering double-digit percentage drops. The steepest declines were recorded in Malaysia (29.7 percent) and China (21.1 percent), the largest importer of U.S.-made chemicals and plastics. Those declines were partially offset, however, by double-digit percentage increases in exports to Belgium (11.6 percent) and Brazil (16.1 percent), the second and third-largest U.S. chemical export markets, respectively, per Paul Bartlett’s findings from Seatrade Maritime News.
Exporters and resin shippers also faced difficulties in obtaining export reservations, as carriers continue to prioritize returning empty containers to Asia. Shippers exported an average of 1.6 billion pounds of resin per month from October to February, but in a “normal” operating environment, U.S. shippers export up to 2 billion pounds per month.
Falling domestic prices will make U.S. resins more attractive to overseas customers, especially when operational problems and delays cease. The latest news of such problems, delays, and port congestion continues to give hope to each party in the supply chain ane make a positive impact, signaling that the market is moving in the right direction.
The congestion in ports has started to ease gradually and the chances for exporters to find reservations and load at more competitive prices will increase. Undoubtedly, this situation, together with the situation in the domestic market where prices are falling, will lead U.S. exporters to find overseas customers and increase their profits.
Easing will also reduce exporter costs, which have increased in the past, and accelerate operational processes. At this point, it is very important for exporters to work with freight forwarding companies, both to get competitive prices and rid themselves of operational difficulties to manage the process faster. Freight forwarding companies have specialized services, efficient and stress-free interactions for the transport of goods, and the necessary knowledge of the shipment of goods.
In addition, due to the volume of containers they book, exporters can get much more competitive pricing and shippers enable them to be more competitive through the prices provided. Shippers and freight forwarders can reduce costs considerably by providing good customer service throughout this process, anticipating and preventing mistakes, and establishing an organized system for the delivery of goods.