Market Trends of United States Chemical Logistics Industry
Increasing production of chemical and allied products driving the market
- According to the American Chemistry Council (ACC) Mid-Year 2022 Chemical Industry Situation and Outlook, despite ongoing supply chain constraints, the U.S. chemical industry expects to deliver solid growth this year as it benefits from inventory rebuilding, steady demand across many end-use industries, and a continued competitive advantage in natural gas-based chemistries. Following several years of subpar growth due to trade tensions, COVID-19, and disruptive weather events, the chemical output is expected to enjoy its greatest year in more than a decade in 2022, with growth across all chemistries. Several economic growth factors remain in place in the United States, including strong employment, stable consumer and business balance sheets, and steady manufacturing growth.
- In 2022, the United States' chemical output had its strongest year in more than a decade, with a rise across all chemistries. Following a 1.6% increase in 2021, ACC predicted that output would increase by 4.1% in 2022 and 2.4% in 2023. Shipments increased by 9.6% in 2022 and 3.4% in 2023, following an 11.3% increase the previous year. Basic chemicals will expand by 4.3% in 2022, with bulk petrochemicals and organics (4.6%), plastic resins (4.4%), and inorganic chemicals (4.4%) leading the way. Specialty chemicals output increased by 6.2% in 2022, owing to robust demand and restocking. Capital spending was expected to increase by 12.3% in 2022 to USD 34.5 billion and by 5.5% in 2023 to USD 36.4 billion.
- Chemical commerce in the United States increased by 22% in 2022, reaching a new high of USD 342 billion. Both exports and imports increased significantly, hitting historical highs. According to the ACC research, poorer growth in the U.S. economy and external markets would constrain growth in U.S. chemicals trade in the following year. Overall, chemical exports are predicted to dip 9.3% in 2023 due to decreasing growth, but they are expected to recover and reach USD 193 billion by 2026.
Understand The Key Trends Shaping This Market
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Growth in Chemical Logistics services driving the market
- Several chemical logistics firms deliver raw materials and finished chemical products used in a variety of industries including oil and gas, pharmaceuticals, and process industries. To reduce the risk of harmful goods transportation, manufacturers and third-party logistics businesses are implementing federal and state safety rules. For example, 3PL providers provide chemical shipments that include services such as non-asset logistics management, allowing shippers to select carriers and handle their commodities more effectively. As a result of the increased need for handling and delivery of hazardous chemical products, the chemical logistics market is expanding.
- The chemical industry's increased demand for automation and modernised green warehouses for sustainable business operations drives market expansion. Chemical producers are rapidly investing in cost-effective warehousing solutions that integrate green practices and smart technology, such as the Internet of Things (IoT), smart sensors, and robotics, as concerns about energy saving and environmental protection grow. Additionally, companies offer digital technologies to automate chemical logistics and process data, resulting in increased production, efficiency, and convenience. Furthermore, in logistics services, there is an increase in the usage of Artificial Intelligence (AI), machine learning, radio-frequency identification (RFID), and Bluetooth, as well as other recently emerging technologies such as drone deliveries and driverless cars. As a result, technical improvements in the logistics industry provide significant growth potential.
