Feature article - Toll processing can address market challenges

Ben Beattie, director at Forbeats, explores the current issues affecting the US chemical markets and discusses how toll processing can deliver a smooth supply chain 

Responsible for over 25% of US GDP and providing essential products required to manufacture 96% of all US goods, the US chemical industry is fundamental to American society and its economy.1 It also plays a vital role in the international market, with chemical-related products accounting for over 9% of US exports. 

Given its huge importance, resilience planning is crucial to ensure that the sector can overcome both global and domestic issues.   One of the major causes of disruption is the ongoing Russia-Ukraine war. Both states are important raw material suppliers and the conflict, together with sanctions, has led to global shortages, delays and volatile pricing. 

This has been exacerbated by the Red Sea shipping attacks that have disrupted supply routes, reduced shipping availability and increased transport costs. Other concerns include rising trade tensions and regulation. The growing potential for trade tariffs can cause inflation and shortages while changing environmental, health and safety regulations in one jurisdiction can impact both imports and exports.  

A smooth supply chain 

As it is the producer of 13% of the world’s chemicals and 23.4% of specialty chemicals, a smooth supply chain, running without disruption, is critical to ensure US chemical manufacturers can deliver products and services safely and without delays.2  Without such resilience, the impact on other industries and end users, including critical infrastructure sectors, would be significant. 

Manufacturers can overcome the bottlenecks caused by supply chain disruption by partnering with a toll processor. Contractors have the know-how and agility to carry out the gamut of processing and chemical handling requirements that US chemical manufacturers require, including the handling of hazardous chemicals, the creation of custom formulations and multi-ingredient formula blending.  

With fully equipped, modern facilities and a highly skilled workforce, experienced toll processors can operate autonomously and efficiently, with the flexibility to deliver one-off or continuous operations. Moreover, stringent quality assurance and safety protocols ensure processing will be of high quality and low waste, with processes streamlined and risks mitigated.  

Experienced problem solvers 

With decades of experience tackling disruption, toll processors are adept problem solvers with the foresight to predict potential problems and put effective contingencies in place.  For many toll processors, having established relationships with other firms is a core part of their ability to deliver services during periods of disruption. This enables them to create large supply networks and maintain up-to-date surplus goods databases through which they can quickly procure scarce materials in times of shortage or delays. 

These partner networks can also be utilised to provide a wide range of other services, expanding a toll processor’s capacity and scope in areas such as warehousing and logistics, labelling, custom packing and repacking, paperwork and administration, batch traceability and even import and export services, complete with paperwork. This includes access to accredited facilities through which a complete range of materials from all hazard classes and viscosities can be processed safely. 

With these networks in place and a focus on stock control, order forecasting and process and cost optimisation, contractors are well-positioned to overcome disruption-related problems. They have the flexibility to react swiftly to demand, plan production schedules and deliver the full range of services. 

Prioritising safety 

The chemical industry is highly regulated; in addition to federal regulations within the US, chemical companies are also subject to the regulations of the countries in which they do business. Partnering with a UK-based toll processor provides confidence that operations are delivered safely and in accordance with UK regulations and international standards.   

With safety of vital importance, US manufacturers need to be assured that their UK toll processing partner has ISO9001 accreditation and can operate compliantly in all areas, including handling, storage, processing, packing, labelling and transport. Additionally, they must be up to date with current regulations and be able to safely handle the spectrum of materials across all viscosities and hazard classes.  

Another key consideration for manufacturers is that the toll processor has the dedicated COMAH facilities to appropriately store, process and transport materials, together with the ability to provide sample analysis, batch traceability and associated paperwork. With these requirements in place, not only are quality and safety ensured, but also scaling can take place rapidly and at-scale savings can be achieved.  

The continuous production of chemicals and specialty chemicals is vital for US national and economic security. For US manufacturers seeking to overcome disruption and bottlenecks, particularly on an international scale, working with a UK toll processor provides numerous benefits.  

Unique problem solvers, they respond quickly and efficiently to market changes, while providing in-depth knowledge and experience that allows them to deal with the changing regulatory environment. Crucially, their extensive trusted partner networks enable them to deliver true end-to-end services that ensure deadlines are met and orders are fulfilled, despite shortages and delays.   

References:

1. https://www.cisa.gov/sites/default/files/2023-02/chemical_sector_profile_final_508_2022_0.pdf 

2. https://www.cisa.gov/sites/default/files/2023-02/chemical_sector