Tim Doggett, CEO of the Chemical Business Association (CBA), explores the impact of ongoing disruptions on the chemical supply chain and explains the value of collaboration in navigating ongoing challenges and changes.
The UK chemical supply chain is globally respected and a cornerstone of British industry. Its significance extends far beyond business, playing a crucial role in sustaining essential services and maintaining economic stability. The sector supports a vast array of industries, from pharmaceuticals and agriculture to construction and consumer goods, making it indispensable to both the economy and society. Indeed, virtually all manufactured goods contain chemicals.
As one of the most intricate and globally connected supply chains, it involves the movement of raw materials and finished products, including hazardous substances, between or through multiple countries. Manufacturers, distributors and logistics companies work in tandem with service providers and suppliers to ensure seamless operations. Any disruption in this intricate network could have severe repercussions across the world, causing widespread delays and financial losses.
Beyond its economic impact, the chemical supply chain plays a vital role in public welfare. Many everyday necessities, including food, medicines and hygiene products, depend on its efficiency. Ensuring its stability and resilience is therefore essential.
Key challenges
Global supply chains have always faced disruptions, but recent years have brought intensified challenges for the UK’s chemical sector. Market fluctuations, geopolitical instability, and regulatory uncertainty have created a volatile environment, requiring businesses to adapt swiftly to changing conditions.
Additionally, persistent issues continue to affect the industry. Rising and volatile transportation costs, regulatory challenges arising from Brexit and broader global factors remain key concerns. These factors contribute to ongoing uncertainty, affecting supply chain stability and business confidence.
The resilience of the UK chemical supply chain, however, is a testament to the dedication and innovation of industry professionals who work tirelessly to ensure smooth operations. Their efforts deserve recognition, as their contributions ensure the functionality of the sector and allow the broader economy and society to remain in a strong position. Nonetheless, vulnerabilities exposed in recent years highlight the need for urgent action to maintain the UK’s competitiveness.
Businesses require clear policy direction and regulatory certainty, to plan for the future. The slow progress on UK REACH for example, unresolved since Department for Environment, Food & Rural Affairs (DEFRA) announcement to explore an alternative model in December 2021, continues to create uncertainty, stifling trade and investment. Additionally, fiscal policy decisions have compounded concerns for many companies, contributing to the unpredictability of the sector.
Targeted policy interventions are essential to prevent stagnation and ensure that the UK keeps pace with global industry developments. As geopolitical and economic landscapes shift at an unprecedented rate, adopting a more agile and responsive approach is vital for the sector’s continued success. The CBA continues to have a strong working relationship with the Government to address these challenges. By advocating for practical solutions that foster growth, investment, and resilience, it aims to ensure the long-term stability of the chemical supply chain and its crucial role in the UK’s economy.
Global instability
With the chemical industry being highly interconnected, disruptions in one region often have far-reaching consequences, creating a ripple effect across the supply chain. Due to worldwide lockdowns, the Covid-19 pandemic caused severe disruptions across global supply chains, forcing businesses to halt, scale down, or modify operations. While many industries have since recovered, the long-term effects remain evident, with supply chains remaining vulnerable and continuing to have an impact on diverse operations.
Post pandemic, planning for widescale disruption became a key priority for many businesses as they looked to minimise the impact on their operations. Further highlighting the need for risk mitigation was the 2021 grounding of the Ever Given in the Suez Canal, which temporarily halted a significant portion of global trade and reinforced the fragility of supply routes.
The ongoing Russia-Ukraine war has further destabilised supply chains, particularly within the chemical sector, as both countries are key suppliers of raw materials. Sanctions, supply shortages, and rising energy costs have compounded the challenges, leading to increased operational expenses for businesses reliant on these materials. In addition to economic repercussions, logistics networks have been severely impacted. Black Sea ports have become inaccessible, and road transport has been affected by the loss of Ukrainian drivers, many of whom have joined military service.
The ongoing instability in the Middle East has further compounded difficulties, with heightened security risks deterring shipping lines from utilising the Suez Canal. As a result, many vessels are being re-routed around the Cape of Good Hope, leading to significantly longer transit times, increased fuel and operational costs, as well as a reduction in global shipping capacities.
Additionally, attacks on vessels transiting in the Red Sea have far reaching consequences. Insurance premiums for ships navigating these high-risk areas have surged, particularly for war risk and cargo insurance, placing further financial strain on carriers and freight forwarders. These conditions have also led to schedule disruptions, port congestion, and supply chain bottlenecks, affecting inventory planning and increasing uncertainty for businesses across multiple sectors.
Disruptions persist, and the CBA quarterly supply chain surveys continue to highlight this, with respondents reporting shipping costs remaining high and Red Sea related operational issues continuing. These challenges not only affect the chemical industry but also have a cascading impact on wider supply chains, economies, and consumers.
Brexit has undeniably introduced further complications, particularly in terms of trade and workforce stability. The UK’s departure from the EU Single Market – after nearly three decades of seamless access – has resulted in increased bureaucracy, customs procedures, and import/export costs, disrupting long-established trade routes. The changes have disturbed long-established trade flows and added layers of complexity for businesses operating across borders.
Many companies have faced significant challenges adapting to the new regulatory environment, prompting some to relocate operations within the EU to preserve business continuity. It has also led to escalating road haulage costs, impacting many UK businesses.
The shift from ‘just in time’ to ‘just in case’ inventory models has also presented financial and logistical challenges. Businesses have had to stockpile materials to mitigate delays, resulting in higher warehousing costs and cash flow constraints. These adjustments require significant investments in time and resources, with some companies unable to absorb the added costs and delays, opting to scale back or cease certain trade routes altogether.
Given these ongoing challenges, industry stakeholders are actively working on strategies to strengthen supply chain resilience. Trade associations, including the CBA, are collaborating with policymakers and international organisations to develop solutions that mitigate risks and promote long-term stability. These efforts include regulatory advocacy, investment in alternative supply routes, and the implementation of industry-wide initiatives designed to increase efficiency and preparedness in an increasingly unpredictable global landscape.
Regulatory hurdles
While geopolitical instability remains a significant concern for the chemical industry due to the logistical challenges it presents, regulatory changes and international trade policies have also introduced long-term difficulties. Among these, UK REACH stands out as one of the most complex and costly regulatory hurdles faced by the sector.
When the UK was part of the EU REACH system, businesses collectively invested over £500 million to register substances and ensure compliance. However, following Brexit, UK-based companies must now duplicate much of this data for the separate UK REACH regime, as access to the EU’s data remains restricted due to intellectual property constraints.
The DEFRA has estimated the cost of this duplication could be between £1 billion to £3.5 billion. This substantial financial burden has created regulatory uncertainty, discouraged investment, and raised concerns about the UK chemical industry’s long-term competitiveness. What’s more the implications of UK REACH extend beyond the chemical industry, affecting downstream users who were previously outside the regulation’s scope.
The CBA has actively worked to highlight these issues and has proposed practical solutions. Although DEFRA acknowledged concerns in December 2021 and pledged to explore alternative approaches, progress has been slow, leaving businesses without clear guidance.
Uncertainty, coupled with widening regulatory divergence between the UK and the EU, has made compliance more complex. Many businesses are struggling to source critical materials, leading to supply chain inefficiencies and, in some cases, making certain chemicals commercially unviable. Without timely resolution, the lack of clarity will further hinder trade, innovation, and economic growth.
Beyond UK REACH, evolving EU regulations continue to affect UK exporters. The recent updates to the EU’s Classification, Labelling, and Packaging (CLP) and REACH regulations impose further labelling requirements, adding additional compliance obligations for UK businesses trading with the EU.
In addition to European regulations, trade relations with the United States (US) are evolving. Changes in US policies and tariffs are affecting the movement of chemical products, requiring UK businesses to adapt quickly. The US port strikes also had a significant impact on CBA members, with supply routes between the UK and US East Coast affected.
The CBA continues to lobby in members’ best interests with policymakers and industry leaders to ensure companies have the necessary support to navigate these regulatory challenges and maintain competitiveness in an increasingly complex global market.
The cost of instability and uncertainty
The modern supply chain is no longer just a logistical operation, it requires significant strategic planning to navigate. Businesses must steer a difficult landscape that continues to be shaped by current affairs, including regional conflicts, as well as resource and labour shortages. The traditional focus on cost, speed, and efficiency must now be balanced with resilience, security and sustainability, as supply chains contend with unprecedented levels of disruption and fragility. Businesses that fail to adapt risk operational setbacks, not meeting market demands, dissatisfied customers, and long-term growth challenges.
In this new reality, adaptability is not just an advantage, it is a necessity for survival and long-term success. It is no longer a question of whether supply chains will face disruption, but how businesses can withstand the shocks and avoid severe financial or reputational impacts. Factors such as shifting trade policies, rising protectionism, climate change, and rapid digital transformation are placing immense pressure on global supply networks.
Add to all this the combined impact of Brexit, armed conflicts, and evolving trade regulations, and businesses have been forced to reassess their supply chain strategies. Many are now diversifying suppliers, spreading risk and reducing dependency on specific regions to enhance stability.
Stockpiling raw materials has also become a common risk-mitigation strategy, but it presents its own challenges. Holding excess inventory ties up capital and raises warehousing costs, while increased border scrutiny can lead to import/export delays. These factors complicate business operations and require a delicate balance between preparedness and financial sustainability.
The chemical industry is particularly vulnerable to supply chain disruptions due to the regulatory and safety requirements associated with its products. Delays in obtaining critical raw materials can halt production, leading to substantial financial losses and operational inefficiencies. It is essential businesses invest in improved supply chain visibility, robust risk assessment frameworks, and contingency planning.
The CBA continues to play a vital role in helping businesses navigate these challenges. By developing strategic initiatives and advocating for policies that strengthen supply chain resilience, it ensures that the chemical supply chain industry remains adaptive competitive, and sustainable in the global market.
Future-proofing the supply chain
One of the most effective ways to mitigate supply chain risks is by creating stronger collaborations with suppliers and industry stakeholders through open and honest communication. Improved data sharing enables better forecasting and decision-making, allowing companies to anticipate and respond to challenges before they escalate. Transparency across the supply chain not only enhances operational efficiency, but also strengthens business relationships, creating a more adaptable and robust industry framework.
The evolving legislative landscape, including UK REACH and wider post-Brexit trade regulations, demand that businesses are proactive and stay ahead of compliance requirements, allowing them to navigate complex legal obligations while maintaining uninterrupted trade and production.
The CBA plays a vital role in helping businesses interpret and implement these regulations, advocating for policies that balance safety, sustainability, as well as commercial viability, whilst providing extensive advice and support.
For over 100 years, the CBA has worked extensively with the government to support the chemical supply chain. This collaboration has focused on promoting business and trade, facilitating knowledge exchange, and building capacity across critical areas such as workforce development, supply chain security, and HSSE standards. The CBA’s involvement in shaping industry policies ensures that the UK chemical supply chain remains competitive and prepared for future challenges.
In addition to regulatory advocacy, the CBA actively engages with global partners, industry bodies and key stakeholders to address shared concerns. By participating in international forums and initiatives, the CBA has built a reputation as a reliable and trusted voice for the UK chemical sector, ensuring it remains aligned with global best practices and emerging market trends. This international perspective helps the CBA in supporting the industry’s position as a global leader.
By strengthening partnerships, enhancing regulatory compliance, and fostering industry-wide transparency, businesses can create a more resilient and adaptive supply network. The CBA remains committed to working alongside members, government agencies, and industry leaders to drive practical solutions that support growth, innovation, and long-term stability within the sector.
The shift towards sustainability
Sustainability continues to evolve as a major focus within the chemical industry, driven by an increased awareness of regulatory requirements and growing consumer demand for environmentally responsible practices. Businesses in the sector face mounting pressure from consumers, regulatory bodies, and investors to integrate sustainable practices into their supply chains. As a result, companies must balance economic viability with their commitment to environmental stewardship.
The CBA has launched several initiatives in collaboration with members, to support industry-wide sustainability efforts, including Sustainability Forum which provides a platform for industry leaders to share best practices and explore green innovations. Additionally, the introduction of Carbon Literacy Training has equipped professionals with the knowledge needed to assess and reduce their environmental impact, contributing to more informed decision-making across the sector. The training has been widely adopted, with 68 industry professionals, including all CBA staff, participating to date.
The newly established Sustainability Hub also provides resources and tool kits promoting tangible actions amongst membership.
In November 2024 the CBA successfully hosted its landmark Net Zero and Compliance Day during COP29, bringing together senior leaders from across membership and other key stakeholders to discuss sustainability strategies. Moreover, the CBA invested in its long-standing Responsible Care programme, which it has championed since 1993, allowing members to ensure continuous improvement in their commitments.
One of the key challenges in sustainability is ensuring that environmentally friendly solutions remain financially viable. While many companies are eager to adopt green alternatives, the cost and availability of sustainable materials remain barriers. The CBA continues to work closely with its members to explore solutions, including green chemistry, alternative raw materials, and improved waste management strategies.
Building a strong and diverse workforce
A key challenge for the chemical supply chain is ensuring there is a suitably skilled workforce. With such a broad range of expertise required across the industry, businesses must focus on upskilling and retaining existing employees while attracting the next generation of personnel.
Whilst the UK faces a broader workforce shortage, one that the chemical supply chain is not currently experiencing, it does however, face its own challenges, including an ageing workforce, skills gaps and misconceptions about the industry. As a result, the CBA has made workforce development a priority, working to position the sector as an employer of choice.
The People & Skills Hub (P&SH), established by the CBA, promotes the chemical supply chain as a dynamic industry with a wealth of career opportunities, and it has Diversity, Equality and Inclusion at its core. Through strategic partnerships and targeted outreach, the initiative provides a platform for industry collaboration, networking, and knowledge sharing, supporting businesses in allowing their employees to thrive personally and professionally whilst ensuring their workforce remains adaptable to potential industry changes through progression planning.
The CBA is also playing a key role in tackling the industry’s skills shortage through collaborative efforts with other organisations. More than 40 businesses and associations participate in Generation Logistics, a Department for Transport-backed initiative aimed at raising awareness of logistics careers and improving recruitment across the sector.
Similarly, the CBA’s Generation STEAM initiative expands on traditional STEM education by incorporating the Arts (A), encouraging creative problem-solving and broadening access to industry careers. By encouraging a broader perspective on education and skills, STEAM challenges the idea that learning areas are separate, to capture a bigger talent pool. Currently, the programme boasts over 50 ambassadors who engage with young people to share their experiences and insights.
Attracting new talent is essential, as is supporting career progression and professional development of those already in the sector. The CBA’s Future Council provides a platform for young professionals to develop their outreach strategies, exchange ideas, and gain a broader understanding of the supply chain.
In addition to focusing on young talent, the CBA recognises the immense value of experienced professionals. The 5050Vision initiative highlights the importance of workers over 50. The vision recognises, harnesses, and celebrates the invaluable wealth of experience that seasoned professionals over the age of 50 bring to the workforce. By retaining and empowering this group of individuals, businesses benefit from their knowledge, leadership capabilities, and ability to mentor younger employees.
To build a strong and prepared workforce, the CBA continues to champion a range of initiatives that address recruitment, training, and retention. All its programmes are aimed at ensuring the chemical supply chain remains a thriving and forward-thinking industry.
The UK’s chemical sector is not just a vital part of the economy, it is a driving force behind progress, innovation, and global connectivity. However, amidst constant disruption, resilience and stability can only be achieved through strong collaboration across the chemical supply chain. By fostering partnerships, industry can navigate uncertainties, mitigate risks, and future-proof the sector. Trade organisations like the CBA play a crucial role in facilitating this cooperation. By equipping businesses with strategic insights, advocating for supportive policies, and keeping an open dialogue with industry, it helps build a more connected supply chain.
Contact
Tim Doggett
Chief Executive Officer
Chemical Business Association
Crewe, UK
T: +44 (0)1270 258200
E: tim.doggett@chemical.org.uk
www.chemical.org.uk
