Chemical Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,600 chemical distributors in the US resell chemicals; plastic materials, forms, and shapes; and related products. Firms may perform custom blending or packaging services. Some distributors may manufacture chemical products. Large downstream industries include consumer products, rubber and plastic products, health care, agriculture, semiconductors and electronics, construction, paper products, motor vehicles and parts, mining, fabricated metal products, textiles and fabrics, and food products.
Competition from Manufacturers
Chemical distributors compete with both domestic and foreign manufacturers, which typically have direct relationships with large customers.
Regulation of Hazardous Materials
Many chemicals are considered toxic or hazardous and are subject to regulations that govern storage, handling, and transportation.
Industry size & Structure
The average chemical distributor operates out of a single location, employs 21 workers, and generates about $22.8 million annually.
- The chemical distribution industry consists of about 7,600 firms that employ about 145,300 workers and generate about $173 billion annually.
- The chemical distribution industry is somewhat fragmented; the top 50 companies account for about 58% of industry revenue.
- Large multi-national companies include Univar, Brenntag, and Prinova.
- The chemical industry is global - large manufacturers, distributors, and customers often have international operations. Some large chemical manufacturers are vertically integrated.
Industry Forecast
Chemical Distributors Industry Growth
Recent Developments
Mar 20, 2024 - Payroll Costs Rose, Prices Fell in 2023
- Employment growth by chemical distributors accelerated last year, rising 3.3% in December compared to a year ago versus 1.8% in the previous annual comparison, according to the US Bureau of Labor Statistics. Employment by chemical distributors surpassed its pre-pandemic high for the first time in May of last year. Average wages for chemical distributors were $35.17 per hour in December, an 8.2% year-over-year change and a new high for the industry. Payroll costs rose in 2023 amid falling producer prices as demand for chemicals remained weak.
- US output of basic chemicals fell 2.5% in 2023, with declines in petrochemicals and organic intermediates, synthetic rubber, and manufactured fibers output, according to the American Chemistry Council’s Year-End Situation & Outlook. The council expects a “modest recovery” across all chemical segments in 2024, with overall chemistry output expected to increase by 1.5%, after an “unprecedented” destocking cycle that began in the third quarter of 2022 and continued throughout much of 2023, curbing production. Longer-term, the outlook for the US chemicals industry is positive, with the natural gas liquids feedstock advantage continuing to favor domestic production for the foreseeable future. Moreover, capacity expansions in customer industries will support the industry going forward, ACC maintains. “Because of the chemical industry’s early position in the supply chain, we would expect to see a turnaround in chemicals before improvement in the broader economy,” said ACC chief economist Martha Gilchrist Moore.
- Chemical distributors that operate their fleets can reduce the cost of fleet ownership by optimizing operational efficiency using advanced trailer telematics, according to fleet management provider Road Ready. Beyond location tracking, advanced trailer telematics (ATT) systems enhance fleet management, improve security and profitability, and stay ahead of maintenance issues. ATT systems use onboard hardware and software to collect, analyze, and interpret the data from the trailer, providing real-time insight into its location, condition, and performance. ATT systems use mobile-wireless networks to broadcast data from the trailer to the cloud via a mobile communications unit onboard each trailer. Sensor technologies monitor lights, brakes, and tires, including tire inflation and wheel-end temperature to ensure peak performance and prevent blowouts and failures that could result in chemical spills. While installing ATT systems can be complex and requires investment, it isn’t a sunk cost considering the down-the-road payoff, per Road Ready.
- The tank truck industry – a vital link in the chemical supply chain – is facing increasing operating challenges, according to the National Association of Chemical Distributors (NACD). While many of the problems chemical distributors face predate the pandemic, they’ve become more complex in recent years. ”The tank truck industry has experienced issues with driver and technician shortages, inflationary pressures, and changing regulatory landscapes,” Dan Furth of Heniff Transportation Systems, a leading hauler of chemicals, told NACD in August. Technology, including electronic logging devices and improved tracking systems, is helping to improve real-time load visibility for customers, communications, and efficiency throughout the supply chain. Moreover, haulers of hazardous chemicals may struggle to keep up with the ever-evolving regulatory environment which can make it difficult to stay in compliance. “Constant innovation is one of the keys to success in the tank truck industry,” according to Furth.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.