NACD President Eric Byer Interview | The View, Podcast Edition - Episode 016

NACD President Eric Byer Podcast | The View, Ep 016

On Episode 016 of The View, Podcast Edition, we sit down with NACD (The National Association of Chemical Distributors) President Eric Byer. TCC Marketing & Sales Specialist Ben Sawicki, and Regulatory Specialist Matt Francoeur discuss current industry trends throughout the industry, including tariff implications, trucking and logistics, and more.

Visit thechemco.com/podcast to stream Episode 016 on the platform of your choice!

Episode 016 Transcript:

Ben Sawicki:                 00:11               What’s up everybody. Welcome to the View From Jamestown podcast edition. This is episode 16 and we are sitting down with the NACD president, Eric Byer. I also have TCC regulatory and sales specialist, Matt Francoeur on the line too. Good morning guys, thank you guys for sitting down.

Matt Francoeur:           00:27               Glad to be here again.

Ben Sawicki:                 00:29               Eric, thank you as well for your time. We appreciate you sitting down and talking to us for a little while here.

Eric Byer:                      00:34               Absolutely, appreciate the opportunity, thanks.

Ben Sawicki:                 00:37               Maybe Eric if you wanna get started maybe with a little bit of background on you and the NACD, what you guys do and work on and all that fun stuff.

Eric Byer:                      00:45               Sure. NACD was established back in 1971. We primarily represent chemical distributors and a lot of their supply chain partners and most of our member companies do everything in the distribution space. They can process chemicals, formulate blend repackage, warehouse, transport, you name it. They service about 750 thousand customers annually. To give kind of a flavor on the economics side, we have about 70 thousand or so employees and generate a little over five billion in tax revenue for communities throughout the country. Our members total, we have about 450 total overall and we represent about 85 to 90 percent of the chemical distribution space. It’s a good group, a lot of small businesses, our average sized member’s about 26 million dollars in sales and about 25, 26 employees.

Eric Byer:                      01:37               By way of background for me, I’ve been doing this now for about five years. Came here from a law firm working on a lot of policy and communications efforts and then did a lot of government affairs work for a trade association that was kinda similar to NACD, but in the aviation world. Before that I worked on Capital Hill for a member of Congress out in State College, Pennsylvania.

Ben Sawicki:                 01:58               Very nice. Are you based in DC?

Eric Byer:                      02:01               Yeah. We’re technically inside the beltway, we are in Roslyn, which is the closest part to DC in Arlington, Virginia. We’re right across the river from Georgetown.

Ben Sawicki:                 02:10               Got it. That’s where … Is everyone that works for the NACD based there or do you guys have offices …

Eric Byer:                      02:15               Yeah, our headquarters are here along with the Chemical Educational Foundation that has their staff here as well.

Ben Sawicki:                 02:19               Very nice. Jumping ahead, what are some of the biggest things you guys are working on or seeing throughout the distribution space and the chemical space as a whole? What are some of the biggest industry trends going on and things you guys are really spending a lot of time of internally?

Eric Byer:                      02:35               Sure. Lots of things obviously. From a public policy side I think everybody’s seen what’s going on with the China 301 tariffs, that’s obviously been something that’s really important to a lot of our members, especially smaller companies that import product from China. That all started back in the spring and there’s been three lists that have come out from the president as to companies that … As to products that are gonna be set to tariff, whether it’s 10 or 25 percent. We’ve been aggressive on that sending a lot of our members to testify before the US trade rep. We’ve worked somewhat successfully in getting a number of exclusions for products coming up. I think it was 350 or so that we’ve actually had members concerned about, we’ve been able to get exclusions to about 30, 35 of them, which is pretty good, 10 percent. Most people say that’s not great, but in this world where people are not having much success, we’ve been pretty successful in that arena. That’s probably been one of our big issues.

Eric Byer:                      03:31               Lots of other policy issues that we’re talking about right now. We have CFATS that expires in early January next year we’re trying to get reauthorized. We’ve got a huge driver shortage out there where it’s tough for a lot of our members to get product delivered on time because of the lack of qualified drivers. We’re working on some legislative and regulatory fixes for that potentially. Obviously consolidation of our industry continues to be something that we see, obviously I think everybody’s seen at this point Univar looking at purchasing Nexio. Those are two or three of our biggest members that we have out there, so that’s a big deal, so we’re keeping a close eye on that. But we’ve seen a number of other MNA activity over the last six months to nine months, so that’s something we’ll keep a close eye on.

Eric Byer:                      04:16               Lots to tackle both from a policy, but also an industry side. The good thing is that even with the tariffs, the economy’s been pretty strong. Having seen our members at regional events and some other industry events here in the last two weeks, everybody seems to be doing pretty well. I think the fact that the regulatory climate is not as challenging as it was under President Obama has been helpful. I think tax reform has been helpful. The China tariffs are challenging to say the least, but I think there’s still light at the end of the tunnel in terms of our guys are doing pretty well economically and they’re definitely out there, they’re trying to hire people, they’re definitely growing their businesses, we’re seeing better returns year over year from this year to last and that’s a trend that’s happening the last two, three years. Those are all good indicators that the economy’s still pretty strong for the distribution space.

Ben Sawicki:                 05:04               Definitely sounds like you guys are not struggling to find things to do by any means. Definitely lots going on it seems like, which good and a bad thing I suppose.

Eric Byer:                      05:14               Yes, all gainfully employed that’s for sure.

Ben Sawicki:                 05:15               Absolutely. Maybe going a little bit deeper on the tariffs for a second, we spent a lot of time on the podcast and putting emails out and things like that just trying to keep our customers and business partners aware of what’s going on just publishing information. It seems like we put a lot out and there’s obviously news articles all over the place and you guys do a great job with getting the word out as well and it just seems like there’s still lots of people that either have decided to selectively ignore what’s going on or hope it’ll go away and close their eyes and just hope that it just disappears overnight.

Eric Byer:                      05:49               Yes, exactly.

Ben Sawicki:                 05:51               Obviously the three lists aren’t final as Matt Francoeur over here has done a great job keeping an eye on for us. Where does all that lie and maybe any recommendations or advice for your member companies with how to proceed for the next month and then obviously once the new January 1 deadline comes into effect, what you guys are recommending and talking to people about?

Eric Byer:                      06:12               I think obviously going back, the biggest thing here is educating yourself with what’s going on. There’s three lists and everybody’s got information pieces out there. For our members we’ve got a static page on NACD dot com that talks about each of the three lists, what part out there with the products they’re gonna have a tariff assessed to them. We’ve essentially laid out when the activity is gonna take effect, what that increased tariff rate’s gonna be, those types of elementary stuff right now so people understand what it is. We’ve also put in submitted comments on how to potentially or at least request to have products excluded. Some have been successfully done, most of them have not been. Right now we are still looking at a last ditch effect, which USTR’s gonna put out there publicly about how you can make one final request to have a product excluded from one of the three lists. Namely list three is what we’re focusing on right now pretty soon. Those are all efforts that are all ongoing that we continue to tackle everyday.

Eric Byer:                      07:10               We’re working with Capital Hill, we’ve been working aggressively on a number of different letters, there’s another letter that’s coming out here probably in the next few days that requests the White House and the administration to make sure they have the opportunity to put in for chemicals that could be excluded out of list three, that’s something we’re working hard on.

Eric Byer:                      07:28               In terms of what’s gonna happen moving forward, we’ve heard lots of things that are going on up there. Could the president revoke everything he’s done if he start to deal with Beijing, we don’t know, certainly that’s a hope that a lot of people have. I couldn’t tell you exactly what’s going on in the inner core of the White House with the negotiation process, but we do know it’s very high level, we do know that members of Congress, especially from states that have a high impact in terms of manufacturing are struggling and they’re hearing from businesses small, medium and large. I think with an election coming in a few weeks, there may be potentially some movement with the White House and striking a deal I hope. But if not, this is when people vote. If they’re frustrated, this is one of those things where I think a lot of folks are gonna be up there and saying we gotta make a change here. I don’t know ultimately what’s gonna happen, but this is something that could very much be around for at least the next couple years and I think it’s something that people need to prepare themselves to be permanent as much as we hope there could be a fix where things could change up.

Ben Sawicki:                 08:26               One of the things we were just talking about yesterday actually on our monthly view podcast with Rob Roach, the TCC president, is it seems like Trump is boasting about how much money the US is gonna make from these tariffs, but in reality, it’s the businesses, it’s us essentially that are paying these tariffs. It’s not like we’re gonna be making these millions and millions of dollars from China and I think once people realize that, it’ll be interesting to see what happens come midterm election time.

Eric Byer:                      08:54               It’s fair to say that there’s been a trade in balance, I don’t think anybody disputes that, especially with China. This is how the president believes is the best way to negotiate and that’s fine. I think the idea that it’s not hurting businesses and revenue to the association is not genuine to be frank with you, I think we have plenty of member companies that can testify to the fact this is really gonna cripple their business, especially for products they’re importing that only can come out of China. I think that’s where you’re really starting to see a lot of small companies that have a number of products that are coming in just from China alone where they’re trying to recalibrate and find out could it be made somewhere else, do they need to diversify their product portfolio if you will. There’s a lot of things out there that I know it’s a struggle and it’s challenging. This is what the White House wants to do and that’s fine, but I think for our guys, the best thing that they can do is say we can’t put our head in the sand, we gotta find a way to either get this product manufactured somewhere other than China or some other countries and if we can do so, can we ensure that it gets here in time so we can fulfill what we need to provide to our customers.

Ben Sawicki:                 09:57               I think at the very least at least it’s decided now. We know what products or chemicals are effected and it’s a good thing that’s at least decided. Kind of we’ll just wait and see at the very least there’s gonna be a three, four, five, six week shortage of stuff coming in from China because people just weren’t ordering because they had no idea what would happen. At the very least, I think through the end of the year, stuff that is coming from China will be interesting to see what happens on the supply side.

Eric Byer:                      10:24               Yeah, I would say that between election day and the holidays, that’s a pretty pivotal time period. I’ll be curious to see if the shortages do occur and see what pressure points are put on the administration if any, whether they’re economic or political or otherwise. I think you will see something shake out, I don’t know if it’s gonna be good or worse. We keep hearing there could potentially be a list four. There is still several hundred million dollars worth of product out there that could be tariffed. I don’t know for sure, but I think something will shake out here over the next eight to 10 weeks, we just don’t know which direction it’s gonna go.

Matt Francoeur:           10:56               Little bit earlier you were talking about trying to convince the USTR to pass the … I think it was the product exclusion requests. When do you expect that to start coming about kind of around this January 1st deadline for the 25 percent tariff?

Eric Byer:                      11:11               Yeah, I would hope soon. It takes time, it would take time for our guys to put in the request, it takes time for USTR to consider and vet them and then issue a final list if you will of potential products that could be excluded. I suspect that not many will be approved for exclusion since they’ve kind of gone through the initial phase. But I’m hopeful soon, I couldn’t give you a specific date to be honest with you. But if you look at where we are now versus January 1, we got less than three months and time’s ticking. I’m hopeful fairly soon so we can get more information out to our members on how to do that process.

Matt Francoeur:           11:43               That’s it. I remember looking at the list of product exclusion requests for list one and there’s a couple thousand on there and all of them are pending. I don’t think they have the man power.

Eric Byer:                      11:55               And list three is the kitchen sink in my mind. That will take an extraordinary amount of time to get that done. I hope it’s sooner than later, but we’ll see. For all we know there could be a delay or extension, I don’t know. But you’re right, the fact that list one still hasn’t been finalized up there, that’s a good point to be made and one where time is definitely ticking.

Ben Sawicki:                 12:17               I think the way things have gone, we could wake up tomorrow morning, it could be a 180 and all this could be gone. The way things have gone, it’s gonna be interesting to see how things certainly shake out through January 1 and beyond.

Eric Byer:                      12:29               That’s the hope, but hope can only carry you so far. The fact is we got a reality ahead of us that we gotta make sure we prepare our members for.

Ben Sawicki:                 12:36               Pivoting slightly to another exciting topic surrounding trucking and logistics throughout the US as well as kind of the global marketplace for different freight and logistics moves, what are you guys seeing on your end with the freight industry obviously has gotten tight over the last six, 12, 18 months across all different channels. What are some of the things you guys are monitoring and keeping an eye on and trying to advocate for across the chemical industry?

Eric Byer:                      13:04               As I said, the economy’s doing pretty well for most of our folks, which means there’s more product that’s trying to be moved. Whether it’s coming for abroad and being brought in on a freighter across Pacific and put on rail and brought in by … Or truck, it’s one of those things where it’s a good problem to have, but it’s a bad problem to have. It’s good because the economy’s going strong and our members are able to do more business and grow with new jobs and stuff like that, but it’s bad in the fact that logistically it is a challenge. The rail marketplace has been very challenging for our guys that do bring in products via rail. The class ones have continued to demonstrate an inability to provide a lot of the products that our members bring in on time, not a really good communication network and when there are complaints, they’re not being heard. Sometimes some of the rate charges that are out there are just doing very quickly, not a lot of discussion about it.

Eric Byer:                      13:55               There are a lot of issues when you tie in product coming in on rail and then getting ultimately to a destination where you potentially offload onto a truck and then you have a driver shortage. There are definitely challenges between rail and driving right now where it’s hard for our members. They’re looking to find ways where they can get product in safely, securely and on time, always what they’re looking for. But when that can’t be done, they’ve gotta look at other alternatives. I know I’ve talked to a few distributors who are actually looking at getting back into owning their own trucks again because they can kinda control their own destiny that way. That’s one way we’re looking at it or some of our members are looking at. But I think everybody’s trying really, really hard, especially with the third party logistic providers that are out there to find qualified drivers to get product from point A to point B because it’s a real opportunity for them as well because if our members are doing well, they can do well by moving that freight. I think everybody’s trying to find solutions where they can get folks in.

Eric Byer:                      14:48               There is a bill on Capital Hill that we’re pushing that would take the driver age from 21 to 18. Right now you have to be 21 to cross state lines to drive a truck. For someone like me who lives in northern Virginia, Maryland is literally two miles away, but a driver could go from where I live in northern Virginia down to the southern part of Virginia, which is four hours away, but they couldn’t cross the two miles into Maryland because that would be illegal. There’s the possibility where that age would be dropped from 21 to 18. There are a number of folks that I’ve talked to that have folks that are coming out of the military that could certainly handle that responsibility for sure with proper training as this bill would dictate. That’s another area we’re looking at. But it’s small in the grand scheme of things. I think it’s just a matter of can we find people and get them enthused again to drive trucks, which has been a challenge for a number of years.

Ben Sawicki:                 15:41               That was gonna be one of my next kind of followup questions is what tactical advice you guys are offering to member companies in the industry. Obviously there’s the option to buy trucks and hire drivers and get into that asset based piece. You can advocate for longer lead times, you could advocate for flexible delivery dates and all that stuff. Is that kind of what you’re preaching at this point or is there any other advice you’ve given people?

Eric Byer:                      16:06               We do have a number of member that do provide those types of services that are fairly reliable that we’ll encourage them to at least talk to, so we’re doing that. But a lot of things you just talked about, whether it’s better lead time, whether it’s having a better relationship with the company you’re dealing with, whether it’s bringing it in house and having your own drivers again, a lot of our folks are way ahead of us in terms of just thinking about opportunities and a way to ensure the product is getting there on time. But I think the idea that it’s a challenge to say we know product’s coming in and you’ve gotta add another week to week and a half because you’re not sure when that product’s actually gonna arrive is frustrating for a lot of our guys. They’re doing the best they can to build that in time wise for a product to be delivered or look at other opportunities working with a third party provider that can guarantee a shorter window of time that are more reliable. There are those that are out there, companies that can do that. I think everybody’s putting anything they can on the table to find ways to get that product there.

Ben Sawicki:                 17:02               It’s been amazing seeing some of the articles that have come out about double digit percentage growth of prices for trucks and double digit growth across rail in six months. It’s incredible to see the capacity overload that’s on a lot of these channels.

Eric Byer:                      17:19               That’s in a lot of the transportation modes. I came from an aviation industry where pilot shortage is always something that was very cyclical. When the economy got strong, pilots were in high demand. In the trucking industry it’s no different, there has been a shortage now for some time. The ATA has worked out there about the shortage on what it is now, what it could be moving forward. We’ve gotta find a way to make the trucking industry … I use the term sexy, but appealing again for folks coming out of school to get interested in driving trucks again. There was a time where it was, Smoky and the Bandit back in the ’80s, that kind of thing, but it’s one of those things where we need to find a way to get it, whether it’s higher pay, better benefits, better time to spend with your family, whatever it may be and I know people are working that angle as best they can. But there’s gotta be ways where we can get people interested again in driving trucks to ship product around.

Ben Sawicki:                 18:08               I’ve always kind of thought of it almost like this gig economy we’re in where people are flocking to drive Uber and Lyft because they like to do it on their own time and they like to be where they wanna be and you can pick up and move and do that anywhere. It almost seems like the trucking industry is a similar kind of comparison. It’s just interesting what companies need to do to attract people that are willing to do Uber and Lyft, but maybe don’t wanna drive a truck. What are the major differences and how can they appeal to those people.

Eric Byer:                      18:35               I think that’s a good point because there’s that one time that everybody finds very, very important, it’s flexibility. How can I have the flexibility to maintain my lifestyle while generating some additional revenue. With Uber, that’s gonna work for people that are trying to do extra jobs on the weekend or whatever it may be, people can do that. For trucking, it’s gotta be that flexibility’s gotta be built in where the pay’s gotta be good, the benefits gotta be good, but the time commitment to ensure that someone’s home on the weekend for the family or whatever it may be, all those factors are very, very important and I think can ultimately help grow back the trucking driver population that we’re struggling with right now.

Ben Sawicki:                 19:09               It’ll be interesting to see what we see companies doing. I’m 24, Matt you’re 24, 25.

Matt Francoeur:           19:15               23.

Ben Sawicki:                 19:16               It’s amazing how companies are gonna appeal to kind of people in our demographic to wanna drive trucks.

Eric Byer:                      19:24               Exactly right.

Ben Sawicki:                 19:26               Moving on a little bit too, obviously a couple big daunting projects and tasks in front of you between the tariffs and the trucks. What are you guys seeing in the industry on a more positive note, I know you mentioned the economy’s doing well and many of your member companies are doing pretty well at this time. What are some positive trends you guys are seeing and working on and spending your time on?

Eric Byer:                      19:46               The economy obviously is doing great relatively speaking for most. When I go to our meetings, I go to the northeast part or the south or the west, whatever it may be and pretty steady across the board the economy is stronger, I think tax reform has served a good purpose for a lot of our folks. I think regulatory reform, while it’s not something as an issue that’s passed on Capital Hill, it’s something that has been done by this administration very effectively. There used to be with President Obama’s administration a lot of rules, but also guidance documents that would pop up on a daily basis that you would have to sit there and look at as to what the impact’s gonna be on your company. That has been curtailed significantly over the last 24 months.

Eric Byer:                      20:29               That has been a huge thing for our members too is … Not that anybody’s shirking their responsibilities with safety and security, but we have a 27, 28 page regulatory checklist for our members. Our members comply with plenty of rules, justifiable, some probably not. I think it’s one of those things where they’re actually able now to focus more on how do I grow the business while still doing it safely and securely while providing more jobs, more revenue to local community and that kind of stuff. I think reg reform has been a good thing for the entire industry and not just even the chemical industry, other industries as well that it allows companies to sit there and small business in particular, to do what they’re good at, which is go out there and provide for the local community, provide for the company and grow. I think reg reform’s been a big thing as well.

Eric Byer:                      21:15               I think the other thing here to consider is taxes are good, reg reform’s good. I think the fact that we are seeing while there’s been a lot of consolidation, there’s also been a lot of good creativity from our industry, new ways to go out there and diversify their product portfolios. I said earlier they’re trying find new ways to reinvent who they are and what they can do. That’s been something I’ve seen some pretty cool ideas out there, whether it’s through technology, whether it’s through partnerships with other companies, whether it’s working with … Distributors working with distributors to team up on a product offering for distribution, whatever it may be. I think there’s a lot of cool creativity that’s out there right now and it’s really … I’m excited to see how things unfold over the next five or 10 years. As we look at things like e-commerce and Alibaba and Amazon and folks like that, that’s something our industry has always been kinda lukewarm to get really hot and heavy into. But I think now as the climate changes, there’s some exciting opportunities where I think our members are looking more at e-commerce as something that can help grow their business. While it could be a struggle for some, I think there’s opportunity for others. I think all those factors are really good things that our industry are gonna do well in to help grow their business moving forward.

Ben Sawicki:                 22:26               I would agree with a lot of that absolutely. I’ve started with TCC more on the marketing side and now pivoting more into a bit of a sales role. But the last year and a half kind of keeping an eye on what TCC’s doing for marketing and trying to see what other companies are doing as well. It definitely kind of lags behind in terms of the e-commerce and the creativity and the technology and things that people are doing, but I think it’s inevitable that it’s gonna go there. I agree it’ll be definitely interesting to see in the next two, three years what companies do with technology with e-commerce, with making sure they’re on mobile and executing all these different platforms. I definitely agree with that.

Eric Byer:                      23:02               Yup.

Ben Sawicki:                 23:02               I guess wrapping things up Matt, any other questions or thoughts for Eric?

Matt Francoeur:           23:07               No, not so much at this point.

Ben Sawicki:                 23:08               I know you’ve used the NACD resources a lot over the last couple months, so I’m sure you’re appreciative of all that stuff being put out.

Matt Francoeur:           23:15               Yeah, big time. I remember Carrie forwarded me the first email that the NACD listed their resource webpages and that was by far and large the best resource that I was able to find.

Eric Byer:                      23:28               We appreciate it. One of the things I think we do really well around here is trying to provide people educational tools. We got a good team with Jennifer Gibson and been kinda a point person on our trade stuff, they’ve done a great job. We’ve got in person workshop that we have coming up at the end of this month in Kansas City that focuses … It’s gonna focus a lot on trade. We also have webinars and a lot of other tools in that resource page that you’re talking about. If anybody has questions or anything like that, NACD dot com is a good place to start and happy to take it from there for those folks that need some answers to a lot of the pressing issues.

Ben Sawicki:                 23:58               I was gonna kinda pivot into my kinda final thought as maybe you wanted to mention ways companies can get involved with NACD, some of the public events that you guys do as well as some member only events and member only resources you guys have, just ways companies can get involved and stay involved with the NACD.

Eric Byer:                      24:18               The two biggest things that we have is we’ve got a fairly robust event structure. We have our annual meeting coming up in a few weeks in Carlsbad, California and that’s the cream of the crop for our industry where we get 700 people or so to come in and talk a lot about policy and business issues and economic issues, whatever it may be. That’s a good thing, that’s a member only event, but it’s something that a lot of our folks value greatly.

Eric Byer:                      24:42               I think the advocacy side too is where we have a very active base. I always say you can put all your time and effort into something and you get something out of it because you try hard. I think a lot of our members really care about the issues they’re being confronted with, whether it’s tax related, regulatory, trade, security, whatever it may be. We have a pretty robust opportunity to go out there and change things on Capital Hill. In person meetings with the staff level, but also our grassroots apparatus is something where a lot of our members take an active role in things. They come into DC for our fly in in the spring where we were able to change things. It’s really helpful to see such an interest in what we do. For those that are interested, our guys, it’s a good group of folks that go out there and work hard because they recognize the better the industry is, the better their companies are gonna be. Whether it’s through our events or advocacy, events or training tools as we talked about from a regulatory compliance side, but also with our responsible distribution program. Lots of good things that are out there and always encourage people to check it out if they don’t believe us and go on NACD dot com and we can certainly answer questions they may have moving forward.

Ben Sawicki:                 25:50               I know TCC can definitely vouch for all those events and all those resources you guys have. I know Nick and Rob have been involved for a long time and Ray Altenberger with TCC has been involved for a long time as well with the events and regional meetings and things like that. I know we can definitely vouch for all the efforts you guys make to better the industry and be a resource, it’s been fantastic.

Eric Byer:                      26:11               We all think you’re only as good as your member and you guys have been great supporters, we appreciate that. Ray’s been a very active member obviously in our committee structure and with the association for awhile. We appreciate your support and as I said, it’s one of those things where we’re blessed to have members that care. Because they care so much, we work really hard for them to provide them a good opportunity both networking, but also on all the other member services that we have to continue to grow. We continue to grow as an association, which is great. The more we grow the more opportunity we have to provide things to our members.

Ben Sawicki:                 26:41               Sure. Absolutely. I think that’s a good way to wrap things up. Any final thoughts you wanted to get out there Eric or any other updates?

Eric Byer:                      26:49               No, I think that’s about it. A lot going on, appreciate the opportunity. Encourage people to stay engaged, that’s the one thing is you gotta know what’s going on, especially whether it’s trade or security or safety, you gotta know what’s out there to make sure you can prepare from a regulatory perspective, but also any impact of the things coming down legislatively. So always be aware of what’s going on. I think that’s one of the things we do at NACD really well and I encourage folks that are not members of the trade group for their industry to look at it because they have a lot of different educational tools that really help folks say I know how to comply now with something that I didn’t realize beforehand and that’s important for our company to grow.

Ben Sawicki:                 27:25               That’s a good way to put it. I think we’ve seen that too, we have some customers that just wanna know the baseline what’s happening and we have some customers that wanna get very, very detailed and wanna know all the specifics and constant updates. Whichever bucket you seem to fall in, there’s definitely good resources for either type of company.

Eric Byer:                      27:40               Absolutely.

Ben Sawicki:                 27:41               Alright Eric, we appreciate the time this morning. Matt, thank you as well. Great to sit down and chat with you for awhile and hopefully we can have you on another episode some time soon.

Eric Byer:                      27:50               Absolutely, thanks for the time guys. Appreciate it.

Ben Sawicki:                 27:52               Thanks Eric.

The PLASTICS Industry Association Podcast The View from Jamestown

The PLASTICS Industry Association Podcast | The View, Ep 013

TCC Marketing & Sales Specialist Ben Sawicki sat down with members of The PLASTICS Industry Association in Washington D.C. to discuss current industry trends, high-level initiatives and goals across the industry for the association, and hands-on ways individuals and companies can get involved with bolstering the plastics industry, up and down the supply chain.

PLASTICS representatives include Patty Long – Executive VP of Sustainability, Mia Quinn – VP of Communication, Kim Holmes – VP of Sustainability and Katie Hanczaryk – Associate Director of Industry Affairs.

The Chemical Company U.S. China Tariffs Update

Chinese Tariff Update & Chemical Industry Implications

Chinese Tariffs & The Impact on the Chemical Industry. Content updated as of 10/8/2018.

Visit TCC’s official podcast page to stream on your platform of choice.

The chemical industry has been evaluating, and bracing for the potential impacts of President Trump’s announced tariffs on Chinese imports for a few months now. As new developments occur, categories of products are excluded from tariff lists or granted lighter tariffs, businesses must plan the best they can to absorb or pass through the additional costs associated with increasing cost of goods sold.

The Chemical Company’s regulatory department is closely monitoring tariff announcements, and will update this web page as announcements, developments and deadlines are met.

 

What’s happening?

President Trump has announced tariffs following the Section 301 Investigation performed by the USTR with the rationale of protecting U.S. business interests in response to business practices of the Chinese state and some of its’ companies. As of this article, there are three installments to this tariff list.

 

List 1: 25% Tariff on 818 items from China

Tariff “List 1” includes virtually no impact on the chemical industry. There is one section including isotopes and another two lines on rubber articles, but the bulk of this list includes electrical and mechanical machinery.  This list is considered final and its’ tariffs are fully in effect as of July 6, 2018.

The product exclusion request deadline for List 1 products is October 9, 2018.

Click here for the full Federal Register Submission, and see Annex A.

 

List 2: 25% Tariff on 279 items from China

Tariff “List 2” was finalized on August 23, 2018 and includes more products surrounding the chemical industry. Items included on this list are six lines of lubricating oils, two lines of lubricating oil additives, as well as a variety of “plastics, including those mixed with plasticizers”. In addition, there is more mechanical equipment listed in this tariff list.

Click here for the full Federal Register submission, and see Annex C.

 

List 3: 10/25% Tariff on 5,745 Items from China

“List 3” is the heavy hitter on the chemical industry, and has taken effect as of September 24th, 2018. Sections 28, 29 and 38 have the heaviest impact on the chemical industry. One of the most notable products included in this list is Dicyandiamide, a product only produced in volume in China, an important import for agricultural applications.

Unlike the first trade actions, this action is split into two time periods. The tariffs will take effect on September 24, 2018, and be set at a level of 10 percent until the end of the year. On January 1, the tariffs will rise to 25 percent.

Twenty-one of The Chemical Company’s core products are included on this list. For a detailed list and up-to-the-minute pricing, please contact your TCC sales representative, or contact us here for general product or quote information. Hearings regarding this list took place August 20th through August 26th. After these rebuttal comments, the final list of List 3 tariffs will be announced and projected to go into effect.

Click here to see the full Federal Register submission with the full list of tariff line items both fully and partially covered by the action.

 

The Miscellaneous Tariff Bill: Passed (verbally) by the U.S. Senate on July 26, 2018

The Miscellaneous Tariff Bill is slated to reduce, or wipe out tariffs on products that may help reduce costs to U.S. businesses and consumers, with three key requirements to be considered:

The bill states: “A decision of the commission on whether or not to include an item in the Miscellaneous Tariff Bill starts with determining:

1. The duty suspension or reduction can likely be administered by U.S. Customs and Border Protection;
2. The estimated loss in revenue to the United States from the duty suspension or reduction does not exceed $500,000 in a calendar year during which the duty suspension or reduction would be in effect; and
3. The duty suspension or reduction is available to any person importing the article that is the subject of the duty suspension or reduction.

The congressional committees may exclude from a miscellaneous tariff bill any petition for a duty suspension or reduction for reasons including that the petition is the subject of an objection from a Member of Congress; or it is for an article for which there is domestic production.”

The bill was agreed upon by the Senate on 9/4, and put on President Trump’s desk on 9/6. The Miscellaneous Tariff Bill grants exclusions to two of the 21 products that TCC manages directly.

The Chemical Company will continue to monitor the tariff updates and impacts across the chemical industry. For more information or direct product information, send us an email by clicking here, and send to the attention of Matthew Francoeur / EH&S Department.

The View from Jamestown: June 2018

The latest chemical industry updates, delivered to your inbox.

Market Updates

The “New Norm” of Logistics, Downstream Effects on the Chemical Industry

The logistics industry is accustomed to seasonal tightness, as well as issues with specific lanes based on weather or laws that last up to a few months. Rather than typical tight conditions, the recent trends in the freight appear to be the “new normal”, with long-term downstream effects in store for the specialty chemical industry and beyond.

Read On Here

U.S. & China Relations Improve, Tariffs Appear on Hold

In May, the Trump administration made meaningful actions to halt the looming trade war with China, leaning on both sides of the bargaining table to repair the relationship and proceed with the global economy in mind.

Both sides appear to have come to an agreement, with China agreeing to buy an undisclosed additional amount of U.S. goods in coming years.

Read On Here

Introducing: The View from Jamestown Mobile App

The Chemical Company is committed to being more than a product and service provider. TCC strives to be one of your most valuable assets, by being a partner in all of your business operations.

As part of these continued efforts, we are proud to introduce our dedicated mobile application, “The View from Jamestown: Mobile App.”.

Pricing trends, market news and analysis, events and conferences, and much more is available through the app, along with additional features and capabilities in the months and years to come. Click the icon below to download.

Security of Supply | The Chemical Company

Security of Supply defines The TCC global strategy to ensure safety, and accountability as well as honest, long-term organic growth.

Our team includes a local technical sales staff based throughout the Americas, a dedicated EH&S team, our integrated logistics managers, vertically integrated producing partners, and committed high-quality customer expert team.

We monitor short-term trends and long-term opportunities, acting and investing when the market is right to bring the best value to our business partners and customers.

The View from Jamestown: Podcast Edition is our bi-weekly podcast series that includes content from The View, interviews with industry professionals and business partners, tradeshow previews, and much more.

Stream the June “View from Jamestown” podcast by clicking the image, or via the link below.

June 2018 The View from Jamestown Podcast The Chemical Company
The Chemical Company Weekly Market Update Benzene Ethylene Propylene PGP RGP Crude Natural Gas June 5, 2018

The Chemical Company produces weekly graphics with raw material market information and price changes. To follow along, follow TCC your platform of choice, including LinkedInFacebookInstagram & Twitter, and of course make sure you’re subscribed to The View.

Featured Product: June 2018

Mining Product Category

TCC is committed to continuous growth and expansion of our product portfolio, and the mining product category is our newest expansion.

Click the image or title above to view our expansive line of products for the mining industry. For specific product information and availability, contact product manager Javier Fernandez.

Old lamp in a mine

 

All products are subject to availability, which fluctuates daily. Most products are available from TCC with approximately a one-week lead time.

For more information, click the graphic of the product, or visit thechemco.com.

Monthly Market Movers

Crude Oil: $64.75 / bbl
Natural Gas: $2.93 / bbl
DOW: 24,819
Nasdaq: 7,631

As of: 6/5/2018, Yahoo Finance (Approximate monthly changes)

Dollars & Cents

$1.00 USD =

.854 EUR
.747 GBP
109.756 JPY
12.397 MXN

As of: 6/5/2018, xe.com

American Coatings Show

Indianapolis, IN

TCC's Booth at NPE 2018

NPE 2018

Orlando, FL

The TCC team pursued a busy spring tradeshow schedule, attending the AFPM, American Coatings Show & NPE all in a matter of weeks.

We are proud to welcome all current and new business partners at each show, and are looking forward to following up in the coming weeks!

The Chemical Company’s tradeshow floor team at the 2018 American Coatings Show in Indianapolis, Indiana.

The View from Jamestown: Podcast Edition
Episode 006: The View, June 2018

Did you catch our Security of Supply campaign placement in the recent AFPM ICIS print magazine?
If not, click the graphic to learn more!

The Chemical Company is committed to giving back to our local community, and to the chemical industry as a whole. Our Love Chemistry campaign encompasses our fundraising and charitable efforts year after year. 

The “New Norm” of Logistics, Downstream Effects on the Chemical Industry

A variety of factors drives the specialty chemical market and chemical industry as a whole. Material availability, price fluctuations, geopolitical issues on a local and global scale and more, all contribute to cost changes, either for or against profitability. However, all potential hiccups to a production timeline are at the mercy of the transportation & logistics industry, one that accounts for 10 cents of every dollar in the U.S. economy (Donald Broughton / MSN).

The first half of 2018 saw unprecedented changes across the logistics industry. The average age of truck drivers continues to sit around the age of retirement, approximately 65 years old, an age that continues to skew older as ELD mandates are fully enacted, and today’s millennials choose not to enter the logistics marketplace. This tightness is clearly reflected in the rising cost of dry van trucking, raising the spot price from $1.41 in 2014 to $1.85 per mile in 2018 (MSN).

As of April 1, 2018, ELD Mandates proposed and enacted by the Federal Motor Carrier Safety Administration (FMCSA) officially went into effect, meaning drivers found out of compliance may be ticketed, and placed out of service until their trucks comply. Acutely opposed to significant industry changes, many older drivers have chosen to retire or find other work rather than submit to a new way of working, an issue that continues to push drivers out of the market faster than they are coming in.

Unforeseen and unprecedented shortages of OTR (over-the-road) freight options has pushed capacity onto railroad transportation, a medium that saw 6.5% growth in March 2018 compared to the same period in 2017. While railroad may be a savior for particular products or transportation lanes, it is a slower mode of transport, and often requires much further advanced planning and processing, which some shippers aren’t able to provide.

Nearly all goods manufactured, produced and/or sold in the United States are aboard a truck or rail car at some point in their lifespans, whether as early-on raw materials or as last steps before reaching end consumers. In many situations, and especially in the specialty chemical market, goods are moved multiple times as they go from raw materials to usable pieces or portions of final, consumer-ready products.

No industry or product category is exempt from these assumptions, whether it is produce, children’s toys, technology, agricultural or farming product or quite literally, anything else one might see in a shopping mall, industry wholesaler, or grocery store.

A comment from Donald Broughton of Broughton Capital published in a recent report on MSN stated, “Logistics and transportation account for almost 10 cents of every dollar in the U.S. economy. If there is a 10 percent increase in transportation costs, that gives you a 1 percent increase in inflation for the broader economy. That’s real.”

The logistics market is accustomed to tightening and easing market conditions like weather, seasons, seasonal product demand, and available truckers fluctuate. The current major issues in today’s freight market, however, don’t appear to be tightening market conditions. The market seems to be entering the new norm of the logistics industry for what will likely be years to come.

 

References
www.MSN.com

U.S. and China Relations Improve, Tariffs on Hold

Trade relations between the US and China improved this weekend.

The Trump administration made meaningful actions to put the looming trade war with China on hold after Treasury Secretary Steven T. Mnuchin said they would refrain from implementing significant tariffs on various Chinese goods.

In a joint statement on May 19, China agreed to purchase increased amounts of U.S. goods, including agriculture, energy, and manufactured goods. However, China has not formally released a quantitative figure committing to the amount they will purchase, and when.

The announcement comes after President Trump announced tariffs of $150 billion on Chinese goods, including an initial $50 billion set to take effect in the coming weeks. China retaliated with tariffs of an equal scale, all of which has been in stalemate and a state of uncertainty over the past month.

The U.S. – China trade deficit reached $337 billion last year, by far the largest of any country.

These announcements come through a mix of the joint statement, statements by Treasury Secretary Mnuchin, and President Trump’s personal Twitter account.

President Trump is scheduled to meet with North Korean ruler Kim Jong Un in Singapore in early June, and the trade talks with China may be a precursor to assistance soliciting North Korea to give up their nuclear arsenal.

It is unforeseen and unpredictable what may happen with the U.S. and China trade relationship, and tariffs may likely not be entirely off the table. However, the recent news and announcements appear to be a sign toward deescalating potential trade war concerns and economic stability between nations.

 

Resources:

http://www.latimes.com/business/la-fi-china-us-trade-war-on-hold-20180520-story.html
https://www.cbsnews.com/news/trump-says-barriers-and-tariffs-with-china-are-coming-down/


https://abcnews.go.com/Politics/wireStory/us-china-beijing-commits-buying-american-goods-55297175

The Chemical Company Crude Oil

Crude Oil Inventories & Price in 2018: High Prices, Immediate Impacts

In early January 2018, oil prices hit their highest levels in more than three years. “U.S. crude oil inventories are at their lowest level since August 2015. OPEC is getting closer to its target of reducing OECD industrial stocks to the five-year average,” says PVM Oil Associates analyst Tamas Varga.

The Chemical Company Crude Oil

Data from the U.S. Energy Information Administration showed that crude inventories fell by almost 5 million barrels to 419.5 million barrels in the week of January 5, 2018. This drop is likely due to the extreme cold weather that stopped some onshore output in North America, which was expected to be short-lived. Production cuts led by OPEC and Russia that started in January 2017, and are set to continue throughout 2018, have underpinned charges. There is still downward pressure in the physical market, where the second and third largest OPEC producers have cut their prices to remain competitive.

The oil price decline that began mid-2014, when the price of oil was consistently over $110/bbl, has changed the fundamental economics of the global chemicals industry, and has brought about widespread uncertainty. Additional supply from North American shale oil and continued high production levels from OPEC are likely to make a slow but steady recovery.

Nonetheless, prices will need to recover over time to permit investment in production and exploration. Over the past ten years, oil prices have gone through at least two complete cycles, and more significant swings are likely to happen. During this time of ever-changing prices, setting short and mid-term plans will continue to be necessary.

Oil is one of the key ingredients in the manufacture of various chemicals and related products. Consequently, many chemical firms benefit from lower crude oil prices. However, companies using natural gas as opposed to oil for their feedstock do not enjoy those benefits, resulting in the cost of natural gas affecting chemical firms more than the price of oil in those cases.

Additionally, a substantial decline in crude oil prices would impact the market in other ways. It makes the economics of petroleum substitutes a great deal less attractive, including bio-based and battery chemicals. This issue is causing companies, from global powerhouses to niche firms, to reevaluate their strategies.

 

 

Sources:
https://www.cnbc.com/2018/01/10/oil-markets-near-3-year-highs-on-tighter-us-market.html
https://www.icis.com/resources/news/2018/04/10/10210537/us-on-pace-for-record-oil-natgas-production-in-2018/

DINP Reproductive Toxicity Classification Rejected by ECHA

The European Chemicals Agency’s Risk Assessment Committee (RAC) has concluded that no classification is required for reproductive toxicity for DINP after a lengthy research and analysis period(1,2). The ECHA concluded that there is no required classification regarding issues surrounding fertility and/or development.

The debate surrounding DINP classification was originally submitted by Denmark in 2015(1), leading to a large-scale scientific and industry debate on the proposal and potential hazards of the material.

The 6-page ECHA news release annex, 369-page review report and article from the European Plasticizers trade association are available here and linked below.