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US $14 Billion Supply Chain Investment May Help Chemical and Resin Sectors
January 19, 2022

In a move that may provide some relief to the petrochemical and resin industry, the US said today it will invest more than $14 billion for over 500 projects, across 52 states and territories, aimed at strengthening the nation's supply chain. During a White House press conference, President Biden said the US Army Corps of Engineers would invest the roughly $14 Billion from the Bipartisan Infrastructure Law and other appropriations to strengthen port and waterway supply chains and bolster climate resilience.

The investment is latest in the country's ongoing efforts to alleviate the current domestic and international supply chain crunch. The US has already implemented initiatives aimed at helping to ease supply chain constraints and move more cargos in 2021, which include recruitment programs to help get more truck drivers on the road.

Further building on those initiatives, the Corps of Engineers is committing $4 billion through Biden's Infrastructure Law to expand capacity at key ports, allow passage of larger vessels, and further enhance the country's ability to move goods. The waterside investments will compliment landside investments at US ports and across the goods movement chain such as the Port Infrastructure Development Grants announced in December.

For the fiscal year 2022, specific US projects include:

- Providing $858 million to support the replacement of locks that keep water levels high enough for large cargo ships to pass through the upper Ohio River, west of Pittsburgh. The Administration will also provide more than $470 million to complete construction of a new lock along St. Mary's River in Sault Saint Marie, Michigan, which serves as a passageway for nearly all domestically produced iron ore.

- Investing $8 million to improve commercial navigation and allow larger and more ships to pass at the Port of Long Beach, California

- Investing $69 million to improve navigation and expand capacity at Norfolk Harbor, Virginia, which handled 67% more containers in 2021 than it did 10 years ago. Work will include deepening and widening the harbor's shipping channels to improve navigation and enable safer access for larger commercial and naval vessels, and to provide significant new economic opportunities to the region.

The resin sector is among the many industries that have been impacted by supply chain challenges in 2021, which contributed to tight supply availability, record-high prices, and long delivery lead times extremely tightly for truck, rail, and waterborne shipping. Resin producers and resellers continue to face difficulties in January moving inventory due to supply chain issues, a lack of containers, personnel, and ship space. The shortage of truck drivers has hit petrochemical and resin companies especially hard as packaging materials, labor, warehousing, freight, and terminal costs keep increasing.

By Brian Balboa for The Plastics Exchange.

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