A 2019 report by John Dunham and Associates published on the National Association of Chemical Distributor’s (NACD’s) website outlines the direct, indirect and induced economic impacts of the chemical distribution industry at the congressional district, state, and national levels. This report clearly demonstrates that transactions involved in chemical distribution fuel a nationwide economic engine. Summarized below are some of the key findings from the NACD website

Chemical Distribution on the Economy

 

What is the Impact of Chemical Distribution to the US Economy?

The chemical industry directly impacts 96% of markets in the US. Think about it.

Every industry from automotive to agriculture, construction to electronics to health care uses chemicals that have to be manufactured, stored and distributed. The calculated economic impact of the chemical distribution industry in the USA is a notable $19.3 billion annually. The Federal government generates $3.8 billion in tax revenue from the chemical distribution industry. An additional $3.6 billion dollars are generated for state and local taxes. Further more, approximately 81,000 people are directly employed by the chemical distribution industry at an average annual salary of $83,700. 39% higher than the national average. Over 4,000 facilities are in operation across all 50 states. These facilities are predominantly family-owned or small regional businesses with an average of 26 employees.

In addition to the approximately 81,000 people directly employed in chemical distribution, additional 150,650 jobs are created through indirect and induced impacts. Indirect impacts are B2B transactions. For example, over 4,780 real estate industry jobs result from the chemical distribution industry when firms use an agent or broker to purchase or lease land for a new warehouse or buy an existing building to expand their operations. Furthermore, over 4,260 jobs depend on employees of this industry, or those of their suppliers, employing an agent to help them either purchase or sell a home or conduct other real estate transactions. This equates to nearly 9,050 total jobs that chemical distribution supports in the U.S. real estate industry. People working in these jobs generate over $1.9 billion in economic impact for the American real estate industry. This indirect economic boost has the most impact in states where there is increased chemical manufacturing or bulk liquid distribution needs such as Texas and California. Pennsylvania, New York, and Ohio have billion-dollar chemical distribution industries as well.

 

What are the Economic Impacts of Chemical Distribution to the Transportation System?

2% of the total Federal Tax revenue is spent on transportation and infrastructure. The transportation system includes an intermodal network of shipping channels, port facilities, railways, air freight, the national highway system, and regional/local roads and bridges which must be planned, constructed and maintained to meet ever-changing consumer demand and the Amazon.com(R) driven expectation for fast, low-cost delivery.

The chemical industry is one of the United States’ largest shippers transporting over 881 million tons of product in 2015. Large quantities of bulk liquids are imported and exported daily. Massive cargo ships require ports to be dredged, and road and rail access to terminals maintained. The maintenance and construction of roadways and bridge enable heavy equipment such as chemical tank trailers and tank chassis to transport bulk liquid chemicals efficiently across the country. This infrastructure receives hard to use from chemical distributors, but an efficient highway system benefits all consumers.

A large portion of chemical manufacturing and production takes place in the Gulf Coast region. Petroleum products such as oil and natural gas, are a major contributor to the nation’s chemical distribution industry. Often, the largest deposits of oil, gas, and petroleum are located in remote regions and require the construction of pipelines and roadways for extraction.

1Indirect economic effects are the results of business-to-business transactions. For example, more jobs are indirectly created in the real estate industry.

Induced economic effects are the results of increased personal income caused by direct and indirect effects. Businesses experiencing increased revenue from the direct and indirect effects will subsequently increase payroll expenditures (by hiring more employees, increasing payroll hours, raising salaries, etc.)

 

distribution industry. Often, the largest deposits of oil, gas, and petroleum are located in remote regions and require the construction of pipelines and roadways for extraction.

In order to lower costs, it is expected that dredging projects at ports in the Gulf region and new railway infrastructure will be implemented. Rail is faster and cheaper than transporting large volumes of bulk liquids via. tank trailer. Currently, 54% of industry shipments are made via tank trailers. These improvements will have a beneficial impact on the local and regional economies.

Chemical Tank Trailers

 

Where can I Lease Chemical Tank Trailers and Tank Chassis?

At an economic impact of $19.3 billion annually, the chemical distribution industry has a meaningful impact on the US economy. Direct impacts, which include employees hired and products sold, and indirect impacts such as leasing equipment or renting a warehouse, both contribute to this total. When considered globally, these impacts increase to $204.37 billion. The global economy and growing consumer demand from healthy petroleum, construction, automotive, electronics, and pharmaceutical sectors translate to a growing demand for chemical distribution. If you are part of this growing chemical distribution industry and require additional bulk chassis and trailers, contact Matlack Leasing LLC today to discuss your leasing options for chemical transportation equipment. Our nationwide fleet of tank chassis and tank trailers is available to supplement your growing fleet.

 

https://www.nacd.com/legislative/economic-impact/
https://www.grandviewresearch.com/industry-analysis/chemical-distribution-market
https://www.pcimag.com/articles/106633-nacd-and-member-companies-are-vital-to-the-chemical-supply-chain
https://www.americanchemistry.com/Transporting-Growth-Delivering-a-Chemical-Manufacturing-Renaissance.pdf