California Communities to Benefit from Chemical Distribution with the Help of Congressional Support

Author: Jillian W. Cimo, Vice President, Community Outreach

Coast Southwest, in coordination with the National Association of Chemical Distributors (NACD), hosted U.S. Congressional Representative Young Kim on August 11, 2021, to discuss the economic impact the chemistry industry has on local communities. The hour-long event included a tour of Coast Southwest’s Orange County operations and highlighted the $32.69 million economic contributions of the thirteen chemical distribution facilities located in California’s 39th district.

During the meeting with Representative Kim, industry leaders had the opportunity to discuss the benefits that chemical distributors bring local communities as well as the unique challenges and policies that are currently impacting the industry.

Economic Impact of Chemical Distribution

While a vast number of companies and consumers benefit from the reliable delivery of chemicals that companies like Coast Southwest provide, the various ways the industry benefits the communities it serves are not as well known. This positive impact was discussed with Congresswoman Kim and it included the following:

• Jobs – Chemical distributors provide 133 high-quality jobs in the 39th District with an additional 223 jobs in related fields.
• Wages – Employee wages total $10.98 million each year with an average wage of $82,500. This is 152 percent higher than the average in California.
• State-wide Impact – Beyond the 39th district the chemical distribution industry provides 6,625 direct jobs and another 12,703 related jobs in the state of California. These jobs generate $1.39 billion in wages with an overall economic impact of $4.02 billion.
• Contribution to Commerce – Chemical products are used in nearly every industry sector in the U.S. economy so the reliable distribution of chemicals plays an integral role in the supply chain. With more than 750,000 end-users in incredibly diverse industries, chemical distribution benefits companies and consumers from coast to coast.

Challenges Facing Chemical Distributors

Coast Southwest also had the opportunity to discuss the challenges that chemical distributors are currently facing in the industry with Congresswoman Kim. Many of these challenges are in reaction to the current pandemic the world is facing with Covid-19 and are therefore requiring leaders to work with one another to find new solutions. Meetings such as these are integral to finding such solutions as leaders from chemical distributors and government officials address the challenges together.

Challenges facing all chemical distributors in our current climate include:

• The unknown future of logistics and transport as California proposes new mandates on carbon emissions and considers potentially enforcing new electric vehicle requirements.
• Delivery issues due to a shortage in the workforce and lack of drivers.
• Delays in manufacturing due to the aforementioned shortage in the workforce.
• Equipment shortages have led to an average wait time of twelve months for new trucks.
• Shortages of ingredients worldwide resulting in a decline in sales. Companies like Coast Southwest buy their ingredients from every corner of the world so the conditions of global markets affect production at every step of the product cycle.

These challenges are drastically increasing the costs of manufacturing and distributing products in our industry. Coast Southwest is an integrated distribution network with locations strategically positioned across the country. Our branches were chosen in an effort to better serve our customers by delivering their orders in two days or less. However, with the sharp increase in costs, our entire industry is facing the tough decision of either absorbing the rising cost or increasing prices to meet our goals.

In addition to industry challenges related to materials and distribution, chemical distributors are also being impacted directly by government policies that are in the process of being renewed or instituted for the first time.

The Miscellaneous Tariff Bill (MTB) was designed to help domestic distributors by allowing duty-free purchases on imports as long as no domestic competitor exists. Since many chemicals are produced offshore, MTB is crucial to ensure necessary inputs aren’t unnecessarily high in cost for distributors. The NACD is pushing for this bill to be renewed so chemical distributors don’t continue to experience financial hardship.

The Drive Safe Act – Bill 1745 in the Senate directs the Department of Transportation to promote regulations to implement an apprenticeship program for licensed commercial motor vehicle drivers under the age of 21. This bill will directly impact the shortage of drivers affecting the distribution of chemicals.

The Infrastructure Framework currently in Congress is the largest long-term investment in our country’s infrastructure in nearly a century. This bill will reform transportation by modernizing and expanding transit and rail networks across the country and also repairing and rebuilding roads and bridges. This effort will reduce the costs of transportation and distribution.

By discussing these challenges and the impacts that policy changes have on the chemical industry with Congresswoman Kim, awareness can now be spread to the officials who have the power to promote change. NACD and Coast Southwest believe they have found a strong representative after meeting with Representative Kim and are hopeful of what the future holds for the industry.

About Congresswoman Young Kim

The chemical distributor industry is fortunate to have found strong representation with Congresswoman Kim who represents California’s 39th District including parts of Los Angeles, Orange, and San Bernardino Counties, in the U.S. House of Representatives.

Kim fights to grow jobs as an immigrant, small business owner, community leader, and mother. She’s also proud to be one of the first Korean-American women ever to serve in Congress and has been serving her district in numerous organizations for years. She lives in La Habra with her husband and has four grown children.

Coast Southwest, along with the NACD and all chemical distributors, are grateful for the time that Congresswoman Kim spent with our leaders.  We look forward to seeing the positive changes and growth that are on the horizon for our industry after finding such strong representation in Congress.