Ask Burnett about supply chain issues, however, and you'll get a totally different answer. Having materials available to sell is one thing, but getting them to customers is a totally different subject, no matter what method of shipping you're using.
Renkert does the large majority of its business in North America, but it also operates a terminal with four tanks in Antwerp, Belgium, and ships containers to service its customers in Asia. It ships by truck, rail car and ISO containers, and also moves shiploads from the U.S. to supply its Antwerp terminal.
By far the biggest issues have come with trucking, and he doesn't see an improvement on the horizon for 2022. Renkert ships freight by truck both in the U.S. and Europe, and said a lack of drivers—particularly for long-haul routes—has been the primary reason for the troubles.
But trucking hasn't been the only problem area, Burnett said. Getting space on ships to move ISO containers from the U.S. and Europe to Asia has been difficult. "For the first time last year we got kicked off a ship after having gotten space for products because someone was willing to pay more for the space," he said. "In my opinion, that's been unheard of (in the past)."
All of this has added to costs, some of which are more difficult to recoup from customers than others. The one saving grace is that everyone in the industry is in the same boat (pun intended), and all parties need to have flexibility.
"Realistically, every supplier is having problems and experiencing the same problems," Burnett said. "It's one of those things where there is a lot of empathy out there because all of us are going through the same thing in the supply chain."
Because of the uncertainty regarding transportation issues, Renkert has been keeping higher levels of inventory available to service customer needs, having to "operate from the top of the tanks instead of the bottom of the tanks," as Burnett likes to say.
"We've been having to keep the tanks full, especially when you look at the European business," he said.
Ergon also has seen the challenges in the supply chain, both for cargoes on ships and even regional shipments. White did say the issues seem to be slowly easing, adding that his firm may be in better shape than others.
"At Ergon, we are fortunate to have sister companies that provide shipping, trucking, and terminaling services, allowing us greater access to crudes and greater flexibility in getting our products to customers than some companies might have," he said.
With the supply chain and other factors, pricing pressure in the RPO business has started, and is expected to continue even more in 2022.
White said the adverse weather conditions of 2020, combined with the global COVID pandemic and volatile crude prices, led to the significant price increases that the market has seen over the past year and a half.
Burnett said that in 2021, North American pricing was stable in the markets it serves, and even moved down some in Europe and Asia. But he doesn't see that being the case in 2022. Some of the crude oil economists predict crude oil could go to the $90 to $100 barrel range. Crude prices aren't the only factor impacting RPO prices, but it is one of the largest.
"I see 2022 being a year where somewhere (pricing) has to be addressed," the Renkert executive said. "Cost of transportation being up. Operations being up. Raw materials being up. I think we will see (pricing) across all three continents that we serve begin to move upward."
Sam Cottrill, Rubber News Staff, contributed to this report.