LyondellBasell raises polymer delivery costs

LyondellBasell today informed North American customers it is raising prices for bulk hopper truck and packaged product deliveries resulting from increased costs, including higher labor prices.

The company is implementing a 1¢/lb increase for shipments made by bulk hopper trucks, and a 2¢/lb increase for all packaged product shipments. The move will impact polymer prices to customers who purchase smaller quantities of product to be delivered by truck and box rather than by railcar.

"As our industry has become keenly aware in recent months, the trucking industry has struggled with driver continuity for a variety of reasons, including the retirements of experienced drivers, drivers departing the industry, and a highly competitive recruiting market between carriers," the letter said. "The industry is also facing increased costs for new and used shipping assets."

The price increase is intended to help LyondellBasell attract and retain drivers and to support continued shipping demands.

The move follows a similar move made by Flint Hills Resources in early December. That company raised prices for delivery by bulk truck by 1¢/lb and for other packaged deliveries by 2¢/lb, according to an 8 December customer letter.

Market participants were not surprised by the higher prices, citing increased shipping delays and longer lead times for truck deliveries, which have been a problem for months.

"Logistics and warehousing is crazy expensive right now," said one distributor.

Other producers are expected to announce similar increases, said another trader.

The LyondellBasell announcement follows a 4 January announcement by Quantix, a leading supply chain services company to the chemical industry, that it would be rolling out targeted pay increases in its plastics and liquid chemical divisions beginning in January 2022. The company said the increases would represent the largest driver compensation change in the company's history, and would total more than $30mn.

By Michelle Klump