September 22nd, 2017
Dear Valued Clients,
As our thoughts and prayers were being extended to the residents of the States of Texas and Louisiana, it was almost unfathomable to think that the Caribbean, along with Florida, Georgia, and Carolina coasts, were then hit with similar devastation only a week later. As if Harvey, and Irma weren’t enough, Maria completely decimated the U.S. territory of Puerto Rico, along with many other neighboring islands. Between humanitarian and re-building efforts, much of those areas will require as much man power, raw materials, transportation, and care as humanly possible.
The vast majority of the products that we provide are resin based, and are dramatically effected by production in the petrochemical industry. Most of the oil refineries, chemical facilities, ethylene, ethane and other feedstocks needed to make polyethylene had been forced to shut down for a time, which equated to 53% of domestic production, and many more had lost inventories that were no longer of quality to distribute. Manufacturers had declared Force Majeure and some are unable to meet prior commitments to orders placed for shipment before the storms. While just about all the plants are back up and running, nobody yet knows when they will all be at full capacity again. In addition to the raw material production shortfalls from companies like Dow, Exxon-Mobil, and BP-Chevron that are needed to produce poly products like stretch film and bags, there is also the increasingly difficult to navigate empty rail car embargo that has been put on those manufacturers trying to move product in and out of Texas.
All of this has forced producers to set allocation limits on their clients, along with enforcing raw material (resin) increases by all five major petrochemical companies. While there have already been increases in the past few weeks, we had been told not to expect those as the final position for the market, nor should we expect previous lead times for some time to come. We have just been formally notified of another increase of 6-7% going into effect on 10/16/17. As always, we will try to position ourselves in a manner that allows for us to help our valued clients for as long as we can. We must, however, ask that you help us in placing your orders for stretch film, poly bags, and other resin based products, well in advance of your anticipated need. With such a large portion of our clients having their busiest season starting in the next week or so, we just want to make sure we can ensure no disruption in your supply needs.
We value your partnership, and know that you are aware catastrophic events like these are out of our control. Thank you for your continued partnership.
VP of Operations & Sales