Pack Logix Experts Explain How To Pivot Amid Recent Challenges

A global pandemic. A winter weather emergency. An explosion at one of the largest lubricant manufacturers. A rise in the cost of packaging materials. A mismatch in production, supply, and demand. The events of 2021 came together in a perfect storm to delay and disrupt the grease industry. It left businesses reeling, and it has felt hard to see an end in sight.

Where does this leave the grease industry for 2022? Our Pack Logix experts have analyzed the latest shifts to the lubricant market, so read on for a breakdown of these trends and how we can support your business to pivot amid ongoing challenges.

Disruptions

A number of factors arose and built on each other in the past year and a half to change the outlook for the grease industry.

Lockdowns amid the pandemic drove down demand for grease and fuel in mid-2020. In response, oil companies significantly reduced refinery production (especially for base oils) to adjust to lowered demand. Likewise, lubricant additive manufacturers also dialed back production.

As business returned to normal, demand for lubricants rose, and prices followed. The supply of base oil and additives struggled to catch up to demand—especially additives, which experienced deep allocations. In fact, there were seven lubricant price increases in 2021, and each was the direct result of short supply and the higher costs of raw material and other inputs. Plus, a shortage of truck drivers also resulted in difficulty delivering finished lubricants in a timely fashion.

Unusually bad winter storms in Texas in February 2021 turned into a disastrous situation. The storms further disrupted the supply of base oil and additives and added to the supply and demand imbalance and supply chain interruptions.

In June 2021, the Chemtool plant in Rockton, Illinois, experienced an explosion and massive fire that could be seen for miles, forcing a five-day evacuation of homes nearby. The Lubrizol-owned plant produced more industrial grease than any other plant in the country, so its loss turned the industry upside down.

Supply chain slowdowns and the lack of usual suppliers means that many products—both domestic and imported—are still seeing extended lead times. Additionally, truck driver shortages and overloaded ports are affecting many products. To name a few:

Cartridges: This popular packaging is harder to come by, and customers also tend to face an increased minimum order quantity (MOQ).
Drums, Kegs, and Pails: These packaging options are seeing increased pricing because raw material is harder to come by. In March 2021, the Suez Canal was blocked for six days by a container ship, causing a backlog of container ships in other ports. It also delayed the delivery of needed materials for steel (which is used for drums and some kegs) and resin (used in plastics for packaging such as pails).
Preprinted Squeeze Tubes: Tubes imported to the U.S. are held up in overloaded ports and at Customs, often extending lead times up to seven months.

Is There an End in Sight?

It’s hard to predict when the grease industry will feel “back to normal.” But amid the recent challenges, there are a few bright spots. Experiencing hardships—whether material shortages or supply chain holdups—forces your business to address problems in new ways. Some industry examples of innovation include:

Increase in Biodegradable Bases: Having better bases can help grease manufacturers who want to develop more environmentally-friendly products to meet Environmental Protection Agency (EPA) regulations. The EPA rules require industries to pre-treat pollutants in their wastes to protect wastewater treatment plants. Manufacturers view bio-based grease as a promising market as there is no need to pre-treat these lubricants before releasing them into the environment.
Move to Decentralize and Diversify: In the absence of Chemtool, businesses have learned to build broader relationships when they couldn’t get materials from their usual suppliers. This branching out is what helps make the industry stronger.
Rise in Automation: Automation is helping businesses in a wide range of markets to overcome challenges by filling gaps in staffing, increasing production rates, and improving workplace safety.

As the lubricant industry changes, you need a partner who can keep up and support you along the way. Pack Logix has the experience and the technology to pivot with today’s challenges.

State of the Grease Industry:
Weathering the Disruptions

Pack Logix Experts Explain How To Pivot Amid Recent Challenges

Disruptions

Is There an End in Sight?

GET IN TOUCH

Put Our Expertise to Work
Contact Us Today!

LOCATIONS

CORPORATE OFFICE

DISTRIBUTION CENTER

QUICK LINKS

State of the Grease Industry: Weathering the Disruptions

Pack Logix Experts Explain How To Pivot Amid Recent Challenges

Disruptions

Is There an End in Sight?

GET IN TOUCH

Put Our Expertise to Work Contact Us Today!

LOCATIONS

CORPORATE OFFICE

DISTRIBUTION CENTER

QUICK LINKS

State of the Grease Industry:
Weathering the Disruptions

Put Our Expertise to Work
Contact Us Today!