Chemical supply chain businesses in the United Kingdom are still grappling with high operating costs, subdued demand, and severe logistics disruption, according to the latest quarterly survey from the U.K.’s Chemical Business Association.

For U.S.-based chemical manufacturers and transporters, the U.K.’s challenges serve as a barometer for global supply chain volatility and a warning of potential ripple effects in international trade. “The latest survey highlights just how challenging the business environment has become for companies across the U.K.’s chemical supply chain,” CBA CEO Tim Doggett said in a news release.

“Businesses are facing rising costs on multiple fronts, from logistics and energy to taxation, employment, regulation, and compliance. The cumulative effect, combined with subdued demand and continuing uncertainty, is placing increasing strain on competitiveness and leaving many companies working hard simply to stand still.”

Logistics bottlenecks and escalating costs

Logistics remains the most pressing concern for the chemical industry. The CBA’s Quarterly Chemical Supply Chain Trends Survey for Q2 2026 found that 87% of respondents cite escalating shipping costs as a critical concern, while 73% are experiencing ongoing problems with ocean freight due to global disruptions, including the continued blockade of the Strait of Hormuz.

For U.S. transporters and bulk liquid carriers operating in international markets, these findings highlight a persistent instability in global shipping lanes that continues to drive up the cost of doing business. Furthermore, the U.K. is seeing a sharp spike in over-the-road capacity issues; 31% of U.K. businesses reported problems in Q2, a massive jump from 8% a year prior. This trend toward severe driver and capacity shortages in Europe often precedes similar tightening in the U.S.

Erosion of profitability and market stability

The economic climate for U.K. chemical businesses is increasingly fragile. The survey highlights:

• Worsening order books: 25% of businesses reported slower sales and weaker order books compared to Q1.
• Margin pressure: Only 6% of respondents expect sales margins to increase in the next quarter, while 36% reported that margins have already worsened.
• Operational reductions: The combination of high energy costs, taxation, and regulatory complexity has already led to several high-profile closures and decisions by companies to exit the U.K. market entirely.

Implications for U.S. manufacturers

As U.K.-based suppliers face potential headcount reductions—with 16% of firms planning to reduce staff in Q3—U.S. manufacturers reliant on U.K.-sourced intermediates or specialized chemicals may face supply chain delays or material shortages, the report suggests.

The CBA emphasizes that once investment and supply chain capability are lost, they are “extremely difficult to rebuild.” For the U.S. bulk chemical transport industry, the U.K.’s situation underscores the necessity of diversifying supply routes and preparing for sustained high costs in the global movement of chemical goods.

As the U.K. government considers a long-term plan to support national resilience, current data suggests that without immediate stability and cost relief, the chemical supply chain remains in a precarious position. “The U.K. chemical supply chain has enormous potential to support economic growth, strengthen domestic manufacturing, and improve national resilience. The new prime minister’s commitment to bring forward a 10-year plan for Britain, alongside his ambition to reindustrialize the country, is therefore welcome,” Doggett concluded.

“However, neither can be achieved without a strong, competitive, and resilient chemical industry and supply chain.”