FEATURE

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Elevating the Role of Distributors in Technical Support and Value-Added Services

By Lisa Anderson, Founder and President, LMA Consulting Group

By Karen Parker, Editor-in-Chief, ASI

Eric Byer, president and CEO of the Alliance for Chemical Distribution, discusses how distributors are meeting the rising demand for specialized services and expertise.

As global supply chains grow more complex and manufacturers increasingly seek tailored technical solutions, the role of chemical distributors is undergoing a significant transformation. According to a 2024 market report by Grand View Research, the global chemical distribution market is projected to reach $412.4 billion by 2030, driven by growing demand for specialty chemicals, regulatory compliance, and value-added services across key industries. At the forefront of this evolution is the Alliance for Chemical Distribution (ACD) — formerly the National Association of Chemical Distributors — which represents more than 400 companies that source, formulate, blend, repackage, warehouse, transport, and market chemical products across North America. In this interview, Eric Byer, president and CEO of ACD, shares insight into how chemical distributors are adapting to serve as critical strategic partners in the adhesives and sealants industry and beyond, navigating shifting regulatory frameworks, supply chain disruptions, and a heightened demand for technical expertise.

ASI: How do you see the role of distributors evolving as manufacturers increasingly look for technical support and value-added services?

Eric Byer, president and chief executive officer at the Alliance for Chemical Distribution (ACD): The role of chemical distribution companies has certainly changed over time. The functions of our industry go well beyond just transporting chemical products. We’ve experienced a shift in commodity distribution to specialty distribution, which has defined the last century. Today, there is a complex range of business functions and services chemical distribution professionals oversee. Businesses have experienced changes driven by technological advancements, sustainability initiatives, regulatory changes, and changing consumer demands.

As these services evolved, so have the offerings of Alliance for Chemical Distribution (ACD) members. ACD’s supply chain partners, including those in the adhesives and sealants industry, rely on chemical distribution to process, blend, and formulate, but they also trust our members’ logistical and technical expertise, which is required to deliver products safely and ensure functionality. Apart from this logistical expertise, customers rely on members’ advanced industry knowledge and technical support, including sourcing and procurement, specialization, warehousing management, packaging, sales, health and safety protocols, and compliance support.

Businesses have also adopted breakthrough technologies to meet market trends, such as digitalization and artificial intelligence. This has helped our members increase operational efficiency and enhance products and services to better meet the specific needs of our customers.

Solutions-oriented services, including customer support, formulation support, logistics, data transparency, regulatory support, and customer data utilization ensure that our industry stays ahead of our supply chain partners’ needs. It also gives us a competitive edge by providing the latest industry products while maintaining functionality, durability, and sustainability.

Learn more about distributors within the adhesives and sealants industry by visiting our Distributor Directory here.

ASI: What are the biggest supply chain challenges currently affecting the chemical distribution business?

Byer: Business and consumers alike are trying to get ahead of the latest and most sweeping tariffs. As our adhesives and sealants partners know, chemical distribution relies on international trade to effectively supply and deliver the chemical products essential to everyday life. Tariff uncertainty is undoubtedly tightening the supply chain and increasing operating costs for businesses across the nation. While ACD is supportive of efforts to protect U.S. industries from discriminatory practices perpetuated by foreign nations, the use of exceedingly high and ever-changing tariffs or duties are creating real-time ripple effects to the industry. That’s why we are encouraging the administration to swiftly come to trade agreements with other nations.

Additionally, freight rail has continued to be unreliable and inadequate. The chemical industry is one of the largest customers of freight rail in both volume and revenue. Despite this, the rail industry has done little to appease our concerns about rate increases, safety measures, disruptions, and delays. To make matters more difficult, the proposed rail merger between Union Pacific and Norfolk Southern would exacerbate these challenges to the detriment of its customers. The freight rail industry is already highly concentrated, which is why the U.S. Surface Transportation Board (STB) must oppose this merger. It fails to meet the high standards of serving the public interest and enhancing competition.

Changes in the global landscape, economy, and political environment play a role in the policy and regulatory priorities. The current administration is taking a deregulatory approach, which ACD supports as many of the previous final rulemakings have placed administrative and costly burdens on businesses across the supply chain. Regulatory certainty is needed, and ACD is working to help businesses across the industry navigate these changes and ensure compliance.

ASI: How have lead times and availability for key raw materials changed over the past year?

Byer: This certainly is not business as usual. Many of the trade dynamics affecting key end-users will translate into lower demand for basic chemicals and chemicals used in adhesives and sealants. Based on ACD’s recent economic analysis, conducted by Swift Economics LLC, in May, demand for specialty and fine chemicals decreased for a second month. While improvements occurred in other sectors, like pharmaceutical ingredients, electronic chemicals, and plastic additives, the longer-term inventory impacts have made it difficult for our supply chain partners to make long-term strategic plans.

To make matters more complex, many of the chemical products U.S. industries rely on today are no longer produced domestically. As the administration works on trade agreements, it must consider the impact these decisions have on the access to the products essential to our economic and national security. Free-trade programs, like the Generalized System of Preferences and Miscellaneous Tariff Bill, are important to reducing the tariff burden on products essential to U.S. industries that cannot be accessed here at home. The administration should work with Congress to renew these trade programs that help us ensure we are able to compete globally.

ASI: Have tariffs or other trade regulations impacted the ability of distributors to import or distribute raw materials? Do you anticipate that situation to change in the near future?

Byer: We are currently experiencing the highest tariff levels since the 1930s. Since March 2025, the uncertainty caused by tariffs have resulted in businesses taking fewer risks, deferring decisions, investing less, and hiring fewer people. Chemical distribution businesses, large and small, are searching for clarity on these policies. Our members, and their customers, are constantly questioning how these pauses, trade deals, and frameworks will impact cargo, who is paying for these tariffs, and what the long-term impacts will be on the supply and demand.

This all depends on the specific trade agreements that are finalized by the administration and our trade partners. Businesses cannot work off broad trade frameworks, and these details are important to long-term investment decisions and strategic planning.

According to an ACD analysis conducted by Swift Economics LLC, U.S. output contracted in the first quarter as businesses built up inventories ahead of anticipated increases in tariffs. Business optimism has retreated, and capital projects are likely to be on pause until certainty returns. Since the chemical distribution industry primarily sells to other manufacturing industries, tariffs are expected to negatively impact U.S. competitiveness. Based on a “heat map” that examines economic outlook for select specialty chemical segments, results for the adhesives and sealants industry will be generally positive in 2025, but this likely won’t last in 2026 given a slowing broader economy. The industry will begin to gain traction again in 2027. Volumes within the chemical distribution industry will be challenged through 2026 but will regain momentum thereafter.

The chemical distribution industry is a critical link to the complex and dynamic U.S. economy. As we continue to navigate these uncertain times, we must ensure that our industry — and the industries we support — continue to grow, create jobs, and deliver the essential ingredients of daily life today and in the years to come.

ASI: How are you preparing for future disruptions, whether they are regulatory, environmental, or economic?

Byer: Trade dynamics have already impacted U.S. imports and exports. Tariffs on raw materials are also impacting downstream users, including those in the adhesives and sealants industry.

One lesson our members learned from the pandemic is that any supply chain disruption can result in months of recovery. We noticed this earlier in the year when West Coast ports were bracing for a drop in goods coming from China. This is making it difficult for ACD members, many of whom are small businesses, to anticipate changes to inventory or fulfill customer requests. If costs remain too high on certain products, especially those only available by import, businesses will face even greater challenges. These decisions could cause reverberating impacts across the supply chain, including on trucking, rail, and warehousing services as well as our downstream users who rely on these chemical products for their own success.

On the regulatory front, however, businesses are experiencing some relief. Previous changes made at the agency level imposed significant costs on businesses and placed companies in a difficult position, particularly amid high inflation and labor shortages. Regulatory certainty is important to supporting businesses, the economy, and the workforce, and we welcome the administration’s ongoing regulatory review to ensure policies are delivering on their intended purposes.