2023 in review: Chemical industry supply chain labor disruptions

The French protests over pension reform in 2023 significantly disrupted the chemical industry supply chain, causing severe production halts across the country. Striking workers blocked access to key industrial areas, hampered refinery shipments, and created potential diesel shortages, among many other disruptions. Our 2023 Year in Review report identified this as the chemical industry’s top disruption for the year. These events unfolded in a rapid, unexpected manner, leaving little time for contingency planning for companies without robust supply chain risk management support.  

Impact on the chemical industry supply chain 

The strikes began on January 19, and over one million people participated, marking the beginning of a nationwide protest movement. Considering that France is Europe’s second-largest chemical producer, the potential impact on the chemical industry supply chain was immediately significant. Nationwide strikes led to production halts at numerous chemical companies, creating ripples in the supply chain due to the sudden drop in output. 

Figure 1: The chemical industry supply chain was disrupted heavily by French labor protests in 2023.  

By March 15, the situation had escalated. Protesters blocked access to a crucial chemical industrial area in Roussillon, which further jeopardized the delicate balance of the supply chain. Just five days later, French refinery shipments ceased. Tankers carrying refined products and crude oil were unable to enter French ports, leading to a potential diesel shortage – a critical component for chemical manufacturing and distribution. 

The chemical sector, being the largest industrial energy consumer, found itself facing higher prices and production disruptions due to these fuel shortages. In response, the French energy ministry had to mandate the release of gasoline and diesel supplies to combat fuel scarcity on March 21. 

Further disruptions ensued as major ports, including Marseille-Fos and LeHavre, were impacted by strikes. The LeHavre port services a major refining and chemical complex, and its disruption added another layer of complexity to the already struggling chemical industry supply chain. From March 7, intermittent disruptions affected 26 other ports across the country. 

By June 6, while no official end date for the strike was announced, participation rates had dwindled, and no further mobilizations were made public. Although this signaled a potential return to regular operations, the effects of the disruptions continued to reverberate within the chemical industry supply chain. 

Lessons for the chemical industry supply chain 

Reflecting on these events, it’s clear that multi-tier visibility would have significantly bolstered the resilience of the chemical industry’s supply chain.  

With a clear view of both upstream and downstream operations, companies could have had more time to plan and respond to the unfolding events. In-depth visibility into risk to supplier operations and  transportation routes could have enabled companies to anticipate potential shortages, bottlenecks, and delays, then make necessary adjustments. 

Moreover, by leveraging advanced analytics and predictive tools, companies with multi-tier visibility could have run scenario analyses to explore alternative supply routes or sources, thus reducing the impact of blockades and port disruptions. 

Figure 2: Chemical industry regulations will increase supply chain liability risk, as shown by the rise in PFAS-related lawsuits.   

These tools can also prepare chemical industry supply chains from other disruptions. For example, French labor strikes may have ended, but the chemical industry faces new risk from increasing regulation and liability. In particular, lawsuits and settlement amounts are rising related to use of per- and polyfluorinated alkyl substances (PFAS), otherwise known as “forever chemicals.” As the number of lawsuits and settlements rise, companies must evaluate their own risk and the risk of violations in their sub tiers.  

Building a resilient supply chain 

In conclusion, the French pension reform protests offer a powerful case study on the critical importance of multi-tier visibility in managing chemical supply chain disruptions. Despite the return to regular operations, the chemical industry must take stock of these events and invest in capabilities that strengthen visibility, resilience, and responsiveness to future disruptions.