The supply chain can stretch and break due to infrastructure collapse
By Jennifer Whitlock
An I-40 bridge connecting Arkansas and Tennessee remains closed indefinitely after transportation officials discovered a fractured support beam in early May, causing shipping delays and exposing tensions in the U.S. agricultural supply chain.
The Hernando De Soto “M” Bridge, which crosses the Mississippi River, has been open to traffic since 1973. It carries about 60,000 vehicles each day, according to the Tennessee Department of Transportation.
Both the bridge and the river are important traffic routes for food and agriculture.
“The Mississippi River is extremely important to America’s export commodity supply chains,” said Andrew McKenzie, agricultural economist at the University of Arkansas. “When barge freight rates increase due to various supply and demand issues, those higher costs are absorbed into price offers to farmers. “
In 2018, McKenzie co-authored an article on barge freight contracts exploring the link between barge futures prices and grain transported along the Mississippi River.
When the problem with the bridge’s support structure was first discovered, the US Coast Guard closed the river to barge traffic passing under the bridge. There were 62 ships and 1,058 barges in line at the time. In an interview with Farm progress, McKenzie said grain travels down the Mississippi River to New Orleans for export, and inputs like fertilizer travel inland along the same route.
Had river traffic remained closed for a longer period, he said there could have been a drop in prices in markets north of the bridge’s closure due to oversupply. Markets south of the bridge may have seen price increases due to lower supply.
But road traffic is still feeling the effects of the closure and likely will be for some time.
The Arkansas Trucking Association has estimated that closing the bridge costs the trucking industry $ 2.4 million every day as traffic is routed to other routes.
“Using the GPS data, we can tell that a previous 8-minute trip now takes an average of 84 minutes. This additional transit time of $ 1.20 per minute for 26,500 trucks costs the trucking industry more than $ 2.4 million each day the bridge is closed, ”said Shannon Newton, President of Arkansas Trucking Association. “Freight is like water. It will continue to flow. Our industry will continue to make deliveries. But if the extra expense continues, it is likely to be passed on to consumers.
Longer transit times and surcharges are expected to persist until repairs are made and normal traffic on the bridge can resume.
It’s a lesson in how our supply chain is interconnected with our infrastructure, according to Soy Transportation Coalition executive director Mike Steenhoek.
“People are often surprised by this, but it doesn’t take much for a problem in one part of our supply chain network to manifest to you individually,” he said. “You may have a problem there, and all of a sudden, it’s your problem here.”
He hopes that the closure of the bridge will bring renewed attention at local, state and national levels to the problem of aging infrastructure and lead to investments to correct the problem.
“The ripple effect can be very pronounced. So even though we focus on the impact of this major bridge, we cannot forget the rural roads and bridges that a farmer has to cross to move his produce from the field, ”Steenhoek said. “It’s the connection that makes all subsequent movements happen.”