The global supply chain has taken many blows over the last three years. Today, it faces yet another strain – a drought on the Mississippi River. A major US transportation hub, the Mississippi is the second longest river in the United States, covering more than 2,300 miles. In addition, its tributaries run through 32 states and two Canadian provinces. It also houses major ports that account for more than 500 million tons of shipped goods per year.
This year, a severely hot summer and a flash drought have caused water levels to fall to record lows. The water recession and narrowing of the river have created a backup of barges, severely slowing the supply chain for agricultural and petroleum products, as well as other materials and consumer goods. The Tennessee Valley Authority (TVA) estimates that 9% of the goods transported on the Mississippi are chemicals (1).
Typical barges can carry volumes upwards of 1,500 tons, equivalent to approximately 60 semi-truck loads. This transportation system saves more than $7 billion annually versus other methods (2). In comparison, barges use less fuel, create less pollution, and is considered one of the safest modes of transportation.
In October, thousands of barges were stalled along choke points where the river had severely narrowed, or the levels had caused ships to run aground. This has caused severe delays, leaving materials vital to industry and manufacturing sitting stagnant on the Mississippi. The US Army Corps of Engineers is actively dredging the river to keep barges moving and is expected to continue through January.
The drought on the Mississippi River has caused shipping prices to skyrocket in recent weeks, though water transport still remains the more cost-effective shipping method. That said, the severe delays are further pinching the already stressed supply chain, the effects of which will soon trickle down to consumers. It is already estimated to have created more than $20 billion in economic losses (3), including millions in the chemical industry.
Experts anticipate that it will take months before the Mississippi River reaches more tenable levels. Chemical manufacturers and distributors, as well as end-user manufacturers, will need to keep a close eye on the situation, potentially making costly adjustments to freight and production plans.