How The Mississippi River Is Adversely Impacting The US Supply Chain
The Mississippi River is currently experiencing record-low water levels which are having an adverse effect on the US supply chain because the water is not high enough to support boats carrying shipments.
The Mississippi river is one of the main waterways in America for trade, and its incredibly low water levels at the moment are impeding the movement of commodities. With retail companies experiencing various other difficulties since the COVID-19 pandemic, adverse weather conditions are not ideal.
After the COVID-19 pandemic, American retailers sighed a sigh of relief that they could finally resume business after such a long time. Since then, they have had an array of issues, such as a volatile market, international supply chain issues, hyperinflation, and consumers’ changing shopping habits to contend with. It must feel like an impossibility to run a business in 2022. With the Mississippi River out of action, things are going from bad to worse.
The Mississippi river yesterday tied the all-time record of -10.70 feet. This water level will hinder the use of barges or other boats to move shipping loads to and from New Orleans and beyond. Already the shipments have been reduced by 20%, causing chaos in various business sectors.
A range of different cargoes uses the Mississippi, including coal, which over 5 million barrels shipped on the river alone. Also, many farmers use the Mississippi barges to move their produce, such as corn, soybeans, and wheat, as it is cheaper than other forms of transport.
Most people overlook the use of inland waterways as a viable option for transporting goods, but it is one of the most important ways our supplies reach the retail stores. The only downside to this is that the water level must be at a certain height for inland waterways to be valuable.
The reduction of water in the Mississippi river will be felt not only by the surrounding areas but by customers nationally and internationally, as shipments will at least be delayed or canceled.
As a lot of inventory is now halted due to the water levels, retailers are moving their stock into 53-foot trailers and short-term warehouses for safe storage. The high-priority SKUs are being loaded into large containers to move the products further inland to reach their final destination. This delay is causing problems as a lot of warehouses are already full due to congestion on the East Coast ports.
The congestion within the ports has been a long-term problem since the COVID-19 pandemic. With the volume of containers rising and building up, the price of the containers is also increasing. This increase is due to containers sitting in a port or warehouse rather than being repeatedly used. While pop-up yards are being used to store the boxes away from the docks to relieve the pressure within, it is not a long-term solution.
While the low levels of the Mississippi aren’t helping the congestion problem, neither is the reliability of the Transpacific line, which is notorious for not being on time.
Having a business that relies on selling products to turn a profit is stressful at the moment. With one problem after another, it is not surprising many small and multinational businesses are closing. With global warming changing our weather to a more extreme version, this may not be the last time adverse weather affects businesses.