The closure of a bridge in Memphis is wreaking havoc on businesses.
A cracked beam discovered during a routine inspection of the Hernando de Soto Bridge on Tuesday has shut it down indefinitely. The bridge, which spans the Mississippi River and connects Arkansas with Tennessee, will remain closed until a full inspection can be performed. That might take several weeks, according to NPR, and the repairs could keep the bridge closed even longer. Vessels are also temporarily prohibited from traveling beneath the bridge.
Shipping and logistics companies throughout the country are already experiencing problems. “If you’re going from the Southeast to the Southwest or vice versa, you’re going through Memphis,” says Chris Wang, founder and CEO of Chattanooga-based Taimen Transport, which claimed the No. 1,683 spot on the 2020 Inc. 5000 list. The transportation management software company works with more than 15,000 carriers and is already seeing the closure affect its clients’ shipments, including a Memphis-based beverage company that’s one of the largest in the U.S. “It’s causing huge delays,” Wang says. “It’s a major inconvenience.”
About 11,000 commercial trucks travel over the de Soto Bridge per day, according to Wang. A second bridge a few miles south serves an alternate route, but it’s only two lanes wide in each direction and not equipped to handle the excess traffic. Congestion in the area is causing delays of up to three hours.
Those slowdowns could affect time-sensitive shipments, including vaccines, which need to be delivered in a timely fashion due to refrigeration issues. Wang says Taimen Transport was responsible for moving a huge shipment of vaccines that arrived in Memphis in December. “They were pulled off a plane and put on an expedited truck that had to deliver them to the Midwest within 12 hours,” he says. That would have been impossible with the current delays.
The consequences of the delays are wide-ranging. Truckers generally get paid by the trip, not per hour, so drivers will have little incentive to accept trips that terminate in or pass through Memphis, Wang says. Shippers will likely have to compensate by paying drivers more for those routes.
Trucking rates are already at all-time highs as the economy rebounds from the Covid-19 pandemic. The cost of the Chicago to Memphis route, for example, is up 121 percent year over year.
“That’s pretty drastic, and it’s only going to get worse,” says Wang. “Delays cost money.”
A major logistics hub, thanks in part to its access to the Mississippi River and proximity to cities throughout the South and Midwest, Memphis is home to the global headquarters of FedEx. Many shipping routes include stops in the western Tennessee city.
“It’s a regional hub that a lot of freight travels through,” says David Spencer, director of business intelligence at Austin-based Arrive Logistics, which was No. 589 on the 2020 Inc. 5000 and handles freight logistics for more than 6,000 clients.
Department of Transportation regulations limit truckers to 11 hours of driving per day, which generally allows them to make one-day trips of about 450 to 500 miles, according to Spencer. Adding several hours to certain routes, like the 453-mile journey from Dallas to Memphis, will push them to two days. That can mean storage and refrigeration fees, as well as a shortage of trucks.
“It disrupts both directions,” says Spencer. “This could push the current all-time truck costs even higher.”
Halting water-based travel along the Mississippi River, one of the country’s major shipping arteries, is also causing business disruptions. Aaron Keck, head of sales at Chattanooga-based Lync Logistics, No. 786 on the 2020 Inc. 5000, says this is resulting in shipments being undelivered and causing supply chain disruptions. “It’s starting to look like the Suez Canal, part two,” says Keck, referring to the March blockage of that waterway by a 400-meter container ship.
Fifty percent of the country’s agricultural water-based exports depart from the Port of New Orleans, according to Spencer. Midwestern crops like soy and corn that get shipped overseas are currently unable to reach the southern end of the Mississippi River. Shippers might have to resort to rail transportation, which is far less cost-effective, resulting in a price increase for consumers. Plus, the Port of New Orleans isn’t equipped to handle the influx of cargo that would arrive if many shippers decide to pivot to railway travel, so delays would be further exacerbated.
“Should the bridge remain closed for an extended period of time,” says Spencer, “the ripple effect could be massive.”