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Concrete Supply Chain Issues in Tennessee

The past week saw another supply issue at one of the area's cement production mills with a breakdown that halted production briefly. That mill is back online for the coming week (April 18-22) providing some relief as compared to last week but supplies of portland cement remain tight across the state. Ready mix producers across the state remain on allocation from their various cement suppliers, with the amount of cement available to ready mix producers being less than the demand for concrete from contractors and customers. Rain in several areas across the state is providing some immediate relief on the demand side.

So far, the state of Tennessee is not seeing significant issues with the supplies of aggregate for the production of ready mixed concrete. Fly ash sourcing is often a problem at this time of year due primarily to the way that utilities operate their generating capacity during the transition period from winter to spring and we are seeing this play out in some Tennessee markets as we enter this week. The restricted availability of fly ash puts more demand on the available cement supply so this has a direct impact on ready mix producer's ability to meet the demand for concrete.

Most markets were already seeing lengthening scheduling periods for ready mixed concrete prior to the current cement allocations due mostly to the lack of available truck operators. This spring's issues with cement availability have partially mitigated the serious workforce shortages of available ready mix truck operators but this is likely to become more of a concern as we enter the prime demand season for the construction industry, even if we see some relief in terms of available portland cement supplies.

Recent announcements from Over-The-Road trucking firms (like Walmart and KLLM) regarding significant pay increases for new hires will put more pressure on both the supply of drivers available to all types of haulers and it will likely add additional pressure to already increasing wage rates for all types of trucking positions. As the construction season picks up, I expect that this issue will once again emerge as a significant constraint on the ability of ready mix producers to meet production demands for concrete and it will certainly impact all the other local haulers (dump trucks, dry bulk, construction supplies) that are critical to all types of construction.

TCA is continuing to monitor the ready mix supply issues across Tennessee and will be issuing regular reports as we head into the heart of the construction season.

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