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Economy & Business

Cement Shortage Delaying Construction Projects in Wisconsin

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Competition for rail cars is one factor driving the cement shortage in Wisconsin.

Kevin McMullen has been in the cement trade for 20 years. He says this is worst supply problem he’s ever seen.

“What we have is a cement transportation issue. In other words, we can’t get the cement to Wisconsin fast enough,” McMullen says.

McMullen is president of the Wisconsin Concrete Pavement Association. He says the problem began developing in spring. It was wet, and that delayed the start of the construction season in Wisconsin. So the companies here that make concrete by mixing gravel, sand, water and cement, did not need cement. When it began stockpiling at a couple of major out-of-state suppliers, they shut down production.

“Because if they continued to produce more cement, they had nowhere to go with it. So they actually took the plants down, stopped shipping because they had nowhere to go, then all of a sudden the demand hit and they couldn’t move the cement fast enough,” McMullen says.

Transportation remains the problem today.

McMullen says when it comes to shipping cement from Michigan manufacturers to terminals in eastern Wisconsin – including Milwaukee – there’s a limit to how much ships can carry. On the western front, where barges deliver cement from Minnesota, the boats are getting clogged in dredging projects on the Mississippi River.

A supplier in Indiana that uses rail to transport cement to Wisconsin, finds those cars at a premium.

“The oil industry is gobbling up rail cars as fast as they can go to haul frac sand, to haul oil to the refineries. And in the fall of the year you complicate that even further with the hauling of grain and basically they’re just having a problem getting rail cars,” he says.

If you wonder whether all the freeway projects may be partly responsible, McMullen says the amount of road construction underway in Wisconsin is not a factor driving the cement shortage.

“The DOT is actually down in quantities this year and has been for the last few years. We’re not building…as much as it surprises everybody, we’re not building as many highways in Wisconsin as we did five and 10 years ago,” McMullen says.

Though, McMullen says cement suppliers may now be giving priority to road construction projects facing deadlines, and pushing back smaller-scale projects, such as those that keep Nicholas Rivecca in business.

Rivecca owns Nuvo Construction in Milwaukee. It sells concrete for residential and commercial projects, such as driveways and sidewalks.

“We’re running short, on a per-daily basis, to supply everybody,” Rivecca says.

Rivecca says suppliers are allocating cement to companies like his, on a daily basis, but it’s not enough to keep projects on schedule.

“People are very frustrated. They want to get concrete to finish up their projects or to get projects started and they’re not able to do it. Fortunately, everyone’s really understanding this isn’t an issue with the concrete producers, it’s a product that we use that we can’t get,” Rivecca says.

Rivecca says he’s frustrated, too, because the shortage is taking a big bite out of his profits.

He says the only resolution in sight is the impending cold weather. Road construction will wrap up for the season in a few weeks, then hopefully suppliers will pass on more cement to firms with unfinished projects.

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