It seems every month since March 2020, we’ve heard about supply-chain disruptions and seen them firsthand in our grocery stores and online availability of goods. Now, some Regional Transportation Authority projects are facing similar supply and demand challenges.
A number of products used to construct roadways and the elements around them (lighting, sidewalks, bridges, etc.) face material shortages or steep cost increases for a variety of reasons.
Here are a few of the factors contributing to either delays or rising costs in road construction in the Pima County region:
Concrete: Concrete delivery has been delayed due to regional shortages caused by maintenance on a cement manufacturing facility in California. As a result, all construction companies are limited in how much concrete they can purchase per week. In our region, the Downtown Links project earlier this year was limited to 150 cubic yards per week, for example, even as crews worked to construct concrete bridges and other roadway facilities, such as sidewalks and curbs.
Pig iron: The Russia-Ukraine war is contributing to a shortage of pig iron, a type of crude iron used to produce steel, wrought iron, ductile iron pipe and cast iron. This shortage has had a ripple effect, as users have shifted to alternatives (particularly for pipe), causing other shortages. As the construction materials markets shift in response, the cost of structural steel and reinforcing steel used on buildings, bridges and culverts has soared. The cost of utility work has also been driven up, as fittings, valves, manhole lids, fire hydrants, utility poles and traffic signals are directly impacted by the increased cost of metals; even the cost of plastic pipe used in irrigation, sewer and water lines is up as utilities look for alternatives to ductile iron pipe.
Oil: Oil prices affect all goods because items must be transported throughout the country for consumers, construction projects and more. Moving freight gets more expensive with rising fuel prices, in addition to any increased expense or reduced availability of the items in the freight trucks, boats and trains. Construction equipment also operates using diesel as the main source of energy, again affecting the cost of material processing, asphalt production, excavation and grading work. Oil cost increases also directly drive up the cost of paints, polymers and plastics used on RTA projects.
Asphalt: Prices are rising on liquid asphalt, which when combined with aggregates (rock and sand) is our main paving material. In Arizona, according to Asphalt Oil Market, the price has gone up 15% since February and was on the rise throughout all of 2021, as well. Liquid asphalt is an end product in the oil refining process and is typically cheaper than gasoline and diesel fuel. If fuel prices remain high, refinery owners may invest in additional plant processes to break down asphalt into more valuable products, making liquid asphalt and pavement much more expensive.
Labor: One industry heavily impacted throughout the pandemic has been truck drivers. Shortages of commercial truck drivers, school and city bus drivers, and other driving professionals affect movement of any materials needed for road projects, from moving pipes across the country, to moving concrete across town.
Altogether, the factors lead RTA officials to speculate that projects going to bid later this year and beyond may see increasing costs and longer timelines to account for uncertainties in the market of products needed to complete the construction.