Supply and Demand of Industrial Gritting Salt

The recent snowstorms ambushing the United States and Britain have surpassed the winter weather we have become accustomed to in the past 30 years. This fact, coupled with the tough economic environment, with townships and government agencies cutting costs and slimming budgets, has caused a shortage of supply in gritting salt used to clear the roadways. The article in "The Economist" has highlighted the surge in demand for this commodity, causing prices to rise and salt mines to suddenly need an unexpected increase in their production. Gritting salts weight and expense to transport makes it a largely regional commodity. Only a region that is physically incapable of producing its own salt imports it ("The Price of Salt," 2010).

In Britain, the Salt Union is the primary supplier of rock salt. Despite the fact that their largest salt mine is able to produce 30,000 tons of salt per week, after the back to back blizzards and freezing temperatures affecting the region, the plant has been unable to meet demand despite the plant operating at full capacity. Additional transport issues involving the blockage of roadways surrounding the mine has led to a dire situation (Sturcke, 2010). The combined factors of the surge in demand and the inability for producers to meet that demand have resulted in the short run supply of rock salt being highly inelastic.

There are no widely used substitutes for gritting salt (there are a few such as magnesium chloride, used in the state of Oregon "Oregon Department of Transportation"2010), the safety and accessibility of the major roadways is a necessity, the percentage of a town or counties budget earmarked for salt is fairly small, and the price change is a temporary measure. These factors make gritting salts demand inelastic.

The snowstorms have also affected items which are viewed as complimentary products to gritting salt. The amount and condition of commercial snow plows governing authorities maintain has become a contentious point. In recent years towns have opted to forgo maintenance on snow plows or to reduce the amount they kept on hand to reduce what was deemed as unnecessary costs. The cost of labor has also greatly increased with towns having to spend a large percentage of their budget on overtime. The shortage has also affected the supply of salt for industrial use, the effect of which may carry over into the spring. The shortage has diverted salt meant for industrial use to deicing the roads and encouraged warmer climates to export their ice.

Townships and government agencies have reacted to the situation by enacting ordinances and rationing salt for roadways with the most traffic. For instance, they have been using sensors to measure road and air temperatures to determine the best timing to lay the salt. They have also been employing GPS to forecast ice and respond accordingly. Main roads used for public transport and roads around hospitals, police stations, and emergency services are given top priority. Residential neighborhoods and schools are last in the triage process ("How exactly do you grit a road?" 2010). The Pennsylvania department of transportation openly admitted that their primary concern was to keep the roads passable and not to clear them of ice and snow. Residents were asked not to shovel their sidewalks as they were anticipating plowing the snow in the road onto sidewalks and to snow blow their driveways towards their home to reduce the work necessary of township snow removal. Residents were also asked to park in their driveways to clear the roads. (Gross & Stauffer, 2010). The long term result of surpassing budgets for snow removal will be scaling back on planned road improvements for the fiscal year and cutting funds elsewhere.

There is little that can be done to prevent an economic situation like this in the future. The demand for gritting salt is seasonal and the forecasted snow for an upcoming season can only be made with a small degree of certainty. The most that can be done is to err on the side of caution when undertaking the process of contracting gritting salt in the next fiscal year and to properly maintain equipment. Beyond this, aside from exploring alternative ways to maintain roadways, there is little action that can be taken.

Sources:
BBC News: How Exactly Do you Grit a Road?

The Economist: The Price of Salt

The Sentinel: WEATHER ALERT: Forecast calls for Another 12 inches in Carlisle Area

Oregon Department of Transportation: Tripcheck- Road Cams, Road & Weather Conditions in Oregon

The Guardian: Grit Supplies reaching critically low level as icy weather continues, says AA