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Incentives for Diversifying Supply Chains

Supply chain challenges are making it difficult for farmers to get their commodities to domestic and international customers. Mike Steenhoek, executive director of the Soy Transportation Coalition, says it’s always a good day to diversify your supply chains.

“One of the cardinal rules in supply chains is don’t put all your eggs in one basket. And when you as an industry, when you as a company, have a variety of supply chain options, you stand to benefit, and you’re going to be more competitive. It’s always a good day to try to diversify your supply chain. It’s particularly a good day to do so when we’ve gotten a number of these significant challenges. Whether it’s the state of our inland waterway system with low water levels on the Mississippi River, whether it is uncertainty and unreliability within the rail sector and, obviously, the potential threat of a strike certainly is concerning to a lot of people in agriculture.”

Drought continues to make shipping along many of the major U.S. waterways a big challenge. The Great Lakes and St. Lawrence Seaway is an alternative for some commodity-producing states to ship their goods overseas.

“A number of key soybean and agricultural producing states that are adjacent to the Great Lakes and St. Lawrence Seaway, so you’ve got this pretty significant maritime option to the north that can be able to provide connectivity with some of our customers in other countries. It’s not going to be the solution for everyone. There are certain areas of the country where you’re too far removed from the Great Lakes and St. Lawrence Seaway, but it is an option that should be more widely considered.”

Shippers wanting to move commodities through the Great Lakes and St. Lawrence Seaway for the first time can save some money by doing so.

“To further encourage that, the Soy Transportation Coalition and the St. Lawrence Seaway Management Corporation are continuing a partnership that we have in which we offer what’s called the gateway incentive agreement, and that is available to agricultural shippers within the United States. If you want to devote new freight to the Great Lakes-St. Lawrence Seaway System, you will be eligible for a 50 percent reduction in tolls that get paid when you navigate with the seaway and their inventory of locks.”

For more information on shipping and saving money on tolls, contact Steenhoek at the Soy Transportation Coalition for more information.

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