The United States of America is facing the highest inflation since 1981. Add to that the worst relations with Russia in history and you get an economic blow that America may hardly survive according to economic experts.
A ban on the export of fertilizers from Russia has been in force since the beginning of the last year. This was followed by the suspension of trade due to the start of the war in Ukraine, which began on February 24, 2022.
This has caused severe shortages around the world.
Those shortages in agriculture threaten to collapse the transportation sector of the United States of America, which is already in serious trouble due to high fuel prices.
How did problems arise in the transport sector?
One specific type of fertilizer, “Urea”, has a particular application in the automotive industry. DEF accuracy (Diesel Exhaust Fluid) is mixed inside the engine with fuel to reduce the emission of exhaust gases and since 2010 is a mandatory component in every diesel engine, 67 percent is made from Urea, and the remaining 33 percent is made from distilled water.
Without this liquid, diesel engines cannot start, so all trucks, tractors, buses, pickups and other vehicles that agriculture and the transport of goods, food, and people rely on are at risk in addition to personal vehicles.
Ashley Poole, the owner of a truck repair service, points out that new models of vehicles are under attack.
“Any truck or other diesel-powered vehicle with an engine level 4 or higher must add this fluid. Older engines can start without this fluid,” he says.
According to data reported by the High Plains Journal, in 2019 Russia was the number one exporter of urea by exporting about 6.98 million tons, followed by China, which also limited the amount it exports. . On the other hand, the United States of America spent 1.2 billion dollars on importing urea in 2020 and thus rose to third place, right behind India, which produces most of its consumption of this fertilizer itself.
The market for this fertilizer was in trouble even before the outbreak of war due to congestion in the supply chains and restrictions on exports from China and Russia, but as the fertilizer is made from natural gas, transportation problems started with the outbreak of the conflict in Ukraine and only further complicated the already very difficult situation.
Problem with DEF deliveries
The Union Pacific Railroad company in the United States holds a monopoly over the distribution of the fertilizer from which this liquid is made, and they have exclusive access to those factories. Union Pasifik is currently struggling with a shortage of employees and there are fewer deliveries of this now-problematic liquid. “Pilot Flyin’ J,” the largest network of pumps and rest stops for truckers in the US, gets as much as 70 percent of this fluid from Union.
Pilot Flying J CEO Shamek Konar recently testified before the US Surface Board Transportation Board regarding DEF shortages and the implications this could have on US supply chains.
“Currently, we cover 20 percent of the country’s diesel supply and about 30 percent of the DEF supply. Pilot is facing the threat of serious cuts in its service. These cuts are being imposed on us by the Union Pacific Railroad. They informed us on April 13th that we have to cut back deliveries by 26 percent, and in subsequent talks we were asked to reduce it by another 50 percent or face an embargo,” Konar said.
“My bill is $1,200 for fuel”
American truck drivers are widely complaining that they are feeling the effects of this shortage.
“We used to spend $500 a week on gas, and now my gas bill is $1,200,” says Larry Miles, adding that the DEF shortage is driving up costs because he has to fill it every other fill-up, “Newsweek” reports.
