The coronavirus pandemic has dealt a tough blow to the asphalt industry as state and local authorities, facing major funding constraints, delayed or cancelled more than US$8.5 billion road, transit and airport projects.
These findings came from a July report from the American Road and Transportation Builders Association, which also reported that 10 states and local areas vetoed, cancelled or postponed transportation funding-related legislative initiatives and ballot measures. This included several major initiatives in California.
The Wyoming Department of Transportation, for example, delayed 11 construction projects and announced plans to review local transportation programs, with the delays allowing the state to reallocate $436 million over the next six years toward asset maintenance projects. And in North Dakota, projects under “Operation Prairie Dog”, an initiative to put up to $250 million from oil and gas tax revenue toward infrastructure projects in the state, were also delayed.
Despite this, the cutbacks don’t seem to have trickled down to asphalt plants and suppliers yet, says Mark McGaughey, MINDS Inc.’s director of U.S. operations. To the contrary, with construction deemed an essential industry in the vast majority of the U.S., he says asphalt plants have been operating nonstop to accommodate construction projects that were underway during the pandemic.
“The timeline in the asphalt industry is a little different, because funding for road, transportation and infrastructure projects has to be approved so far in advance. Those monies are already allocated to upcoming multi-year projects, and for a lot of major municipalities the projects that were out there pre-COVID are still baked in,” he says.
Similarly, McGaughey says asphalt plant owners still seem to be planning for the future with upgrades to their operations. “There’s a lot of interest in plant control system upgrades, a lot of interest in equipment management software upgrades. Plant operators are looking at increased capacity, more silos, more plants,” he says. “In our industry, we don’t usually have immediate changes to external forces — most contractors MINDS deals with are tied to state budget funding for their business and for the most part, with the size of these projects, states don’t just turn off the tap. You just can’t do it. That’s why we’ve really not seen a pause in employment during COVID.”
With a shift to remote work for office-workers, it’s an especially ideal time for upgrades to plant software that give plant managers the ability to visualize what’s happening in real-time at all their operations through an accessible online portal, like MINDS’ powerful PlantManager dashboard, which pulls data from plant management systems like DrumTronic and BatchTronic, and MINDS’ Tessera software for ticketing.
If the industry experiences a downturn, McGaughey expects it will be in the next three years, as the project drought caused by 2020 cancellations and delays becomes apparent — though he notes the upcoming November election could impact future infrastructure spending in the U.S. But for asphalt plant operators who may be thinking about battening down the hatches, he says there’s still value in planning asphalt systems upgrades in a slow period.
Investing in plant automation solutions, better plant control systems and equipment management software will pay dividends when plant managers need to run ultra-lean operations, by allowing them to immediately identify and fix any issues and ensure their plant is always meeting asphalt quality control objectives.
“For contractors and managers, the ability to see information on their plants from anywhere and all at the same time — looking at what’s being mixed right now, what products are in your tanks, what’s in your silos, how much your trucks are loading and more — is a game-changer for plant efficiency,” McGaughey says. “Making asphalt plant software upgrades now will help them thrive in lean times and outperform in boom times.”