Source: adapted from B. Prentice (2004) “Bottlenecks and Opportunities in the Grain Supply Chain”, Proceedings of the 9th Annual Agribusiness Logistics Conference, Winnipeg.

Types of Bottlenecks

There are three major types of bottlenecks:

• Infrastructure. Physical restrictions can form bottlenecks as traffic expands, such as a bridge. Under investment in infrastructure can produce chronic bottlenecks when rapid economic growth takes place, implying that the capacity is insufficient to keep up with the demand. Temporary transportation bottlenecks can be caused by natural or market forces. Weather disruptions, such as a storm, are among the most prominent, as well as construction and accidents. These events are expected, but cannot be predicted. A surge in demand can also create a bottleneck as infrastructures are designed to convey a constant level of service. Dis-investment, often through the lack of maintenance, can cause temporary bottlenecks.
• Regulations. Regulations that delay goods movements for security or safety inspections create bottlenecks as a direct consequence. Even if the intention is not to convey delays, regulations inevitably cause delays and disruptions. Three sources of bottlenecks created by the indirect effects of regulation are cabotage restrictions, competition policies and fiscal policies. Cabotage restrictions prevent foreign carriers for carrying freight within a country; their capacity is thus not available. Competition policies can create bottlenecks either by supporting a monopoly where the operator engages in rent seeking strategies or by complete deregulation where many carriers will compete of the similar transport segments. Fiscal policies can deter investments through taxation and create bottlenecks.
• Supply chain bottlenecks. Relate to specific tasks and procedures in supply chain management that trigger bottlenecks. For instance labor availability, such as work shifts, may impose time dependent capacity shortages. Some firms may create bottlenecks on purpose as a rent seeking strategy since they control key elements of the supply chain. Technology can also be an issue as different information exchange protocols can create delays in information processing and therefore delays in shipments (or transshipments).

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