ON OCTOBER 13, 2021, President Joe Biden brought together power brokers from ports, unions, and big business from across the nation to address shipping, labor, and warehousing problems in the U.S. supply chain. He then announced new around-the-clock – 24/7 – port operations in Los Angeles.
Biden brought representatives of the business sector to develop ways and means to deal with the supply chain problems. “A solution is in sight,” Biden said. If retailers would move more goods at night, that would be a “big first step,” he said. “[And] we need the rest of the private sector chain to step up as well.” However, as one economist had commented, “What the president’s doing isn’t going to really hurt. But at the end of the day, it doesn’t solve the problem either.”
Indeed, it’s not as simple as telling the players to line up and pass the bucket of water to put out the fire that has engulfed the supply chain that provides an endless traffic of consumers — the biggest in the world – that buy more imported products than before the pandemic. It forces the retail chains to work full-time to handle the surge in imports and holiday gifts onto shelves in time for the holidays.
High import season
It is expected that imports from China would go up higher than the 30% so far this year over last year’s record. But delays in pick up have left some 250,000 containers of goods stacked up on the docks due to delays in transporting them – from lack of space in rail yards and warehouses — to their destinations. And that causes dozens of ships to back up at anchor outside the port. And then transporting them to their final destinations caused by a shortage of trucks and drivers would be a major problem.
With the unprecedented influx of cargo, it would be like Black Friday, Christmas, and Easter on the docks every single day of the year, with more ships coming in.
The biggest problem is the shortage of truck drivers. And the reasons behind the truck driver shortage are numerous. One of the most crucial factors that cause truck driver shortage is age. The average age is 49 for someone that drives 110,000 miles per year. That’s 500 miles per day! And driver pay has become the largest operational cost in the trucking industry.
Many trucking companies are highly selective when hiring truck drivers, which limit the qualification to driving history and driving experience. Quality is important in hiring practices. That is because of the fact that they have built their trucking company with professionalism and because of their high priorities, which have affected the number of truck drivers employed in the U.S. today; thus, has a dire consequence on the overall U.S. economy.
Truck driver turnover
One thing is worth mentioning. Truck driver turnover is happening at increased rates when truckers are in high demand. And since truckers know that, they are in a situation to change companies easily. It’s the basic law of supply and demand. And the problem is that truck drivers are hard to replace. Consequently, as truckers leave the workforce, there simply is no immediate pool of truckers to hire from.
There is a current shortage of 60,000 truck drivers in the U.S. This is further compounded by the rapidly increasing demand for truck drivers. In essence, while the trucking industry is constantly growing, there are no new truck drivers joining in. It won’t be long before the shortage nears 80,000 or even higher. And then what?
Another way is to hire owner operator truck drivers (OOTD). The current average annual pay for an OOTD is between $150,000 and $195,000 a year. However, it can go as high as $380,000 a year. Not bad at all. But the cost of insurance and maintenance could add a hefty sum to the cost of operating one’s own truck. As an OOTD, the truck driver has to purchase his own truck, which could cost anywhere from $50,000 to 80,000.
With an anticipated increase in the number of truck drivers, there are several ways to recruit them. One is to open the industry to women truck drivers, who until now are not welcome by the macho-mentality of union officials. However, there are few women who’d get into the industry; but it is getting better now with the high demand for truck drivers.
Dwindling workforce
With the dwindling workforce in other industries, it draws away potential truck drivers simply because of the grueling environment that truck drivers have to endure. So why not open immigration opportunities to foreign truck drivers? Europe being highly industrialized could provide experienced truck drivers.
With just a month away from the Black Friday pre-Christmas shopping spree, the problem of truck driver shortage may not be solved soon enough to stop the economic hemorrhaging of America, which could cause the republic to “bleed.”
It’s imperative that the truck driver shortage should – nay, must – be resolved now; otherwise, it could cause chaos that would lead to runaway inflation, which is now happening in earnest.
At the end of the day, President Biden is urged to use the power of his presidency and do whatever it takes to prevent the economy from collapsing. It’s not too late; however, he has to use extreme measures to stop the bleeding.