President Joe Biden has announced several initiatives and partnerships to reduce the country’s supply chain crisis. However, the moves will do little to fix the massive congestion problems unless there are more truck drivers to move goods.
The Biden administration recently announced that the Port of Los Angeles, mired in delays and backlogs, will begin operating on a 24/7 basis to move products more efficiently from overseas into the country. Additionally, several companies such as FedEx and UPS also announced they would scale up operations as the holiday season approaches.
The White House announced that it would allocate billions of dollars in funding toward modernizing and upgrading facilities at crucial ports across the country, moves that it hopes will ease its supply chain woes.
While port improvements might help in the long run, and expanding the hours that ports are open could benefit the supply chain ecosystem, critical elements of how the supply chain works are still suffering.
Mark Ford, CEO for BlueGrace Logistics, told the Washington Examiner that while ports being opened around the clock is conceptually something that would help ease supply chain issues, other factors are at play.
“When you start talking about ports being open 24/7, in theory, what you are assuming is that you actually also have people to work those shifts and have carriers that can pick up during times when, necessarily, that’s not the most desirable time for them to pick up,” he said.
“So, if a driver starts their day early in the morning, which they usually do, most of their drivers are going to exhaust their working hours before that second, third shift actually occurs,” Ford noted.
He said that even with ports operating all day and all night, truck drivers, warehouse workers, and other links in the supply chain need to be fully staffed throughout the night for the change to have a material effect on improving the flow of goods from ports to consumers.
David Sacco, a practitioner in residence at the University of New Haven finance department, said that the administration and the public’s focus on the port aspect of the supply largely stems from its visibility. While trucker shortages might be problematic for people to visualize, dozens of ships moored idly outside the Port of LA and the Port of Long Beach is more visceral.
“It’s taken on a lot of the import because people see the freighters sitting out there in the LA harbor,” he said, “so that becomes a visual that people can relate to.”
Sacco told the Washington Examiner that despite the imagery, “We’re talking about the supply chain, so in order for this thing to function properly, every link in that chain needs to have its capacity increased … they could increase the speed at which they’re unloading ships, but if they don’t increase the number of truck drivers or trucking capacity, then all of those containers are just going to sit on the dock and not be able to get shipped to places.”
The American Trucking Associations has consistently sounded the alarm that there is a truck driver shortage. Chris Spear, the president and CEO of the ATA, recently estimated that the industry is now down a record high of about 80,000 drivers amid the supply chain crunch.
The trucker shortage is not isolated to just the transportation industry but is being felt across the board.
Some 4.3 million workers quit their jobs in August, which is up from 4 million in July. The number of people quitting is the highest since the U.S. began keeping records of the statistic about 20 years ago, equivalent to about 3% of the country’s workforce.
Because employers are struggling to hire workers at places such as warehouses and for trucking positions, wages have increased to lure employees into the industry. Stark increases in pay show just how big a problem a lack of truck drivers and other jobs tied to supply chain logistics is.
The International Foodservice Distributors Association recently released data from a compensation survey that it conducted based on confidential surveys from 117 distribution companies providing data for 555 locations across the country.
The survey found that the average driver salary over the summer increased by a whopping $9,000 annually from the same time in 2020. Additionally, warehouse workers earned an average of $50,000 in the summer of 2021, a considerable jump from an average of $42,500 in 2020.
A total of 83% of food service distributors reported experiencing significant or extreme difficulty hiring drivers. Half of those surveyed say the labor shortages have gotten worse over the past three months as the U.S. gears up for the busy holiday shopping and shipping season.
Congressional Republicans have used the supply chain issue as a cudgel against Biden, who they blame partly for the current situation. Rep. Kevin Brady, the ranking member of the Ways and Means Committee, told the Washington Examiner that the administration should have done more before its most recent actions addressing the snarls.
“It’s too little, too late,” Brady said during an interview. “The Biden administration has ignored the supply chain for almost all of their time in office. These are changes that make a very small difference in the overall picture of the supply chain crisis.”
Another factor that some economists theorize will exacerbate the supply chain crisis is Biden’s pending vaccine mandate. Under the edict, companies with more than 100 employees will be required to have their workers vaccinated or provide proof of weekly negative COVID-19 tests. The U.S. Court of Appeals for the 5th Circuit recently issued a stay, although the White House has encouraged businesses to proceed with the mandate.
“Even though portions of it are delayed … in truth, it’s going to make the supply chain problems worse,” Brady said of the executive order.
Several business groups, including the ATA, signed an open letter to Biden warning about its effect.
“We estimate companies covered by the mandate could lose 37% of drivers at a time when the nation is already short 80,000 truck drivers,” the letter reads. “We ask for flexibility for transportation and supply chain essential workers, particularly truck drivers who spend most of their time in their trucks and have minimal contact with colleagues and customers.”
One solution to trucking shortages is attracting younger drivers. Currently, 18- to 20-year-olds who have commercial driver’s licenses can only drive within their state and not cross state lines. However, some in Congress are pushing for a pilot program to allow younger drivers, with training, to take part in interstate trucking.
Brady said that he supports lowering the age to attract more young people into the trucking industry. He noted that some people graduating high school are looking to go into trades rather than college, and he thinks the industry might be attractive to some of those new graduates seeking a career.
