How Long Will Supply Chain Woes Last?

Merchants were poised for a blow-out holiday season this year. There’s just one glitch: Much of the merchandise they ordered is either stuck in ports or ships at sea because of snarls in land transportation – and experts don’t see the problem easing until well into 2022, if not 2023.

The Port of Long Beach in California already was running around the clock four days a week when President Biden ordered the Port of Los Angeles to begin running 24/7. The ports of Seattle and Tacoma also are gearing up for round-the-clock operations.

But that’s only part of the solution and may exacerbate the problem.

A shortage of truck drivers, congestion at rail yards, lack of warehouse capacity and an inability to get empty containers back to where they’re needed also are gumming up the works.

J.B. Hunt Transport Services Inc. expects the situation to get worse in coming weeks and continue into next year, The Wall Street Journal reported (Oct. 15).

The American Trucking Associations reported in July that the industry was down nearly 61,000 drivers by the end of 2018 and that number was expected to grow to an estimated 160,000 by 2028.

“[Trucking is] the mode of transport that bears the brunt of the price for inefficiencies in the supply chain – wait times, costly ‘clean trucks’ to comply with environmental regulations, regulatory limits on driver hours, etc.,” Lincoln Pei, account manager and ocean/port expert for Blume Global, told The Food Institute.

“If a driver picks up a laden container from the terminal at 2300 hours but is unable to immediately deliver to open warehouses, the 24/7 gate at the ocean terminal is meaningless. … And when drivers cannot deliver the container to the loading dock, they drop the container/chassis outside the warehouse. This then results in capacity issues for the chassis on which the laden containers sit by effectively reducing the capacity of the chassis fleet to facilitate the movement of the next import container from the terminal.”

The shortage of drivers is not surprising. Truckers have been complaining about working conditions and pay for years. Paul Mallory, founder of Consumer Gravity, noted drivers often work 70 to 80 hours a week – a pace that cannot be sustained in the long-term, resulting in burnout and other issues.

Drew Aversa of Aversa Strategies called on the federal government to step in to help increase the number of drivers by covering the cost of driver training, which can cost $10,000 and dissuades many from considering the occupation.

“The federal government can also work with the insurance industry to limit liability costs for new drivers, who may be excluded from driving for the major companies out there because they do not have time behind the wheel. Wanting a year of experience when there is a shortage of drivers is not realistic, so we must examine ways to remove barriers and limit liability to employers so they can open their talent pipeline to more people who are otherwise qualified and capable of doing this job,” Aversa said.

Chris Wolfe, CEO of logistics technology company PowerFleet, suggested using the National Guard and the Federal Emergency Management Agency to deal with the driver shortage.

“Think of all the veterans and current National Guard troops who have driven 18 wheelers and other large trucks for the past 20 years in Iraq and Afghanistan – let’s ask them for their assistance, pay them well and get them helping where they can,” he said.

“Cycles like this one are by, by definition, cyclical,” said Chris Pickett, chief strategy officer at Flock Freight. “What goes up must eventually go down, and vice versa. Assuming we don’t get another material wave in COVID-related global disruptions in the next few months, the ‘everything shortage’ likely resolves itself beginning in Q1

“But then we’ll need to be on the lookout for the ‘everything surplus’ as a result of the supply-side overshooting demand – as often happens in unregulated market-driven economies like ours. Then we’ll have an entirely new set of supply chain challenges to reconcile. Stay tuned.”