Ann Boucher, the European portfolio director of Cutting Edge Selections, an Ohio-based distributor, is quoted by Beverage Industry Enthusiast as saying supply chain issues will improve as more truckers are hired.
It’s a nice thought, but don’t count on it. Before the pandemic, the U.S. was already short some 60,000 truck drivers, according to the American Trucking Associations, which also predicts the shortage will grow to 100,000 in coming years, partially due to pandemic-timed early retirements.
The government’s response? Well, it’s thinking about lowering the minimum commercial driver licensing age to 18 from 21 for over-the-road truckers and easing DMV processes. Changes in licensing processes won’t make up for a lack of drivers. Here’s a startling statistic: In last year’s fourth quarter the turnover rate for large truckload fleets was unchanged at a 92% annualized rate. The churn rate for smaller truckload carriers dipped two percentage points to 72%.
One reason: Interstate trucking plays havoc with family life. Another: OTR truckers spend an hour a day searching for a safe place to park their trucks. And another: Getting goods in and out of ports is a mess.
The problem is that our entire supply chain infrastructure was built 50 years ago by our grandparents. There are two possible solutions to the current supply chain mess: One is to dramatically expand ports and other infrastructure to accommodate imports from China and elsewhere. The other is to recognize that U.S. businesses can’t compete with producers in another country that pay 90% less to its workers than a similar U.S. producer. The solution to that is to use tariffs to adjust the labor component of goods. Our opinion.