As green shoots of recovery start to sprout in the US economy in the wake of the COVID-19 pandemic, supply chain disturbances across the country are resulting in price increases and goods shortages. The problem is not exclusive to the United States. Indeed, all over the world today, record deficiencies are occurring, triggering disruptions in the supply of goods that people have taken for granted for decades, from household products to electronics and cars.
COVID-19 took a heavy toll on many industries, with current worker shortages dragging things down. By the end of September 2021, more than 70 container ships were waiting at ports at Long Beach and Los Angeles, unable to unload their goods due to labor shortages. One survey by the US Chamber of Commerce revealed that 90 percent of local business leaders agreed that labor shortages were stifling economic growth in their regions.
As the world restarts in a post-pandemic world, logistics managers are fighting an uphill battle, struggling to keep up with the surge in buyer demand, while simultaneously trying to recruit enough drivers to deliver goods to consumers’ front doors. The pandemic threw the global logistics industry into a tailspin, triggering scarcities in a number of products, from PPE and vaccine vials to bicycles and semiconductors.
The New Normal
RoxAnne Thomas is Gerber Plumbing Fixtures LLC’s US Transportation Manager. Typically, she arranges the import of tens of thousands of 20-foot containers of bathroom equipment into America each year. Based in Woodridge, Illinois, Thomas has been struggling to manage the chaos in the global transport industry in 2021, her phone constantly chiming as toilets, faucets, and sink shipments repeatedly become stuck at various ports across the world.
As society becomes increasingly globalized, with production occurring on one side of the planet, and purchases taking place on the other, systems underpinning the global logistics industry have been pushed to the brink of collapse. Supply uncertainties and inflationary forces appear to be here to stay, with the critical factor of a company’s future being its ability to adapt. RoxAnne Thomas explains that it will take at least a year to a year and a half for things to return to normal for her company, with backlogs still occurring at every step of the process.
Tony Costa is Bumble Bee Seafood’s Chief Information Officer. He says that, for his company, the pandemic has been a double-edged sword, with huge surge in sales in 2020 as 6 million new customers tried Bumble Bee products for the first time. This was followed in quick succession by a spike in the delta variant in many countries where the company sources its products, disrupting supply chains and impacting Bumble Bee’s ability to keep pace with demand.
Trucking Is a Particular Concern
In order to solve logistics issues within the United States, the transport sector has increasingly been looking outside of the country, seeking to recruit more drivers from abroad to plug gaps in US transport infrastructure. During the pandemic, domestic supply worries were front and center, with trucking emerging as a particularly vulnerable component in global supply chains, creating bottlenecks that boost inflation and threaten economic growth.
A flood of US truckers left the industry during the pandemic. Many truckers took early retirement, while temporary closures of truck driver training schools and motor vehicle departments disrupted the normal influx of new recruits to the sector. When the pandemic began, the US transport industry was already short by almost 61,000 drivers, according to statistics from the American Trucking Associations. If this shortfall continues unabated, the deficit of US truckers is predicted to hit 160,000 drivers by 2028.
Recruitment and Retention Are Both Issues
In April 2021, the American Trucking Associations joined with more than 100 other trade groups writing to Congress. In the letter, they warned that the pandemic had exacerbated existing driver shortages. Temporary closures of truck driver training schools are placing pressure on an already brittle pipeline of new recruits entering the industry. However, some argue that root cause of the problem does not lie in a shortage of new recruits, citing driver retention as the underlying cause.
According to statistics from the US Department of Transport, turnover rates for large long-haul carriers have reached an astounding 90 percent, with industry experts warning of a mass exodus of truckers leaving companies, or the trucking industry altogether. Transportation Secretary Pete Buttigieg acknowledges that the US economy is showing signs of recovery. Nevertheless, he points out that the pandemic uncovered and aggravated existing problems within supply chains, including staff retention.
Addressing the Issue of Supply Chain Disruptions
Experts predict that the fixing problem will not be easy or quick, with a lack of labor disrupting globally interconnected supply chains. The truck driver shortage has compounded the problem, but other industries are also experiencing massive labor shortfalls, with container ships moored for months off the coast of California simply because there are insufficient longshoremen to unload them.
Labor shortages are impacting companies of all sizes, stifling economic growth. Moving forward, companies are increasingly looking to advanced technologies like machine learning, AI, and even autonomous trucking for solutions to current disruptions, meaning that the pandemic could ultimately have a revolutionary impact on supply chains, permanently changing the way that they function.