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Logistics Intelligence Brief
Tuesday, October 26, 2021

Workforce

New Challenges, Familiar Issues Combine to Increase Driver Shortage, Costello Says

Transport Topics Joe Howard October 25, 2021

Also contributing, he noted, are about 70,000 drivers who are sitting on the sidelines and not completing re-entry protocols after failing drug tests .
“They are not even attempting to come back,” he said, adding that legalized marijuana in more states, “makes the problem larger.”
He also noted that motor carriers sometimes are faced with applicants who may have a CDL but present other problems.
“There is also a quality issue here,” Costello said. “They get applicants, it’s just that they cannot hire the vast majority of them. I still have reporters who say to me, ‘I talked to a person who has a CDL and cannot get a job.’ I say, ask them if they can pass a drug test. What’s their driving record? Those are also important points. So, there is a quality issue here, as well.
Costello noted that ATA is “100% supportive” of the Federal Motor Carrier Safety Administration’s Drug & Alcohol Clearinghouse database, which tracks driver drug test violations.
Related: Logistics Management Trucking industry needs to attract 1 million new drivers by 2030, ATA chief economist says

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Driver shortage reaches record high

DC Velocity Victoria Kickham October 25, 2021

The trucking industry is short 80,000 drivers, and if economic pressures and a host of other challenges persist, that number may rise to 160,000 by 2030, according to the American Trucking Associations (ATA), which released its 2021 Driver Shortage Update Monday.
Long-held trucking industry challenges such as lifestyle issues, driver pay, high turnover, and difficulty attracting younger workers and women have combined with pandemic-related challenges to drive up the number of needed drivers. This year’s figure is up from a high of 61,000 in 2018. Levels had fallen in 2019 and began to climb again in 2020, according to ATA Chief Economist Bob Costello.
“Since we last released an estimate of the shortage, there has been tremendous pressure on the driver pool,” Costello said in a statement. “Increased demand for freight, pandemic-related challenges from early retirements, closed driving schools and DMVs, and other pressures are really pushing up demand for drivers and, subsequently, the shortage.”

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Economist says trucking short 80,000 drivers

CCJ Jason Cannon October 25, 2021

"We have a demographics problem," Costello said. "We have a high average age [and] you have to be at least 21 years old to drive interstate freight, but most people don't wait around."
Costello said most new drivers enter the industry at around 35 years old, and for LTL and private fleets that number balloons to over 50 years old.
Fleets have also struggled to onboard women consistently. While females make up about 47% of the workforce, they make up less than 8% of truck drivers. Even fleets who have had success attracting women drivers, Costello said, barely crack 20%.

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Industry

What Everyone Gets Wrong About the Never-Ending COVID-19 Supply Chain Crisis

MIT Sloan Management Yossi Sheffi October 26, 2021

The ongoing global supply chain crisis caused by the COVID-19 pandemic shows no sign of abating. Widespread product shortages are focusing attention on supply chain issues as never before — and while this publicity has shed some light on the problem, it has also spawned (misguided) calls to end the practice of just-in-time inventory management.
Multiple factors have led to the current situation, but they spring from two overarching causes: suppliers’ inability to adjust to soaring demand, and government interventions. In order to develop solutions to pandemic-induced product shortages, we need a better understanding of how these issues have played out since early 2020 and resulted in a worldwide logistics logjam.

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Diesel Remains on the March, Rising 4.2¢ to $3.713 a Gallon

Transport Topics October 25, 2021

• Trucking’s main fuel has risen by 30.7 cents a gallon the past four weeks, though this week’s increase is less than half of that on Oct. 18 (8.5 cents).
• A gallon of diesel now costs $1.328 a gallon more than at this time in 2020.
• The last time a gallon of diesel cost at least as much as its current price was Oct. 6, 2014, when it was $3.733 a gallon.

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Spear: ‘It’s Time to Get Loud’

Truckinginfo.com Deborah Lockridge October 25, 2021

The American Trucking Associations has accomplished a lot in making its members' voices heard, but more is needed, said ATA President and CEO Chris Spear at the association’s Management Council and Exhibition in Nashville Oct. 25.
In his annual State of the Industry and Association Address, Spear praised the trucking industry’s performance during the pandemic and briefly attacked the Biden administration’s order to require businesses with more than 100 employees to either make sure employees are vaccinated against or tested weekly for COVID-19.
“The truth is, trucking has kept America safe,” he said. “Elected officials would be wise to keep that in mind. If the intent of the administration’s COVID vaccine mandate is to protect all Americans, why pick winners and losers? Stop weaponizing public health by dividing our workforce.”

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Trucking

U.S. Xpress CEO: Spot-contract rate gap will persist through 2022

Fleet Owner Geert De Lombarde October 25, 2021

The leaders of U.S. Xpress Enterprises Inc. expect they will build on 2021’s double-digit contract rate increase with more hikes next year—but they said their contract prices will stay well below spot rates for the majority of 2022 as the very tight market persists.

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Government/Safety/Sustainability

ATA’s Spear sees vaccine mandate as ‘weaponizing public health’

Freight Waves John Kingston October 25, 2021

Chris Spear’s address to the annual meeting of the American Trucking Associations was a walk through a whole range of issues affecting the industry, but a pressing one got called out early in his remarks: the looming federal vaccination mandate.
Speaking in Nashville, Tennessee, at the first in-person occurrence of the ATA Management Conference & Exhibition in two years, Spear, the organization’s president and CEO, reviewed the important role of the trucking industry in keeping supplies moving during the pandemic and the possibility that a vaccine mandate might impact the supply of drivers. “Elected officials would be wise to take that into consideration,” Spears said during the general session Monday.
“Stop weaponizing public health by dividing our workforce,” he said, adding that trucking is a “real-world industry” that helped bring the U.S. back from the pandemic.
“Divisible mandates” like a COVID-19 vaccination mandate “are the quickest means of unraveling those gains,” Spear said.
The proposed vaccine mandate has not been published yet. But the broad outlines are that it would impact companies with 100-plus employees and would be administered under the powers of the Occupational Safety and Health Administration.
Numerous trucking industry officials have expressed fears that the loss of drivers because of the mandate could be extensive and that drivers are made up to a large degree of people who — and this phrase is heard often — don’t like to be told what to do.

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EPA Chief Michael Regan Touts Collaborative Approach of SmartWay Program

Transport Topics Eugene Mulero October 25, 2021

“We’re seeing more emissions reduction because of the direction that the rules are taking,” Regan continued. “This industry reminds me a lot of our agriculture industry. You have so much innovation and creativity, and just thinking about attempting to develop regulations to try to solve all the problems — it just won’t work.”
He added, “When you can really harness the excitement, the innovation, the enthusiasm of an industry like the trucking industry, the sky’s the limit.”

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Shippers/3PLs

Amazon Touts Drivers, Warehouses as Salve to Supply-Chain Woes

Bloomberg Matt Day October 25, 2021

The company says it now has more than 800 delivery stations -- facilities typically located closer to shoppers than Amazon’s massive exurban fulfillment centers. Bloomberg reported last year that Amazon planned to build about 1,500 of these delivery hubs.
Amazon says it has started bringing inventory into its warehouses from additional ports, doubled its ability to process shipping containers and expanded its network of ocean freight carriers. Felton wrote that Amazon’s rapidly growing air cargo arm will have more than 85 aircraft “later this season.” Amazon also operates a pool of more than 50,000 trailers, driven by contractors, the company said Monday.
But the company’s physical infrastructure represents a huge advantage over smaller rivals, he said on a conference call last week hosted by analysts with Jefferies LLC. Amazon can store inventory in warehouses that serve as import way stations, an advantage shared by the likes of Walmart Inc., Target Corp., Home Depot Inc. and Best Buy Co.

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US shippers struggle to bridge retail inventory gap

The Journal Of Commerce William B. Cassidy October 25, 2021

Subscription-Based

The gap between retail inventories and sales was still almost $55 billion in August, the latest US Census Bureau data shows. Retail inventories were up 2.3 percent in August year over year, but down 9.2 percent when compared with August 2019, the prepandemic high point for retail stocks.
Retailers and vendors of retail goods are trying multiple strategies to cope, with some limiting their sales to the best-selling goods, some prebuying and stockpiling, and some changing or refining their use of multiple distribution channels.
Many are finding they need more inventory than they did prepandemic to meet demand.

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