Driver shortage can create logistical and supply chain issues: Land transportation in North America.

 Abstract:

Brown notes that trucking companies can’t realistically expect to get “lifer” employees anymore – the guys and gals who stick with a company for their entire career. Logistic activities undertaken in-house by the users of the services and the operations of external service providers. How and why the driver shortage issue developed and possible solutions one of the reason of the shortage, according to ATA is explosion of shopping due to retail giant Amazon and Walmart. Although ATA wanted some attention from government arguing systematically about driver shortage issue. Some trucking companies are working harder to make the profession suitable to women by addressing some of the issues like safety, comfort and the ability to juggle driving career with family life. The BLS says that if wage adjustment and other regular formalities allow fix driver shortage, why there should be an issue of driver shortage since 1980. All firms and relationships that get a product to market, including the original acquisition of raw materials; production of the item at a manufacturing facility; distribution to a retailer; sale of the finished item to the customer, and any installation, repair, or service activities that follow the sale.

Keywords: Driver shortage, supply chain,North America, USA, Canada etc.

Driver-shortage-issue_F
Driver shortage issue in North America affects SCM

Introduction

Our study includes two North American countries, i.e. United States of America and Canada, where it is supposed that due to driver unavailability on time carriers can’t carry their cargo in a proper way. But some are telling that it is not real but created by some stake holders’ deliberate action. However, we need to check in further details the pros and cons of this problem in some details. Carriers complain that they are getting hard time to get new drivers, while they are investing time and resources to get new driver. “Without well-developed transportation systems, logistics could not bring its advantages into full play. Besides, a good transport system in logistics activities could provide better logistics efficiency, reduce operation cost, and promote service quality. The improvement of transportation systems needs the effort from both public and private sectors. A well-operated logistics system could increase both the competitiveness of the government and enterprises.”[1]

Logistic services

“Logistics services, information systems and infrastructure/resources are the three components of this system and closely linked. The interaction of the three main components in the logistics system is interpreted as follows. Logistics services support the movement of materials and products from inputs through production to consumers, as well as associated waste disposal and reverse flows. They include activities undertaken in-house by the users of the services (e.g. storage or inventory control at a manufacturer’s plant) and the operations of external service providers.”[1]

Demography of population and drivers and research findings by BLS

With the industry’s current driver pool aging rapidly and the Baby Boomer generation set to start retiring in droves, TST’s Brown says it’s up to recruiters to adapt to new hiring realities in the world of trucking. Brown notes that trucking companies can’t realistically expect to get “lifer” employees anymore – the guys and gals who stick with a company for their entire career. “If you’re dealing with a ‘Y’ generation that born within 1980 to 2000 kind of driver, you can’t expect him or her to be there 30 years later. If that happens, that’s great, but for the most part, if you hire a Y generation driver if he gives you two years, employers has to tolerate it. Researchers from BLS (US department of Labor’s Bureau of Labor Statistics) find that when there is a shortage in labor market they solve it by adjust wage increases. Trucking also do the same. Although ATA (American Trucking Association) wanted some attention from government arguing systematically about driver shortage issue. The BLS says that if wage adjustment and other regular formalities allow fix driver shortage, why there should be an issue of driver shortage since 1980. High turnover in this trucking sector is a cost minimizing action as new drivers do not charge higher salary. Carriers keep driver pay low to keep shipping cost is the area where carriers compete with each other. ATA push for a solution to keep high turnover that makes experienced drivers out of service.

How and why the driver shortage issue developed and possible solutions

One of the reason of the shortage, according to ATA (American Trucking Association) is explosion of shopping due to retail giant Amazon and Walmart. Current driver shortage is about 50,000 and it would become 100,000 in a few years. It is being fueled by retirement of drivers and young generation is not interested to take driving as a profession and keep themselves in distant places from home. Others argue that the problem stems from trucking companies themselves and their ability to retain good workers. Although drivers are short, freight is increasing day by day. According to OOIDA total number of drivers is not shorter than the requirements. There are approximately 450,000 new CDL holders each year. One possible solution that comes from the federal government in the form of a bill that would decrease the driving age of interstate carriers to 18 instead of 21. If the program proves to be okay for execution individuals just out of high school would have the opportunity to begin their carriers when they are making their decision about their future career path. Some trucking companies are working harder to make the profession suitable to women by addressing some of the issues like safety, comfort and the ability to juggle driving career with family life. By utilizing mobile friendly technology these companies are streamlining the hiring process by making it easy to apply and complete background screening process-no matter where they are. Research shows that it will increase retention by 20 percent. Many trucking companies are rethinking their benefits, increased compensation, more time at home and better retirement plan etc. to get the drivers at the door and keeping them there.

Effects on the supply chain

SCM includes movement of products from suppliers to manufacturers to distributors. It also includes movement of information, funds, and products in both directions. It’s more accurate to use the term “supply network” or “supply web”. all firms and relationships that get a product to market, including the original acquisition of raw materials; production of the item at a manufacturing facility; distribution to a retailer; sale of the finished item to the customer, and any installation, repair, or service activities that follow the sale. Therefore, the driver shortage is making a ripple impact. Corporations vying for qualified employees are giving higher pay and sign language bonuses. The median get drivers during this class is $59,000, in step with the ATA. Practiced drivers United Nations agency work for personal fleets will create the maximum amount as $86,000 a year. [4]

Conclusion

Driver shortage affects logistics and supply chain in a way that logic functions of a supply may not possible to perform in due time. And supply will usually see that total supply chain cost may increase. There are many answers regarding the reason of shortage in USA and Canada. And the intensity of shortage is not same which we can see from the total driver shortage quantity informed by ATA and CTA. But demographic factors are similar in both countries, also the strategies of truck owners. Owners like to earn more supply chain value paying drivers less by employing new drivers. But new drivers who are younger are not very much dedicated to the industry and switching jobs more. This way actually this supply chain experiencing driver shortage which ultimately affects the supply chain network and supply chain cost.

References

 1. Tseng,Yung-yu. Taylor, Michael A P. (2005). “The Role of Transportation in Logistics Chain”.  Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1657 – 1672, 2005
 2. Ledlow, Adam. (2013). “New report quantifies Canada’s driver shortage”. https://www.trucknews.com/
3. Bergeron.Lindsey. (2018). “Is there a driver shortage”.https://foleyservices.com/ Tables
4. https://www.cebglobal.com/talentdaily/truck-driver-shortage-creating-supply-chain-challenge-for-us-businesses/

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