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 are 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 reasons for the shortage, according to ATA is an explosion of shopping due to retail giants Amazon and Walmart. Although ATA wanted some attention from the government arguing systematically about the 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 a 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 stakeholders’ deliberate action. However, we need to check in further detail the pros and cons of this problem in some details. Carriers complain that they are getting a hard time getting new drivers, while they are investing time and resources to get a 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 costs, and promote service quality. The improvement of transportation systems needs effort from both the 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 are 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 have to tolerate it. Researchers from BLS (US Department of Labor’s Bureau of Labor Statistics) find that when there is a shortage in the labor market they solve it by adjusting wage increases. Trucking also does the same. Although ATA (American Trucking Association) wanted some attention from the government arguing systematically about the driver shortage issue. The BLS says that if wage adjustment and other regular formalities allow fixing 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 salaries. Carriers keep driver pay low to keep shipping costs is the area where carriers compete with each other. ATA pushes 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 reasons for the shortage, according to ATA (American Trucking Association) is an explosion of shopping due to retail giants Amazon and Walmart. The current driver shortage is about 50,000 and it would become 100,000 in a few years. It is being fueled by the retirement of drivers and the young generation is not interested to take driving as a profession and keeps 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 is 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 careers when they are making their decision about their future career paths. Some trucking companies are working harder to make the profession suitable for women by addressing some of the issues like safety, comfort, and the ability to juggle a 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 the 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 plans, etc. to get the drivers at the door and keep them there.

Effects on the supply chain

SCM includes the movement of products from suppliers to manufacturers to distributors. It also includes the 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 be 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 for the shortage in USA and Canada. And the intensity of the shortage is not the 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 by 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/

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.