“There is no ‘cavalry’ coming” to the rescue for the transport industry.
So says an article on the Medium website by Ryan Johnson called “I’m a Twenty Year Truck Driver, I Will Tell You Why America’s Shipping Crisis’ Will Not End”. It’s grim.
The congestion in the transport industry has a number of causes, according to Johnson. One startling example has to do with the consequences of slowdowns at ports:
“Consider volume shipping customers who primarily use ‘general freight’, which is the lowest cost shipping and typically travels in a ‘space available’ fashion. They have usually been able to get their freight moved from origination to delivery within two weeks. Think about how you get your packages from Amazon. Even without paying for Prime, you usually get your stuff in a week. The majority of freight travels at this low cost, ‘no guarantee of delivery date’ way, and for the most part it’s been fine for both shippers and consumers. Those days are coming to an end.”
If Johnson is right, these facts could convulse online shopping. It now looks like an irreversible trend, but that could easily turn around.
Most disturbing is the situation of independent truckers: “Most port drivers are ‘independent contractors’, leased onto a carrier who is paying them by the load. Whether their load takes two hours, fourteen hours, or three days to complete, they get paid the same, and they have to pay 90% of their truck operating expenses (the carrier might pay the other 10%, but usually less.)
“The rates paid to non-union drivers for shipping container transport are usually extremely low. In a majority of cases, these drivers don’t come close to my union wages. They pay for all their own repairs and fuel, and all truck related expenses.
“So when the coastal ports started getting clogged up last spring due to the impacts of COVID on business everywhere, drivers started refusing to show up. . . . While carriers were charging increased pandemic shipping rates, none of those rate increases went to the driver wages. Many drivers simply quit.”
Lest you think Johnson’s article is mere agitprop from a union employee, let us go to another side of the industry.
Jeff Jerue is president of John Jerue Truck Brokers BB #:123544. Based in Lakeland, FL, it specializes in refrigerated trucking, 60 percent of which involves the produce industry.
“The cost of equipment has increased by 40 percent,” Jerue says. “For both tractor and trailer, costs of insurance going up and down the highway basically quadrupled. Rates don’t reflect these influences.”
Until recently, if independent truckers “could drive the trucks themselves, they could make a decent, middle-class living” based in states like Alabama and the Carolinas, Jerue adds. “It’s not true anymore. Those guys have died off.”
Jerue has few kind words about brokers today: “Most brokers forget who pays the bills. . . . These brokers, they treat the truckers terribly.”
Some point the blame at the ports: “What’s so frustrating is that we have plenty of work, we have the volume and the customers, but the ports are not allocating—or making that work available to my drivers on a consistent basis,” said one trucking executive, who declined to be identified.
Nevertheless, like other industries suffering from the Great Resignation, trucking is experiencing huge amounts of worker dissatisfaction with both pay and working conditions.
Possibly we are seeing the Great Resignation in the wrong light. We associate strikes with guys standing outside factory shops in windbreakers, brandishing placards.
What if the Great Resignation is simply a huge, extended, unofficial, unorganized strike?
My thanks, incidentally, to my good friend and fellow writer, Francis DiMenno for pointing me towards the Ryan Johnson article.