Missing truck drivers, retailer cabinets naked | Information, Sports activities, Jobs

What do we want? Truck drivers. When do we want them? Always, but especially now when, during a massive supply chain tsunami, the country is 80,000 drivers short of what would be needed to meet current freight demand.

That’s an estimate from the American Trucking Association, an Arlington, Va.-based trade group whose slogan is “when trucking stops America stops.”

Joseph Siksa, of Munhall has been an unofficial observer of pandemic shortage trends during his frequent trips to the Lowe’s hardware store for construction supplies.

“What’s going on here?” he’s wondered aloud to the staff. “These shelves are bare.”

His son, Brandon Siksa, bought furniture from an Amish store in Ohio in September. He’s not expecting to get it until January, his father said.

A sign on an empty rack at a Rite Aid pharmacy on Walnut Street asks for customers to be understanding about the supply chain issue: “PARDON OUR OUT OF STOCK.”

“We are working around the clock with our suppliers to refill our shelves,” it says.

There are many reasons for the empty shelves proliferating in stores.

Increased fuel costs don’t help. No one is excited about higher freight rates, and certainly the pandemic has jumbled the dynamics of the supply chain, said Scott Turer, chief financial officer of Three Rivers Marine and Rail Terminals in Charleroi, which handles commodities and bulk goods.

But the main problem is a lack of long-distance truckers.

“It’s a driver issue,” he said. “It’s been going on for a whole lot longer than COVID.”

Last month, the Pennsylvania House Transportation Committee convened a hearing on supply chain issues that confirmed what employers nationwide have found to be an unwelcome new normal: It’s hard to find workers.

“Most companies cannot reach full staffing levels, which continues to cause major delays in the supply chain,” Rebecca Oyler, president and CEO of the Pennsylvania Motor Truck Association, testified.

Safe parking areas needed

She offered some suggestions for attracting more people to drive trucks: Avoid workplace vaccine mandates, don’t add tolls to roads and provide more truck parking across the state.

“It is estimated that our nation’s truck drivers leave the highway early every day just to find safe parking, which forces each driver to lose over 9,300 miles per year that they could be delivering products,” she wrote. “This problem is very frustrating for drivers, with truck parking tied for first place in top concerns among drivers.”

But, as she acknowledged, it’s not just truck drivers. Train conductors and rail yard workers are also in short supply. It’s not a lack of empty cars or free tracks that has kept carloads at pre-pandemic levels for CSX Railroad, its president and CEO James Foote told investors during an earnings call in October.

“There was more business out there this quarter. There has been more business out there throughout this year that we could not handle. And the primary reason for that is our inability, like everyone else in the world right now, to ramp up our workforce.”

He described being caught off guard by the dynamic.

“No one ever gave me a heads-up that says, ‘Oh, by the way, when you want to hire somebody, nobody’s going to want to work for you. Plus all the people that you had furloughed … when we called them back and said, ‘You want to come back to work?’ They said, No, I’ve decided to go do something else. I’ve changed my lifestyle. I’m going to go enjoy the scenery on the Jersey coast or whatever it might be.”

It might be more accurate to say what we want right now is workers.

Demand growing

We also want stuff. Lots of stuff, delivered quickly, to our doors.

“[People] talk about driver shortages, facilities. The biggest piece of the puzzle is that demand is up 30% year over year for goods,” said Geoffrey Muessig, chief marketing officer at Pitt Ohio, a Strip District-based trucking and logistics firm.

Demand for all types of goods has soared over the past year while the manufacturers that make those goods and every company downstream of them can’t ramp up fast enough.

According to the Federal Reserve, the capacity at U.S. factories last month was almost back to its historical average after a drop from the pandemic.

Data from the U.S. Army Corps of Engineers’ Waterborne Commerce Statistical Center indicates that shipments of bulk commodities, such as coal, chemicals and grain, have followed the same pattern this year as in the years prior, including pre-pandemic.

So the factories are churning out almost as much as they did before COVID-19, and raw materials are being supplied in the same amounts as in prior years.

But an increase in demand has outpaced them by a mile, causing the delays that customers of both bulk and manufactured goods are seeing.

‘Just-in-time’ effect

The groundwork for these shortages and delays was already laid by yearslong shift to “just-in-time” logistics, which relies on the typical fluidity of the supply chain to avoid overstocking.

The inventory-to-sales ratio — a metric calculated by the U.S. Census Bureau that measures how much product companies have in stock — rose to a 25-year high in April 2020, the month after the World Health Organization declared COVID-19 a pandemic.

Stores were shuttered, customers stayed home, and, for a few weeks, inventory didn’t move.

But almost immediately, the ratio was back down to pre-pandemic levels. By July 2020, it hit a historic low of 1.2, meaning stores had enough merchandise to cover a month and a few days of sales. By April 2021, it had dwindled to 1.07.

“Our shippers are rethinking their whole inventory-and-stocking approach,” Muessig said. “Before, it was, ‘Keep it lean. Just in time.’

“Now, shippers are starting to move more product in larger quantities. [They’re] taking [it] where they can get it and moving it closer to their facilities.”

Pitt Ohio seized on this opportunity earlier this year by launching a warehouse and supply chain management division. It has opened storage facilities near its terminals in Pittsburgh, Harrisburg, Indianapolis and Cleveland, and in two Midwestern states through a sister company.

Warehouse demand is up across the board and has been for at least the past five years, said Louis Oliva, executive managing director at the real estate firm Newmark.

“Anything warehouse related, there’s more activity,” he said. More storage facilities are being built on speculation, which has attracted national developers. Rent prices are up, as is the number of retailers and logistics firms looking for space.

“I’ve been doing this for 35 years; this is the best industrial market we’ve had in Pittsburgh,” Oliva said.

John Bilyak, Colliers’ Pittsburgh market leader and head of industrial development, said the demand has been building as consumer shopping habits have shifted from brick-and-mortar stores to ecommerce, with the pandemic further supercharging this trend.

“This is not just a regional or local phenomenon,” Bilyak said. “We’re seeing historic demand in virtually every area.”

So, what do we want?

People, goods and services.

In short, everything.

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