GRAND RAPIDS, Mich.- The pandemic left various challenges for industries across the country, especially for logistics and transportation. There has been an evolving cycle of supply and material shortages, limiting the ability to manufacture trucks and transfer goods. Not only is the labor shortage affecting the industry, but another prominent issue is the lack of drivers to transport freight.
Causes
- Limited Components for Manufacturing
- Labor Supply Shortages
- Staffing Operation Shortages
- Rising Freight Rates
Limited Manufacturer Supply
Labor has been a significant challenge within the transportation industry since the beginning of the pandemic. Manufacturers of commercial trucks are backed up as far as a year on orders because of material shortages.
Employee Operations Shortage
Employers have been struggling to hire and retain employees. In May 2021, employers in the United States added 559,000 jobs. According to ABC News, the U.S. needs to fill positions as the demand for employees rises across every industry.
Due to the shortage of employees, companies are offering incentives to draw potential candidates’ interests, such as higher pay, with excellent benefits and perks. Although the initiative of the employer is significant, the unemployed individuals remain to stay cautious about looking for work, spiraling into the decrease of employees within the industry.
Rising Freight Rates
As the pandemic nears the end, consumer demand has shifted from goods to services. Transpiring from the shift, shipping rates have risen due to producers pushing off the costs to consumers.
With the demand for freight that needs transportation and the scarcity of trucks to follow, TIME explains how costs have risen higher than previously in 2020, jumping from 25% to 30%.
Overview
Despite high quantities of freight in need for delivery, labor shortages, and the sparse number of employees in transportation operation, the logistics and transportation industry will continue to prevail.
