Shipping costs have been increasing for years throughout the entire country, even affecting industry giants like Amazon, General Mills, and Walmart. Unfortunately (and unsurprisingly) these increases get passed down to the consumer in one way or another, but it is most often experienced as an increase in the prices of everyday goods.
One of the main reasons for increased shipping costs? A nationwide driver shortage that shows no signs of getting better.
The simple fact is that even when the economy is doing well, the trucking industry cannot keep up with the demand. Ask any transportation company why costs are going up and they will tell you the same thing:
Regardless of how much a load pays a driver, there just are not enough drivers available to move the freight customers need as quickly as they need it moved.
Driver shortages in America have been an issue for years, but never to this degree. Now, with low national unemployment rates, the pool of potential drivers is at a low point, and many are not interested in the job.
Why Is This Happening?
Among the young people just entering the job market, most simply aren’t interested in being truckers. This could be because of the long hours, stressful work environment, and isolation that can come with the job.
On top of that, many do not see a future in the industry, as self-driving trucks from Waymo and Uber inch closer and closer to becoming a reality. While these trucks are still years away from being a regular occurrence on the road, inroads are being made, as Waymo just launched a self-driving tractor pilot program in Atlanta.
The Electronic Log Mandate going into effect across the country is also causing existing drivers to drive fewer miles, as they are now federally mandated to be able to be on the road for no more than 11 hours at a time. These electric logging devices also stop less scrupulous drivers from lying about their drive time on the road.
While these devices increase safety, they have cut down on how much freight shipping is possible across the country.
How Does This Impact Consumer Pricing?
The lack of available drivers can be a huge bottleneck in the supply chain, so, with the driver shortage as it is, companies have to hire and retain new drivers by raising driver pay and providing additional benefits.
While this is good for the driver, it is not so great for everyone else. The higher driver pay causes an increase in operating costs for the trucking company, which causes higher shipping rates for trucking company clients, which causes higher prices for the everyday person shopping at the grocery store or local mall.
While no one is a fan of higher store prices, it appears to be unavoidable. Online shopping and the retail industry continue to outpace the rest of the economy, especially the transportation industry.
This is the reality of the world we live in, and higher prices of everyday goods may just be the new norm. Inflation has remained low over the past decade because companies found ways to be more efficient in their daily operations, offsetting the rising costs of shipping services. That is not something that can continue to happen forever, though, and we are now only beginning to understand how that will affect the rest of the economy.Tags: logistics, transportation, trucking