Conditions in the supply chain improve after the COVID truck
The COVID “chaos” has improved conditions at US ports and for truck-moved freight, but rail shippers still face difficulties, presenters at the International Sweetener Colloquium on February 28 stated.
“After two or three years of chaos, we’re back to normal,” stated Marcel van Dijk, cargo marketing manager at The Port of Los Angeles. He also mentioned that things were already improving on the West Coast, but he pointed out that more ships were being diverted to the Gulf and East Coast via the Panama Canal, partly because of the unresolved labor dispute in the West.
With both sides—the International Longshore and Warehouse Union, which represents workers, and the Pacific Maritime Association, which represents employers—announcing that talks are ongoing and showing signs of progress toward an agreement, the threat of a strike by more than 22,000 maritime union members who have been without a contract since July 1 appears to have subsided. According to him, the Port of Los Angeles has made advancements and is currently implementing more modifications to expedite the truck-driven transit of containers out of the port.
Since COVID, the truck freight market has had additional capacity, according to Jim Ritchie, president and chief executive officer of RedStone Logistics, but the concern was, “Will it get put to use effectively?” Because higher rates translated into greater compensation, which in turn attracted more drivers, he pointed out that the industry had more drivers than it had prior to the epidemic. He claimed that instead of driving more, drivers made the decision to cut back on their driving hours in order to better their lifestyle. He pointed out that there has been a lack of truck drivers for the past 20 years, partly due to the fact that driver pay has not increased at the same rate as other blue-collar employment.
Mr. Ritchie questioned sarcastically, “Who doesn’t want to leave home for three weeks and live in your car?” in reference to the difficulty in getting younger people to drive trucks. He noted that immigration policy changes and efforts to lower the minimum age for interstate truck drivers to 18 were both “by no means settled yet.”
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Railroads continue to face difficulties, notwithstanding gains in port efficiency and truck freight capacity following COVID.
According to Jill Brubaker, executive director of the Rail Customer Coalition, “no competitive pricing” and the fact that many rail-served areas are “captive” to a single carrier are contributing factors to the persistence of rail freight challenges. She pointed out that even though railroads were “working hard to get employees back,” labor challenges persisted after they laid off roughly 30% of their workforce under COVID. She claimed that railroads’ efforts to “create record profits” for stockholders were impeding rail service.