HomeBudget & Tax NewsSupply Chain Problems Expected to Continue Through Christmas

Supply Chain Problems Expected to Continue Through Christmas

Government policies are causing jobs to go unfilled. Containers await trucks, drivers.

Supply chain disruptions are easing, but shipping executives are still projecting long-lasting logjams at the nation’s ports.

The supply chain was disrupted initially when workers were sent home in large numbers as a response to the COVID-19 pandemic. Workers have been slow to return to the docks and plants.

The supply chain traffic jam continues to be felt, with dozens of ships packed with consumer goods still stuck at the ports.

Major retailers such as Amazon, Home Depot, and Walmart account for nearly 25 percent of all goods arriving at U.S. West Coast ports. Consumers may not find orders for gifts filled by Christmas, the retailers are warning.

Flexport CEO Ryan Petersen said in a tweet the supply chain problem is a “traffic jam” with ports at a standstill and truck drivers stuck in the middle of the mess.

Petersen observed the situation at the Port of Long Beach, California. Cranes were barely working. Terminals were overflowing with containers. With terminals packed with containers, no new containers can be brought to the area. A truck driver stuck with a container that cannot be offloaded from his truck is also stuck, because the trucker cannot pick up a new container until the previous one is removed. That leaves fewer trucks able to start moving products out of the port area.

Truckers cannot just remove the container in the truck yard. The City of Long Beach does not allow storage of containers to be stacked more than two-high. Violation of the law could result in the trucking operation being shut down.

“This is a negative feedback loop that is rapidly cycling out of control,” Petersen said. “If it continues unabated, it will destroy the global economy. Leadership is the missing ingredient at this point.”

Investors may soon also feel the effects of inflation and supply chain disruption. Apple was forced to reduce its manufacturing of iPhones because of supply chain disruptions, The Wall Street Journal reports. They are already predicting increased challenges in the current quarter.

The Wall Street Journal also reported that Amazon documented a reduction in earnings due to the tight labor market and supply chain issues. These issues are also partly to blame for increase in prices for consumers. The impact on the tech giants could drive down stock prices.

Many economists and logistics industry executives are not expecting to see this problem solved soon. They anticipate the logjam to continue through this year and well into 2022, The Wall Street Journal reports.

As the supply chain disruption continues, businesses are looking for solutions they can implement before holiday spending ends. Truckers are in high demand, with companies offering attractive salaries and signing bonuses. Some companies are offering more than $100,000 a year but still having difficulty attracting candidates, Fox Business News (FBN) reports.

The American Trucking Association estimates that the nation is facing a shortage of approximately 80,000 truck drivers at present.

“If you have a commercial driver’s license and if you have experience and are able to operate a heavy-duty vehicle safely, likely you are in demand no matter what, because you need drivers,” Harbor Trucking Association CEO Matt Schrap told FBN.

Even if the industry adds more drivers, the industry is hampered by federal government limitations on the amount they can work. The U.S. Department of Transportation regulates the number of hours a truck can operate, with certain exceptions. The industry has requested a change to the law that established this limitation, but most Democrats oppose any alteration to it.

Currently, federal law requires the use of an electronic logging device on each truck. This device records data about the operation of the vehicle and driver activity, Teletrac Navman reports. Drivers are only allowed to work a certain number of hours between rest periods, and the logging devices ensure compliance.

The ELD mandate replaced the old system of paper logs in 2017 after a report connected tired drivers to road accidents. The government’s response was to track and monitor the drivers and require and stringently enforce break times.

Drivers complain the ELD mandate is too intrusive. Allen Cline is a retired farmer who owned an over-the-road trucking company for more than 20 years. Cline says he does not believe the supply chain disruption is caused mainly by a shortage of truckers, as many in the media have claimed.

“If it was just a truck driver shortage, why is it just on the West Coast?” Cline said. “Florida unloads a lot of containers every day, and they don’t seem to be having the same problem. I’m sure their clean energy standards [in California] have something to do with it.”

The government shutdowns and unemployment bonuses imposed by government add to the problems, Cline says.

“It’s very hard to shut an economy down for weeks or months and then start back up unevenly while the federal government is pumping money out directly to citizens and to companies and expect the supply chain to run smoothly,” Cline said.

As the government sent stimulus checks out through the economy, it inevitably delayed the return to employment for many workers, economist Stephen Moore says.

“We’re paying people not to work, with high unemployment benefits and expanded food stamps,” Moore told Newsmax.

Another problem is now adding to the labor crisis as American workers are starting to strike at major companies. For the first time in four decades,  employees are increasingly walking off the job at major companies.

“We already have nearly 11 million unfilled jobs thanks to super-generous welfare benefits,” Moore writes for Budget & Tax News. “The shortage of dockworkers, truckers, and factory workers is inciting higher inflation due to shortages. Now, if thousands of more workers in critical industries go on strike, havoc could prevail.”

These government policies are causing jobs to remain unfilled, Moore says. Workers are paid to stay home and collect government “stimulus” money and other aid, truckers face increasing regulations and zealous government oversight, and businesses are making forced terminations of employees who refuse to accept vaccine mandates.

“It’s all due to political incompetence that starts in the Oval Office,” Moore writes.

Eileen Griffin
Eileen Griffin
Eileen Griffin writes from Richland, Washington.

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