Supply Chains Respond to Labor Challenges

As the pandemic continues to influence the work force in unprecedented ways, the “great resignation” coupled with COVID sick-outs have created the perfect storm of labor shortages across the board. Most severely impacted may be supply chain operations.

The Big Picture

According to a recent report in the Bureau of Labor Statistics as reported in Forbes, “there were 10.9 million open positions as of the end of July 2021, yet only 6.7 million hires were reported. This disparity is compounded by an increasing number of voluntary separations, with the number of employees leaving their jobs reaching 930,000 in July alone.” 

According to Kristen Fowler, Vice President at JMJ Phillip Executive Search,   

“Employers do not have the labor or capacity to effectively manage, process and unload U.S. imports, and the resulting slow delivery times and shipping delays have rippled across the entire supply chain.”

Keep on Truckin’?

What does that mean for e-commerce retailers?  The short answer is bad news, but there is good news on the road ahead as shippers pivot to meet a stark reality:

The American Trucking Associations estimates that in 2021 the truck driver shortage will hit a historic high of just over 80,000 drivers (the difference between the number of drivers currently in the market and the optimal number of drivers based on freight demand).

At current trends, the shortage could surpass 160,000 in 2030. This forecast is based on driver demographic trends, including gender and age, as well as expected freight growth. Because there is no single cause of the driver shortage, that means there is no single solution, according to the Association. 

Driver shortages are a contributing factor to the shipping capacity challenges facing small and mid-size retailers. It’s become apparent that carrier diversification is essential if they are to compete on an even playing field with the “big three” e-commerce businesses.

Carrier Diversification Simplified

In the past, carrier diversification has meant expensive, multiple contractual arrangements, lengthy, complex documents, hidden charges and tracking difficulties. The good news is that today, small and mid-size retailers can achieve carrier diversification simplified.

AirTerra provides “all-in” pricing, based on several factors, including distance from the retailer’s distribution center to the AirTerra sorting center, destination, and size of your parcel. This pricing model means there won’t be any surprise surcharges.

AirTerra can keep its pricing low because it aggregates demand across mid-size retailers, gaining scale in price negotiations with final mile delivery providers. In addition, the company utilizes “zone skipping” in its middle mile delivery service, enabling cost-savings on every delivery, which gets passed on to its customers.

Most importantly, carrier diversification means that AirTerra customers have a built-in buffer against the labor shortages that will continue to plague the trucking industry.