US

Companies use six-figure salaries and $15,000 bonuses to lure in 80,000 truckers during supply jam

Haulage companies are offering six-figure salaries and $15,000 sign-on bonuses while struggling to attract 80,000 new drivers who are needed to relieve the nation’s supply crisis.

But industry experts said more drivers won’t alleviate the Ports of Los Angeles and Long Beach backlog, where an empty shipping container fiasco is preventing trucks from moving product to consumers.

Facing an exodus of 600,000 retiring truckers by 2028, the transportation industry is desperate to recruit more people and estimates that 80,000 new hires are needed this year to offset attrition and clear a backed-up supply chain.

‘I can tell you that pretty much every single one of our members – no matter what part of the industry they’re in – is looking for drivers,’ Chris Shimoda, senior vice president of government affairs at the California Trucking Association, told DailyMail.com.

‘They are raising pay across the board, introducing things like signing and retention bonuses, trying to provide more local driving opportunities so that the drivers can be home with their families at night, but it’s been a real struggle for several years.’

Companies are offering lucrative sign-on and retention bonuses in an attempt to lure more people into the truck driving industry, which seeks to hire 80,000 more drivers this year

Companies are offering lucrative sign-on and retention bonuses in an attempt to lure more people into the truck driving industry, which seeks to hire 80,000 more drivers this year

Lorries laden with empty shipping containers are now parking in residential neighborhoods, such as Wilmington in California, because there  is no space at ports

Lorries laden with empty shipping containers are now parking in residential neighborhoods, such as Wilmington in California, because there  is no space at ports   

Local residents complain that the trucks are blocking their driveways after being abandoned by the drivers

Local residents complain that the trucks are blocking their driveways after being abandoned by the drivers  

The supply chain crisis has seen a backlog of containers build up at ports meaning that empty ones can't be returned because there is no room for them

The supply chain crisis has seen a backlog of containers build up at ports meaning that empty ones can’t be returned because there is no room for them 

US Foods, seeking a Northern Californian with a commercial driver’s license (CDL), is offering a $15,000 sign-up bonus and a $1,000 quarterly bonus to candidates willing to work for $38.50 an hour.

And last June, JK Moving Services said it would guarantee its qualified drivers a salary of at least $100,000 as ‘market demands grow and the pool of qualified candidates shrinks.’

It’s all happening as shipping backlogs delay cripple the supply chain, with Christmas toys and holiday goodies among the items stranded in the Pacific as freightliners queue for weeks to unload cargo.

Truck drivers’ wages have spiked by about 20 percent as companies work to lure newcomers into the industry, Shimoda said.

Some trucking companies are offering six-figure salaries to persuade prospective hires during a time when demand outweighs supply and California's biggest ports are backed up

Some trucking companies are offering six-figure salaries to persuade prospective hires during a time when demand outweighs supply and California’s biggest ports are backed up

Chris Shimoda, a California Trucking Association exec, CDLs are 'worth their weight in gold'

Chris Shimoda, a California Trucking Association exec, CDLs are ‘worth their weight in gold’

‘The industry is really using every tool at their disposal to try to get drivers in the door and to get them to stay,’ he said. ‘It’s a driver’s world right now. If you have a commercial driver’s license, it’s worth its weight in gold right now.

‘It’s a good time to have a have a CDL.’

But more drivers won’t solve all the transportation industry’s problems at the embattled Ports of Long Angeles and Long Beach, experts said.

Matt Schrap, chief executive of the Harbor Trucking Association, said thousands of empty containers are creating a nightmare for drivers trying to move product.

There's no truck driver shortage in the Long Beach and Los Angeles areas, where a steady stream of transports is coming and going to keep the movement of commerce flowing

There’s no truck driver shortage in the Long Beach and Los Angeles areas, where a steady stream of transports is coming and going to keep the movement of commerce flowing

Right now, the mass congestion of empty containers is monopolizing space in nearby truck lots, blocking filled containers from getting moved, and crippling efficiency.

In order to fetch a new order at the port, trucks must first return their previously-used container to the steamships – but with space at a premium, cargo operators are refusing to accept the empty containers.

‘What we’re seeing in [Long Beach and L.A.] is really an issue around productivity, not necessarily a lack of drivers,’ Schrap told DailyMail.com.

‘It’s a function of our inability to return empty containers back into the port to pull the important loads off the docks.’

The empty containers aren’t just taking up space.

They’re also preventing truckers from freeing up their chassis, a piece of equipment necessary to wheel loads of cargo onto modular trailers for delivery. 

‘It is extremely inefficient,’ Schrap said. ‘We are essentially moving containers around for the operational needs of the steamship lines and not being compensated for it.’

To top it off, ship operators are charging trucking companies – stuck with storing the equipment on their own lots – a per diem (daily levy) of $40-to-$50 for failing to return them on time, Schrap said.

‘We have to be accountable for them if they’re in our possession,’ he said. ‘We just have nowhere to keep them. So that’s why they’re literally on streets and they’re being graffiti tagged because they’re sitting out there.’

TGS Logistics Inc chief operations officer Robert Loya said the cost of storing the containers is driving some small trucking companies out of business

 TGS Logistics Inc chief operations officer Robert Loya said the cost of storing the containers is driving some small trucking companies out of business

The situation is also irritating local residents, who say empty shipping containers are being dumped in local communities.

‘Sometimes they just unload the trailer in the street with no front part of it, and they just leave it there,’ Sonia Cervantes told CBS Los Angeles.

UCTI Trucking owner Frank Arrieran told the outlet that he’s resorted to keeping the containers on his yard, where space is already at a premium.

“Right now with the ports and everything that’s going on over there, we’re stuck with the containers, having to bring them all to the yard, and we only have so much space,” he said.

The ports' contingency anchorages, which previously went unused, are now 'essentially full'

The ports’ contingency anchorages, which previously went unused, are now ‘essentially full’

Of the 100 vessels at anchor October 18, 70 are cargo ships carrying consumer goods

Of the 100 vessels at anchor October 18, 70 are cargo ships carrying consumer goods

It comes as Shawn Yadon, CEO of the California Trucking Association, said Officials in Southern California should consider declaring a state of emergency to help ease clogged ports.

‘I think we are in a situation in California where a state of emergency related to the ports is certainly something that should be considered,’ he said.

It’s not helping the situation at the ports, which broke more records Monday as massive bottlenecks continued to wreak supply chain havoc.

The Marine Exchange of Southern California reported 100 vessels berthed October 18, topping the previous record of 97 set September 19. 

Both figures are markedly higher than during pre-pandemic times, when just 17 ships were anchored.

The Marine Exchange of Southern California reported 100 vessels at anchor October 18, topping the previous record of 97 set September 19

The Marine Exchange of Southern California reported 100 vessels at anchor October 18, topping the previous record of 97 set September 19

Governor Gavin Newsom on October 20 signed an executive order directing state agencies to find ways to alleviate congestion at the ports, including by identifying state-owned properties and other locations that could be used for storage.

While TGS Logistics Inc chief operations officer Robert Loya welcomed the news, he said it wasn’t clear who would pay for storing the empty containers, or whether trucking companies would still be on the hook for per diems.

 These small American companies are going under because these big foreign entity steamship lines are controlling the port and controlling our economy. It’s a shame.

‘Will they take them off the chassis? Are they going to take the containers and put them on the ground so we can use the chassis?’ Loya told DailyMail.com. ‘There’s a lot of things that need to be worked out, and fingers are going to be pointing about who’s going to pay.’

He said the extra operating costs being brought on by the steamships has driven some small trucking businesses out of business.

‘We operate on razor-thin margins,’ Loya said. ‘These small American companies are going under because these big foreign entity steamship lines are controlling the port and controlling our economy.

‘It’s a shame.’

The supply chain crisis is one unseen since World War II when ‘there were submarines sinking commercial traders,’ an expert has warned.

And it’s bringing disaster for shoppers as items are being resold for more than double their cost and shipping delays mean more barren shelves.

Holiday shopping is expected to be especially fraught this year, as buyers contend with aggressive resellers and inflated prices – some jacking up toy prices by 400%.

Basic Fun chief executive Jay Foreman – who has been working in the toy industry for more than 30 years – said the current situation is unlike anything he’s ever seen.

‘I would predict that there’s never been anything like this disruption in the global trade supply chain since World War Two,’ he told DailyMail.com. ‘And you know World War Two, with a global supply chain was upset because there were submarines sinking commercial traders. We had a war going on.’

American Girl's sold-out blonde winter princess doll, which retailed for $250, is now going for up to $999 on platforms such as Mercari and eBay.

American Girl’s sold-out blonde winter princess doll, which retailed for $250, is now going for up to $999 on platforms such as Mercari and eBay.

The Biden administration has come under fire for its ‘too little, too late’ response to the backlog after it announced West Coast shipping ports would be running around the clock to ease bottlenecks in the system.

Toy flippers are already charging hefty premiums for sold-out products and computer chip shortages could leave some sought-after items back-ordered for several months, meaning kids who’ve requested them for Christmas could be left sorely disappointed on December 25 – just over two months away.

American Girl’s sold-out blonde winter princess doll, which retailed for $250, is now going for up to $999 on platforms such as Mercari and eBay.

The cat-themed Gabby’s Dollhouse, which is all the rage for this year’s preschoolers, has nearly quadrupled on some sites from its original $55 price tag.

The cat-themed Gabby’s Dollhouse (picture, right), which is all the rage for this year’s preschoolers, has nearly quadrupled on some sites from its original $55 price tag

The cat-themed Gabby’s Dollhouse (picture, right), which is all the rage for this year’s preschoolers, has nearly quadrupled on some sites from its original $55 price tag

Factory closures in China, labor shortages in the U.S., a freight container shortage, and a port backup are among the reasons for retail chaos.

The troubles are compounded by a lack of truck drivers, warehouses unequipped to receive mass amounts of product, the rising cost of fuel and more, Foreman said.  

‘Usually there’s 10 or 15 things in a supply chain that can affect whether you get things or not,’ he said. ‘This year, all bets are off and of the 10 or 15 things that make a supply chain tick, eight or 10 of them are all out whack at the same time.

‘Totally unprecedented.’

The toy was on eBay for $175 plus $40 shipping, putting the item at more than $200

The toy was on eBay for $175 plus $40 shipping, putting the item at more than $200

An up-and-coming toy called Tiny TV Classics is even getting snapped up faster than it can be produced, he said.

The problem is that the miniature televisions, which play snippets of real shows, require an integrated circuit chip that has a 200-day lead time.

It means that once those novelty items sell out, they’ll be off the shelves for several months, Foreman said.

Production of other computerized toys is also being hampered by the chip shortage, he added.

A reseller on Walmart.com had listed the item for $210

A reseller on Walmart.com had listed the item for $210

‘Even the Lite-Brite uses an integrated circuit chip, and that controls the movement of the light.     

‘In the Speak and Spell, it stores all the dialogue; that’s all in these integrated circuit chips.’ 

Amid the frenzy, young shoppers are likely to be most significantly affected by the supply shortage, a recent Morning Consult survey indicated.

About 70 percent of Generation Z and millennial holiday shoppers said an item they wanted was already out of stock in stores and 72 percent said an item was out of stock online; 65% found an item to be backordered or delivery delayed. Responses were gathered from October 1-3.

About 70 percent of Generation Z and millennial holiday shoppers said an item they wanted was already out of stock in stores and 72 percent said an item was out of stock online; 65% found an item to be backordered or delivery delayed

About 70 percent of Generation Z and millennial holiday shoppers said an item they wanted was already out of stock in stores and 72 percent said an item was out of stock online; 65% found an item to be backordered or delivery delayed

A Morning Consult survey published last week indicated that half of Americans have not yet begun their Christmas shopping - which means the supply chain crisis could be exacerbated as more and more shoppers look to make purchases

A Morning Consult survey published last week indicated that half of Americans have not yet begun their Christmas shopping – which means the supply chain crisis could be exacerbated as more and more shoppers look to make purchases

Another Morning Consult survey published last week indicated that half of Americans have not yet begun their Christmas shopping as of October 11 – which means the supply chain crisis could be exacerbated as more and more shoppers look to make purchases.

About half of shoppers who have started buying gifts experienced supply chain issues, the survey found.

It’s not just toys and goods that are becoming harder to find ahead of the holidays.

Stocking the fridge for holiday festivities could also be a challenge, with turkey giant Butterball warning that smaller birds might be harder to find this year.

Overall food prices are skyrocketing in the U.S., where beef prices have jumped 12.2 percent during the past year and the cost of bacon increased 17 percent, according to the U.S. Department of Labor.

Meat, poultry, fish and eggs sold at an eight percent premium this year, with prices up 15.7 percent since August 2019.

Katie Denis, vice president of research and industry narrative at the Consumer Brands Association, said the grocery sector is facing supply chain challenges of its own.

‘We’re entering what is going to be one of the busiest times of the year when it comes to shipping,’ she told DailyMail.com.

Bare shelves are seen at a Walgreen's in Minneapolis on Oct 9, 2021

Bare shelves are seen at a Walgreen’s in Minneapolis on Oct 9, 2021

‘That’s true whether you’re shipping gifts, whether you’re trying to get toys to your destination, or whether you’re trying to get grocery to stores.

‘It’s just going to be a volume game, and that’s a lot of what’s been troubling the supply chain for months now.

‘Demand has been off the charts.’

‘When you compound that with a profound labor shortage, you’re really setting up the perfect storm for a very difficult holiday season.’

Denis urged shoppers to avoid panic buying and hoarding items.

‘Don’t overbuy,’ she said.

‘I think overbuying is what drove a lot of the shelf clearing we saw earlier in the pandemic. That can really go a long way to making sure everyone has what they need and you’re not struggling to find the stuff on your list.’

Right now, thousands of freight containers filled with Christmas decorations, toys and other goods are stranded at the ports of Los Angeles and Long Beach, where cargo ships queue for weeks just to unload.

It takes twice as long as it normally would for a freight order from China to reach its final U.S. destination, Ocean Audit Inc. chief executive Steve Ferreira told Dailymail.com.

Supply chain bottlenecks are resulting in empty retail displays across the country. Pictured: more bare shelves in Minneapolis on Oct. 9, 2021

Supply chain bottlenecks are resulting in empty retail displays across the country. Pictured: more bare shelves in Minneapolis on Oct. 9, 2021

It’s also more expensive to move commerce by ocean freight.

About a year ago, retailers paid about $1,100 for a 40-foot crate traveling from Asia to LA.

The price has since skyrocketed to $5,000 per box, with some big box stores paying upward of $9,000 per container to ensure delivery, Ferreira said.

The costs will be absorbed by customers, who’ll be hard pressed to find a good deal on toys this season said Foreman, whose toymaking company produces Tonka, Care Bear and My Little Pony products.

‘You won’t probably find as many deals,’ Foreman said.

‘There certainly will be some deals, but the retailers have to cover the cost of the inflation and the high cost of ocean freight and transportation, which wasn’t calculated into the retail price of the merchandise when the season started.

‘So if they don’t want to raise prices – which many of them don’t want to do – they’re probably less likely to discount as much.’

Exacerbating the issue is that importers previously stuffed their warehouses before former president Donald Trump’s trade tariffs kicked in and have nowhere to store incoming product.

‘It is such a complex issue,’ Ferreira, an ocean freight expert, said. ‘The warehouses are full, but they’re filled with the wrong kind of product.’

Big box retailers – who often have their own storage facilities – are working around port backlogs and warehouse issues by chartering their own intercontinental freight ships, he said.

The nation’s largest ports shattered more records Monday as massive bottlenecks at the Ports of Los Angeles and Long Beach continue to wreak supply chain havoc.

The Marine Exchange of Southern California reported 100 vessels berthed October 18, topping the previous record of 97 set September 19.

Both figures are markedly higher than during pre-pandemic times, when just 17 ships were anchored.

 


Source link

Related Articles

Back to top button