August 23, 2022 Message to the Membership

Posted on August 23, 2022 in

August 23, 2022 Message to the Membership

Apologies to those of you who attended our Network Series Breakfast last week featuring Clay Dowling and Dallas Beal of Ghost Transportation Services, because what you’re about to read will seem awfully familiar. 

For those of you who missed that excellent presentation on the current situation with supply chain issues, pay attention, because as was said many times during that presentation, there are many moving parts. 

People naturally tend to blame COVID-19 for the current state. And while that it is part of the story, it is indeed only part of the story. As Clay said, the transportation industry is a canary in the coal mine, and they saw this scenario coming months, if not years, ago. COVID only completed the final piece of the puzzle to assemble the perfect storm. 

Other recent factors include the flooding in southern British Columbia, which destroyed critical infrastructure and blocked off a significant thoroughfare, a stuck cargo ship in the Suez Canal, and the Russian invasion of Ukraine. 

But even prior to that, there were warning signs. Cheaper offshore product, primarily from China, became the go-to in our now, never-to-go-back, globalized economy. Removal of tariffs also spurred more international trade. This then allowed us to let our guard down, and our domestic infrastructure needs became lagging.  

Throw in some just-in-time delivery, which reduced overhead costs, and what’s likely as big a factor as anything, the disregard the world has for the transportation industry, and now the picture starts to become more clear. For example on this latter point, the average age of a truck driver is 58, so clearly the industry isn’t resonating with the younger crowd. 

Further confounding the issue is that container ships are now mega-sized, meaning the ports that they’re harbouring in can’t manage the 20,000-plus containers these monstrous ships have. Either the infrastructure, manpower (sorry, person power), or available land is lacking. And in many instances, it’s a combination of all three. 

Not only has this resulted in huge backlogs at the ports, but worse yet, the containers aren’t being allowed inland for reloading and shipping back overseas. Rather, the shippers want their containers back asap so they can load them up again. Have some peas, lentils or farm equipment you’d like to export? Sorry, you can’t use those containers, they’re already spoken for. 

Then there’s the inflationary pressure that the industry is facing. Diesel costs are soaring, as demand outpaces supply in not only this industry, but virtually every other one as well. Add in some regulatory burdens, such as environmental standards, and even more expenses are added to the mix. 

But back to the people part of the equation. For right or wrong, the Canada/U.S. border requires proof of vaccination to cross. Guess what, that has effectively taken approximately 50,000 drivers out of service. This shortage of drivers certainly isn’t limited to the trucking industry, as competition for anyone with a beating heart is literally across all industries.  

And never mind a work-from-home option, this industry can’t even offer you a 9-5 (or 8:27 am – 4:42 pm workday as was illustrated in the presentation, with every third Friday off) option. No, you’re signing up for an industry that’s 24/7/365.  

As for COVID’s contributions, well, it basically put a two-year halt on the inflow of people that might have otherwise come into that particular workforce. But it sure didn’t have the same effect on those who chose to leave the workforce. Noooo, anything but, as the wave of the Great Resignation (or is it Grey??) rolled on throughout the two-plus years of the pandemic. So now, as mentioned, we have a shortage of people for the workforce unlike anything we’ve ever seen. 

So when that happens, guess what happens to competition as it relates to their compensation? It goes up, which creates even more inflationary challenges, all of which eventually gets passed on to the consumer. 

As was emphasized in the presentation, pick anything… your shoes, your clothes washer, your toothpaste, your milk, your bread, your phone, your ear pods, etc., etc., etc. Literally anything. During at least one point in its destination from its source, (ie: manufacturing plant) to your shopping bag, it spent time on a truck. And about one-third of the cost of your product, on average, is attributed to transportation costs. And that’s not likely to go down anytime soon. In fact, it’s more likely to go up. 

Clay and Dallas said that you can have your product delivered two of three ways, but you don’t get all three. There’s Good. There’s Cheap. And there’s Fast. Good should always be one of the three, so that leaves you an option of choosing between cheap or fast. But you can’t have both. 

Buckle up, folks, it’s going to be a bumpy ride. 

Until next time, be safe, be smart, be considerate, be well, but most of all, be kind. 

 Keith Moen 

Executive Director 


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