No Minister

A trucker speaks

with one comment

It’s always good to hear something from the coal face of a problem.

In this case the ongoing logistics crisis in the USA, which is much more than the global shipping problems that every nation is experiencing, see here, here and here.

I’m A Twenty Year Truck Driver, I Will Tell You Why America’s “Shipping Crisis” Will Not End.

It seems that one of the basic problems is that at the US ports there is perhaps only one crane for every 50-100 trucks.

Let’s start with understanding some things about ports. Outside of dedicated port trucking companies, most trucking companies won’t touch shipping containers. There is a reason for that.

Think of going to the port as going to WalMart on Black Friday, but imagine only ONE cashier for thousands of customers. Think about the lines. Except at a port, there are at least THREE lines to get a container in or out. The first line is the ‘in’ gate, where hundreds of trucks daily have to pass through 5–10 available gates. The second line is waiting to pick up your container. The third line is for waiting to get out. For each of these lines the wait time is a minimum of an hour, and I’ve waited up to 8 hours in the first line just to get into the port. Some ports are worse than others, but excessive wait times are not uncommon. It’s a rare day when a driver gets in and out in under two hours. By ‘rare day’, I mean maybe a handful of times a year.

The reason this didn’t matter before was that the system had been smoothly flowing for years without the sort of major disruptions caused by government Covid responses, but once those problems hit, the system can’t recover quickly because it has no reserves. Think of it like a huge power station running on coal or gas; it’ll run great for months or years on end, but it’s not designed for rapid start up so if you shut the whole thing down it takes days to fire up.

The driver points out that as member of the Teamsters union he gets paid by the hour so although frustrating he’s not losing money. That’s not the case for the majority of truckers who are owner-operators. His opinion is that most will make almost no money and therefore have not shown up. So:

  • Not enough trucks because there’s no money in it.
  • Not enough port workers because of vaccine mandates and government relief payments that have seen them not return.
  • Not enough warehouse workers (where containers are unpacked) because the money is shit and the job is tough.
  • Not enough spaces to store containers (see this post)

But his key takeaway is this one:

What is going to compel the shippers and carriers to invest in the needed infrastructure? The owners of these companies can theoretically not change anything and their business will still be at full capacity because of the backlog of containers. The backlog of containers doesn’t hurt them. It hurts anyone paying shipping costs — that is, manufacturers selling products and consumers buying products.

But it doesn’t hurt the owners of the transportation business — in fact the laws of supply and demand mean that they are actually going to make more money through higher rates, without changing a thing. They don’t have to improve or add infrastructure (because it’s costly), and they don’t have to pay their workers more (warehouse workers, crane operators, truckers).

Before the pandemic, through the pandemic, and really for the whole history of the freight industry at all levels, owners make their money by having low labor costs — that is, low wages and bare minimum staffing. Many supply chain workers are paid minimum wages, no benefits, and there’s a high rate of turnover because the physical conditions can be brutal

So this is a market failure, and he says that there are no incentives in the system that will make it change.

Nobody is compelling the transportation industries to make the needed changes to their infrastructure. There are no laws compelling them to hire the needed workers, or pay them a living wage, or improve working conditions. And nobody is compelling them to buy more container chassis units, more cranes, or more storage space. This is for an industry that literally every business in the world is reliant on in some way or another.

By “compelling” you know he means laws and regulations (he is a Teamster after all) and perhaps the industry is such a monopoly, even if there are many companies competing with each other inside it, that such are needed. But it’s not like the industry doesn’t already have a mountain of regulations and laws around it.

To me it seems that it’s better to see what incentives can be changed or introduced because market incentives work better and faster than compulsion.

But how? Because it’s infrastructure one can’t just craft up another port to equal that of LA. These so-called natural monopolies are why we have Transpower in NZ looking after the primary power transmission lines, since nobody would ever “compete” by building a second or third set. Perhaps in this case the port could be cut up into multiple companies that are able to set their own rules for shipping, thus creating competition in its best form, the competition of ideas about how to do things.

I see that Florida Governor Ron DeSantis has already proposed one solution – send the ships to the ports of his state. That would be a major re-direction, especially for the China-US Pacific run (I’d think they’d transit the Indian and Atlantic oceans) but perhaps the extra time and fuel costs are now completely offset by the gains made in avoiding the West Coast?

Written by Tom Hunter

November 30, 2021 at 6:00 am

One Response

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  1. Unionism underpins this fiasco.

    Teamsters guaranteed pay despite sitting around, something that private enterprise knows simply does not work.

    Unions vote Democrat. Democrats ruin everything they touch, including cities.

    Democrats run fraudulent elections and the cycle continues.

    Leftism, unionism, socialism, communism. None are good but all are alive and well in New Zealand.

    Wake me up when voters figure it out.

    Kloyd0306

    November 30, 2021 at 8:30 am


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