Whether on the news, in board rooms or on Capitol Hill, the supply chain crisis continues to be top of mind with business leaders and policymakers. The same is true for convenience and fuel retailers. Like most industries, the convenience retailing industry is suffering the negative impacts of international supply chain disruptions. Out-of-stock issues continue to plague the industry across various product types. From a wide range of products to packaging materials to fuel dispensing parts and components, convenience retailers are experiencing delays and inconsistent deliveries and shortages of supplies. All of this is causing dramatic increases in costs within all aspects of the supply chain.
In 2021, COVID-19, the winter freeze in Texas, wildfires in the West and hurricanes in the Gulf, along with the cyberattack on the Colonial Pipeline, further highlighted the difficulties facing the convenience and fuel retailing industry. What’s more, the industry also had to contend with truck driver shortages, especially the demand for fuel haulers. As the pandemic continued, labor shortages and other supply chain issues have continued to challenge our industry, including shortages of many center-store products and packaging, as well as fuel supplies in some regions of the country.
After a winter of severe snowstorms and tornados, COVID-19-related restrictions and mandates are easing, the labor market is readjusting, consumer demand is skyrocketing and inflation is rising—along with geopolitical tensions with Russia’s military assault on Ukraine. Prices for goods are increasing in large part because demand has sur- passed available capacity of the supply chain. In looking at the supply chain crisis, two underlying questions come up over and over with businesses leaders and policymakers: How do we increase our transportation capacity, and how do we increase the labor pool?
While businesses continue to find creative solutions to attract more workers and truck drivers, politicians and policymakers in Washington, D.C., are also looking at ways to improve the transportation system and labor supply.
TRANSPORTATION POLICIES
Hours-of-Service Flexibility
In times of emergency, the Federal Motor Carrier Safety Administration (FMCSA) has the authority to grant hours-of-service waivers to provide flexibility to truckers. During the COVID-19 pandemic and natural disasters in 2021 and so far in 2022, FMCSA granted numerous waivers for haulers transporting food, fuel and needed sup- plies. NACS, along with other industry groups, is advocating for hours-of- service relief during the supply chain crisis since regulatory flexibility is an important tool in helping with this issue. For example, the time that truck drivers spend waiting in long lines to get into ports and terminals is counted toward their hours-of-service limits. Having the flexibility to waive those limits allows for more trucking capacity to move goods from ports to storage warehouses to stores.
Truck Weight Limits
Another tool to help alleviate the supply chain crisis for over-the-road shippers is to increase the federal gross vehicle weight (GVW) limits on interstates. The current federal limit is 80,000 pounds. During the COVID-19 crisis, the CARES Act included language to allow states to issue permits for trucks to operate above federal weight limits on interstates, which provided much-needed supplies to communities. Though only available for 120 days, companies that took advantage of this provision were able to increase their efficiencies with no apparent increased safety risk. More recently, states such as California and Ohio issued similar waivers on their state highways. In California, the governor issued temporary permits to increase weight limits for transportation intermodal shipping containers. In Ohio, the governor issued an executive order to increase the state weight limit to 90,000 pounds. NACS supports a federal GVW increase to help with interstate commerce and has been working with other industry groups and coalitions for this additional tool to help expand and enhance trucking and shipping capacity.
Young Truckers Pilot Program
The Infrastructure Investment and Jobs Act (IIJA) created a young truck driver apprenticeship pilot program. FMCSA will administer the program, which creates a two-stage, safety focused apprenticeship to allow 18-20-year-old qualified drivers who satisfy safety, training and technology requirements to operate in interstate commerce. Forty-nine states and the District of Columbia allow drivers younger than 21 to get their commercial drivers’ license and operate on intrastate highways.
Laws that prevent these younger drivers from operating large trucks on interstates are an ongoing issue for the convenience industry, especially for those retailers that have trucking operations and stores in more than one state. This pilot program will provide some relief for the truck driver shortage. NACS supports allowing properly trained and certified truck drivers between the ages of 18 and 20 to operate in interstate commerce. NACS has been working with other stakeholders and coalitions to pass legislation to allow this and is working with the Biden Administration to ensure that the pilot program is implemented properly.
LABOR SUPPLY
Immigration – Employment Visa Modernization
Traditionally, the convenience industry doesn’t fit well into any of the existing employment-based visa programs.
Most of the jobs our industry needs to fill don’t fit into the H-1B category for skilled workers, and it is often very difficult for convenience retailers to prove the requirements of the H-2B category for seasonal non-agriculture workers. To that end, NACS is working with Congress on proposals to establish a new visa category for the convenience and fuel retailing industry, along with other industries traditionally left out of the current system. The new category would be temporary and available during times of relatively low unemployment where labor shortages still exist, such as we’re experiencing now.
In addition to legislative work, NACS has been in touch with Department of Homeland Security officials to offer suggestions gleaned from a targeted survey of NACS member companies on how to improve the current system and lower the barriers to entry that convenience retailers face in the visa programs.
Older Workers
Many retirees are interested in returning to the workforce in order to supplement their fixed incomes; however, the U.S. Social Security system includes some barriers to this. Notably, the Retirement Earnings Test (RET), repealed in 2000 for seniors who have passed their normal retirement age, remains in place for seniors who have not reached that age. This reduces their benefits by $1 for every $2 over an annually adjusted maximum of outside income. This reduction has become a significant hinderance to seniors returning to work. What’s more, while benefits are not reduced once a person reaches full retirement age, regardless of how much income they earn, their benefits do become taxable if their total outside income plus half of their benefits exceeds a certain amount. Much like with the visa categories discussed above, NACS is exploring options to reduce these barriers to seniors returning to the workforce. Many NACS members report that older adults make a great addition to their front-line teams, and retailers hope they can continue to offer employment opportunities to this group.
The supply chain crisis is complex, and it won’t be solved quickly or with a single policy. However, NACS is working closely with our members, other industry leaders and policymakers to work on removing government hurdles and finding solutions to the various parts of the supply chain crisis.