From the news, around the water cooler or kitchen table, industry meetings or the White House and on Capitol Hill, everyone is talking about supply chain issues. And that is certainly the case with convenience retailers and NACS as our industry grapples with daily challenges in securing goods.
The scope of the problem is deep and diverse. It is truly a global issue and every industry sector, business and consumer is feeling the impact. Retailers are experiencing product shortages, delayed and inconsistent deliveries of materials and labor constraints, all of which lead to higher operating costs and higher costs for consumers.
Among the things in short supply are beverages and packaged goods, ingredients to prepare fresh food items and hot foods, and materials to package, wrap or carry foods, such as coffee cups, lids, utensils and napkins. Shortages in products, supplies and ingredients are having an impact on how and what retailers serve their customers. Beyond this, retailers are also experiencing difficulties in finding substitutions, delays and unexpected cancellations of their orders, inflexible supply contracts that crimp their ability to fill shelf space with alternatives, plus find themselves ranking lower on wholesaler and supplier priority lists than other retail channels.
Suppliers are also experiencing labor shortages and difficulty getting inputs, materials and ingredients to produce, manufacture and package their products. In addition, they are also experiencing transportation delays and a shortage of vehicles and truck drivers.
Labor is the most frequently mentioned underlying issue when it comes to supply chain problems. Shortages in skilled and unskilled labor are being felt in every business sector, and, again, the reasons behind this shortage are multifaceted. Government unemployment subsidies and benefits, child-care burdens, accelerated retirements, families transitioning from two incomes to one income, reduced immigration and competition from other businesses and retail channels are just a few of the explanations despite businesses offering competitive wages, salaries and benefits.
The pandemic spotlighted just how dire the truck driver shortage has become.
The lack of truck drivers is especially acute and a major factor behind the difficulty in moving and delivering supplies and products from ports to manufacturers to retailers to consumers. The trucking industry is 80,000 drivers short of those needed to meet increased demand for goods, and the gap could surpass 160,000 in 2030, according to the American Trucking Associations.
While the truck driver shortage, especially fuel haulers, has been a problem for quite some time, the pandemic spotlighted just how dire the situation has become. Again, an aging driver population nearing retirement, the stress of long hours and continuous runs during the pandemic, competition from other business channels and industries all play a role. In addition, many certification and training programs for new drivers were closed or delayed due to COVID-19. Despite investments in recruitment, generous salaries and benefits and signing bonuses, along with scholarships and funding for training, education and certification, filling the gap for truck drivers will continue to be a challenge.
While business groups have been raising many of these issues and concerns to Congress and the White House for some time, it really took the looming holiday season and the impact on consumers to get the attention of politicians and policymakers. Congressional committees have been holding numerous hearings on the supply chain challenges. Members of Congress are hosting roundtable discussions with stakeholders, including NACS, on finding solutions to these problems.
During the summer, the White House announced the creation of the White House Supply Chain Disruptions Task Force to bring together public and private sector stakeholders to examine the causes of the supply chain problems and devise solutions. The task force is mainly focused on transportation supply chain issues in the ports, rail and over-the-road sectors that arose because the pandemic disrupted the transportation and logistics nodes in the system. In October, the White House announced commitments from key groups, such as local governments, port authorities and labor unions in the port sector, to address bottlenecks at the Ports of Los Angeles and Long Beach to keep open and operating 24 hours, seven days a week. Other ports also have agreed to assist in helping to ease the bottleneck and accept rerouted cargo where feasible. Similar work and agreements have been forged with the railroad sector.
In addition, the Department of Commerce’s International Trade Administration has convened the Advisory Committee on Supply Chain Competitiveness (ACSCC), which brought together key people from the U.S. Commerce and Transportation departments, the Office of Trade Relations at Customs and Border Patrol and the National Security Council to explore improving the national freight infrastructure and freight policy to support the U.S. supply chain.
With the spotlight on the White House and Congress on supply chain issues, NACS continues to educate and advocate for the convenience and fuel retailing industry. From participating in stakeholder meetings and roundtable discussions, to advocating for and securing various regulatory waivers, such as hours of service or fuel waivers, or working on legislation, such as allowing for commercial truck driving licenses for 18- to-21-year-old drivers or working on retail channel discrimination, NACS is pursuing a multi-issue, multiprong, multilayered approach in helping the industry, including pursuing opportunities to join or help establish coalitions to address these issues before the Biden Administration and Congress.