The ‘Rest Of The Story’ On Supply Chain Woes

We have seen the headlines of supply chain problems, of an unprecedented number of ships offshore of the ports of Los Angeles and Long Beach for days waiting to unload cargo because there are not enough trucks and drivers to pick up the cargo and take it to its destination.  Many of us have personally experienced the effects of some of these issues, and manufacturers are already telling people to shop early for Christmas because of expected shortages of certain items.

As it turns out, a labor shortage that means trucking companies cannot get enough drivers is only part of the problem. A large contributing factors are laws in California that have gone into effect in the last year or so, that are only now showing up because of the decreased demand last year during covid.

The is a growing shortage of drivers, in part driven by a new law that was pushed by labor unions, that bans owner-operators, or truckers that own their own truck and are hired by companies who want to use them and their trucks to transport cargo.  That law affects roughly 70,000 truck-drivers in California who must decide either to work out an arrangement with some company to become an employee or to move outside of the state.

Additionally, the State of California has new environmental rules affecting vehicles that have thrown much of the trucking industry into confusion over investing in equipment.

California limits trucks and engines prior to 2011 in an effort to eliminate inefficient models.  The state has also mandated vehicles be all electric after 2035.  Since long-haul diesel trucks are a long term investment, often in use for over 10 years, this means that a number of trucks have been taken out of service since they are older than 2011.  Additionally, truckers who want to invest in new equipment have to make sure it will be compliant in 2035— less than 14 years from now, but no electric trucks are commercially available for them to buy yet.

So there is the rest of the picture about the shipping backups and delays, that is usually left out.

There is a saying that “Timing is everything” and California has seemed to pick a time when there are already issues coming out of covid, to implement these laws that just make the situation worse for the supply chain in the rest of the country.

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