Since 2019, world has been in the claws of (coronavirus) COVID-19 pandemic. The outbreak of this novel disease has severely disrupted global supply chains by adversely affecting demand and supply. Industries of all sizes and power were disrupted, along with supply chains. However, during this chaotic period, while supply chain experts were attempting to adapt to the market changes, they were capable of delivering vital medical supplies, food, and other essentials needed direly by people. Aside from the negative effects of the pandemic, it has brought many supply chain issues to light dealt by the trucking industry for decades. We will discuss pandemic’s positive and negative consequences and other global events, along with the possible implications for the supply chain management future. Moreover, due to the link between post-pandemic global supply chain and the US-China trade war, manufacturers are reconsidering their supply chains.
The pandemic significantly disrupted supply chain in almost every economic sector worldwide, from trade to education. Unsurprisingly, businesses were not ready for this pandemic, and as per a survey conducted by Ernst & Young LLP, 72% of companies were adversely affected by lockdown. Some industries came out as a winner, such as life sciences companies producing COVID-19 tests and vaccines, consumer products, such as toilet papers, and so on. However, some went out of business.
The trucking business was not spared by the pandemic, resulting in a shipping crisis. Many transportation companies had to lay off workers as the epidemic affected the economy. After a certain time, when businesses recovered from the pandemic, carriers were unable to meet demand due to the enormous volume of orders. Consequently, trucking companies became understaffed, with about 80,000 drivers shortage in 2021 as per American Trucking Association. The carriers didn’t only suffer from being understaffed but also, from skyrocketing prices, and health concerns owing to the impact of Covid-19. Nowadays, diesel prices doubled up compare to 2021 and already reached $6 per gallon. Brokers and manufacturers are unwilling to increase the rates and some people say the industry would face a recession if this continues. For instance, even though the expense of drivers increases, load rates remain the same. Consequently, drivers are not happy with the pay that they are taking home after long workdays and trucking companies’ profits remain unchanged.
Supply chain management is responsible for many elements of our everyday lives, and the trucking industry alone transports more than 70% of America's freight volume by weight throughout the country. However, the trucking industry's biggest difficulty is excessive turnover, which is followed by understaffing. In 2021, according to Jen Psaki, White House press secretary, around 50,000 commercial driver's licenses and learner's permits will be given per month. The data reveals that there is no scarcity of drivers in the sector. However, when new drivers hit the road and see the real work condition, many conclude that this job is not for them. Unfortunately, trucking companies address the issue by just hiring teenagers who are not well aware of the inequities. Therefore, the turnover rate will increase as high as 90%.
When the shipping crisis began two years ago, it sent shockwaves across the trucking industry, which had been dealing with a broken supply chain for decades. Todd Spencer, President of the Owner-Operator Independent Drivers Association, told CNN that there is no quick cure for the shipping crisis and supply chain challenges and that hiring more drivers will not solve the situation. OOIDA said that to address these challenges, drivers must be treated as essential workers and get paid adequately for excessive detention time, which is defined as waiting for more than two hours to be loaded or unloaded, and federal regulators should provide fair methods of compensation. Trucking businesses must offer stable positions for drivers; otherwise, no matter how many people they discover, they will leave if their current work is not reliable, stable, or secure. Transportation Secretary Pete Buttigieg coined the phrase "leaky bucket" to describe the problem. Addressing issues such as driver remuneration, excessive detention time, poor pay rates, and inadequate parking spaces would help to slow down turnover and enhance the supply chain process.
According to Statista, the trucking industry had gross freight sales of $732.3 billion in 2020, and these figures are rising every year. After the pandemic created long-lasting issues in the trucking industry, the Biden-Harris Administration launched a “Trucking Action Plan” on December 16, 2021. The first thing in the action plan was to take the steps to get the CDL smoothly, without delays. They released a 90-day challenge Registered Apprenticeship program that provides paid, on-the-job learning. They also launched a joint DOT-DOL Driving Good Jobs initiative to support drivers, identify drivers’ road-related problems, and investigate the pay rates. All these initiatives made a positive change in the industry; however, the issues remain not completely resolved.
The world is still dealing with the new variant of Covid-19, Omicron, it will take time for the supply chain to recover from the pandemic completely. Experts believe that in the next weeks, China's lockdowns will produce a supply chain problem on the west coast of the United States, adding to the country's four-decade-high inflation. Aforementioned paragraphs described the supply chain issues, especially in trucking industry. Apart from one series of issues, the US-China trade war also disrupted supply chain. According to a new Columbia Business School study, the trade war between the United States and China has resulted in increased global trade, a more diverse supply chain for the tariff-targeted products, and significant implications for the future of globalization.
The following conclusions are drawn after a thorough examination and review of numerous studies on the post-pandemic supply chain: The pandemic's economic crisis has exposed several vulnerabilities in supply systems and cast doubt on globalization. Prior to the pandemic, supply chain priorities were to reduce cost and incur the bottom line but they shifted to running the business smoothly. This disruption impacted the trucking industry the most. The supply and demand shortages could not be met even after the lockdowns were lifted. In addition, workers' uneasiness when they lost and recovered jobs exacerbated the problem. Because of the trucking industry's significant engagement in freight, this interruption had an impact on daily life. The economic significance of the trucking industry was acknowledged, as well as several steps were taken to improve it. Moreover, supply chain professionals should bear in mind that they must try their best to automate, to avoid relying on the factors that can be disrupted during events like COVID-19. They must arrange the sessions to improve the morale of drivers and benefit them with monetary benefits to motivate them to continue the job.
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