Less-than-Truckload Performance in October 2021
October 2021 - Transportation Market Report
Vaccine Mandate – what happens now?
Many experts claim the driver shortage is the #1 issue in the supply chain today. The current shortage stands at an estimated 80,000, up 31% from just 3 years ago. While many believe this number is understated, they all agree it will only continue to grow in coming years.
Besides the overall driver shortage, we all know the supply chain has also had many negative influences which have disrupted most modes of transportation over the past 18 months. We’ve seen, and are still dealing with, an unknown and unprecedented pandemic. We’ve seen major weather issues in terms of tropical storms, hurricanes, and major snowfalls in regions that are usually not affected. We’ve seen wildfires, mudslides, and don’t forget, absolute disarray at the ports.
While all these things have certainly provided major challenges, the announcement today by the Biden Administration may make those things look pale in comparison when talking supply chain. Earlier today, Biden Administration officials announced details surrounding the vaccine mandate which will directly affect all U.S. employers with over 100 employees. Employees will need to be fully vaccinated by January 4th or engage in weekly testing.
What happens to the supply chain now? Keep in mind, this will include large 3PL warehousing and consolidation companies as well so it’s not a one-dimensional impact as far as drivers in supply chain – it encompasses several levels. The ATA, American Trucking Association, along with several carriers, have been very vocal on what this will do to an already stressed supply chain and have adamantly asked for an extension. The details released did not mention any type of extension for trucking companies. Most TL carriers fall below the 100-employee threshold so the impact there will be less, but it will still be present in midsized and larger TL companies. The LTL space is completely different. All the National Carriers have more than 100 employees and so do most of the Regional Carriers. If warnings from motor carriers, which estimate approximately 50 percent of their truck drivers are unvaccinated, prove true, shippers could quickly see an increase in dropped shipments and delays in pickups and deliveries, and be forced to push more freight into the high-cost spot truckload market, where most carriers have far fewer than the 100 employees that would trigger the mandate (JOC.com). This mandate will also have a major impact on trucking companies in terms of dock workers and office staff who may not be vaccinated. Remember, the mandate specifically calls out all U.
• 36% of the estimated 50% unvaccinated drivers state they have no plans to get vaccinated. • Drivers may leave for smaller companies.
• Shippers with large volumes may have to rely on the spot market more.
• More disruptions and delays.
There will be much debate, lobbying, and legal action coming in the next few days and weeks. If an extension can’t be agreed upon, there will be much more disruption in the supply chain during the busiest months of the year and heading into 2022. Whether you are pro-vax or anti-vax, let’s all hope this gets sorted out in a logical manner.
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