Trucker pay may need to rise to resolve supply chain woes, U.S. regulator says

FILE PHOTO: Shipping containers are unloaded from ships at a container terminal at the port of Oakland, California, U.S., October 28, 2021. REUTERS/Carlos Barria

WASHINGTON (Reuters) – Wages for truckers and warehouse workers may need to rise to resolve shipping backups, the chairman of the U.S. Federal Maritime Commission, which oversees ocean transportation, said on Tuesday.

In an open meeting, U.S. Federal Maritime Commission Chairman Daniel Maffei said a lack of warehouse space and truckers to move products seemed to be at least part of the problem, where vessels laden with consumer goods are stuck outside ports because there is no space to dock and unload.

“We do see more employment there which is a good thing, but I suspect compared to the demand, there’s not enough,” he said. “I just don’t see how we can get sufficient workers in those sectors unless wages creep up a bit.”

Retailers have struggled to bring products into the United States ahead of the peak shopping season due to shipping logjams, shuttered factories in parts of Asia and a scarcity of raw materials in recent months.

Kristen Monaco, director of the FMC’s Bureau of Trade Analysis, said truck drivers are generally not paid for the time they spend waiting, and long waits hurt efficiency.

“Think of it as sort of reducing your labor supply by having the same number of people there because you’re just not making use of their time. And that is an inefficiency. And it’s not currently paid, which means there’s very little economic incentive to fix that inefficiency,” she said.

Grace Wang, director of competition analysis for the FMC, showed data that indicated a sharp drop in agricultural exports amid the shipping backups, including a 38% drop in cotton exports between July 2019 and July 2021. Maffei called it “concerning.”

Source: Read Full Article