One of the factors affecting consumer prices is a persistent labor shortage across all transportation modes. A December report by global consultant McKinsey noted, “The transportation and logistics sector has been particularly hard hit, with the impact of worker-retention challenges and rising labor costs being felt across the entire value chain.”
The stresses of the COVID-19 lockdowns and subsequent economic recovery exacerbated issues that were already present in logistics industries as baby boomers retired and recruitment stalled. Trucking companies desperate for drivers are paying large hiring bonuses, up to $10,000 in some cases.
Railroads facing persistent shipper complaints about delays and service shortfalls have blamed them on worker shortages as well. Just recently, CF Industries, a major shipper of fertilizer, announced that it was ordered by Union Pacific to cut its fertilizer shipments by 2 percent—at the height of planting season, and on top of fertilizer shortages from Russia’s war in Ukraine. Jim Foote, CEO of railroad CSX, recently told investors, “We are not short of locomotives, we are not short of any physical infrastructure in order to be able to perform. There is one thing and one thing only that we are short of that is hampering us from doing the job that we want to do and to get back to the service levels where we were in 2019. … We need more people in the engineer and conductor ranks.”
The towing and barge industry has done better about meeting customers’ goals, but it, too, is facing worker recruitment issues as the boomer generation continues to retire and demand for barge services ramps up.
That’s why a recent bill introduced in Congress by Rep. Sylvia Garcia (D-Texas) is such welcome news—if it is passed and funded. The bill would add $200 million to the America Competes Act, which would go to the Maritime Administration (MarAd). It would be made available as grants of up to $20 million to the 27 Maritime Centers of Excellence that were designated by MarAd to assist the maritime industry in gaining and sustaining a well-trained labor force while enhancing diversity and inclusion in the industry.
This level of funding could be crucial to educational programs that want to expand their services to attract and train young people who are interested in a maritime career. In many ways, there has never been a better time for motivated young people to confidently begin building a secure, stable, well-paying career on the rivers, or a better time for our industry to tell its story to them. Demand for goods and the logistics to move them is growing worldwide. Let your representative in Congress know that Rep. Garcia’s bill would go a long way toward addressing vital transportation issues that affect all Americans.