This article has great graphs of vessel speed over the last months. It’s easy to see when ships are speeding up and slowing down. The speeds correlate with the spot price of shipping.
Speeding up causes more fuel to be burned, which adds to expenses. It also generates more pollution. Slowing down has been a tactic over past years to reduce pollution generated by ships.
But the long waiting time in ports these days has thrown calculations out of kilter. Now ships need to speed up to keep to their schedules.
Greg Miller, Senior Editor Sunday, November 7, 2021
The author of this piece contends that a UK tax law called IR35 is responsible for at least part of the driver shortage.
In the past, UK drivers were allowed to choose whether to be classified as contractors or employees. But with the change in April of 2021, employers now must decide whether drivers they use are contractors or employees.
According to the author, since April, many trucking firms have chosen to classify the drivers they hire as employees, due to the tax law. This has resulted in lower take-home pay for drivers. Naturally, drivers are upset about that. They can easily decide to quit driving and choose another form of work.
I don’t know whether there is statistical evidence for this phenomenon in the UK.
In the US, drivers themselves choose how they are classified. And they can be chosen to drive by any firm. Some firms, through union arrangements, or by choice, may decide not to hire contractors. However, a firm may also hire a mix of employees and contractors. In the US, employers are required to pay benefits, which include health insurance, unemployment insurance, and other services. According to the ATRI white paper An Analysis of the Operational Costs of Trucking: 2020 Update, benefits represent 10% of total average marginal cost, and wages represent 32%. This is a large amount.
But they do not need to pay those benefits to contractors. In the US, rates received by driver contractors are piece rates, and often the drivers come out worse than they would as employees, because they must buy their own benefits.
Also, contractor drivers must pay the costs of their vehicle, including fuel costs and lease payments. According to the ATRI study, in 2019, fuel costs were 24% of total average marginal cost and lease payments were 16%. These costs would be assumed by trucking firms hiring employees rather than contractors.
But in the US a major concern for drivers are the specific requirements associated with loads, such as picking up and returning chassis and containers, a shortage of parking to meet hours-of-service rules, and delays loading and unloading at warehouses and port terminals. These working conditions can be changed at will by trucking firms, on a trip-by-trip basis, and cause loss of income and waste of time for drivers.
I believe that in the US, this ‘supply chain adaptation’ is making many drivers look for other work. It’s hard for a contractor to avoid these work conditions, and employees, though they may be compensated for some of the time, may find it unsatisfactory for lifestyle reasons. They’d be very tempted to try some other line of work. Anecdotally, construction work is an important alternative.
While the contractor-employee distinction is equally important in both countries, the reasons offered seem to be different. Unions in the US trumpet the value of making drivers unionized employees, and it often does result in greater benefits for drivers, as well as the right to grievance arbitration. But it also means the driver does not get to choose which load to accept. Drivers choose to be contractors because they can choose who they work for and which load they take, in an atmosphere of changing and disadvantageous handling requirements that are often imposed. Regularize that, and drivers would be happier to work.
The Port of Long Beach has made a deal with a Utah site to transfer containers there, to relieve the congestion at the Long Beach terminal yards.
Moving containers by rail to Utah will clear space at the port and allow faster unloading there. The containers can then be picked up in Utah and forwarded to the points in the US.
This is a good strategy for the port. Many European ports, such as Rotterdam, Hamburg, and Antwerp, have done the same thing. In Europe, the containers tend to be moved by river barge or truck, but in the US, rail is the natural transportation mode to use.
It’s an idea that has been suggested years ago for the large ports on the West Coast US, but it took a crisis for it to happen.
I thought that long ago the ports would make such agreements with the Centerpoint complex in the Chicago area. Much of the container cargo moves to the Chicago area, for distribution to the rest of the United States. 8 years ago, Centerpoint had empty space available. Now it is completely built out, according to my informants.
Below the articles, I’ve provided my reference to our article of 2014, which suggested forging alliances with the Chicago warehouses.
Clott, Christopher B. and Bruce C. Hartman. (2014). “Supply Chain Integration, Landside Operations and Port Accessibility in Metropolitan Chicago”. Journal of Transportation Geography (51) 131-139. DOI: 10.1016/j.jtrangeo.2015.12.005
Supply Chain and Logistics 