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Saturday: So About Trucking
Jul. 3rd, 2021 01:34 pmMy regular readers know that I recently experienced a period of more than two weeks between garbage / recycling pickups.
OK STOP RIGHT HERE
Am I complaining about my garbage / recycling pickup? Do you see any complaining there? Reread it carefully! There is no complaining. I am _making a neutral observation_.
MOVING ON
While it is quite common for there to be weather related delays in garbage / recycling pickups, there was no weather to explain this recent disruption in service. Also, there were no holidays, another common cause of delay. I mostly mentioned the disruption because I was astonished with how the initial delay became a cancelation of one service (delay, delay, rescheduled to the following regular service day with absolutely no acknowledgement of the missed pick up).
AGAIN STOP
This is still not complaining. This is me expressing great surprise at a novel event (missed service date) and even greater surprise at a brazen presentation of the novel event by the responsible party. Brazen seems to mean bold and without shame. And let me just say, if you frame a cancelation as a reschedule, bold and without shame is about as neutral a description as you can find.
CONTINUING FURTHER
The service disruption was not local to me (talked about it with neighbors, observed the cans around town), to my town (saw list of other affected towns in the notice from the service provider, heard from affected people in other towns not adjacent to my town) or even to my state (found news coverage of ongoing related issues around the country, altho it is quite thin coverage). In fact, it is pretty clear that this is a Thing. And the Thing appears to be both a mechanic shortage and a driver shortage.
I then attempted to understand the scope and nature of the driver shortage (I figured I’d get to the mechanic thing second, and I haven’t gotten to it yet). Here is Planet Money on the topic of truck drivers back in May:
https://www.npr.org/sections/money/2021/05/25/999784202/is-there-really-a-truck-driver-shortage
Planet Money’s take on the situation could be roughly described as: if the employers paid drivers better, did not work them as many hours, and provided them with better places to sleep than in their cab, and better food than the crap sold at fast food places along the way, then turnover would not be nearly so bad. Planet Money is primarily going at this from the long haul perspective, and they are really Not Having It from the ATA, which is a trucking trade association.
I am sympathetic to Planet Money’s take on the situation, however, it seems to have limited relevance to trash / recycling pickup driver shortages.
I checked in at Calculated Risk, who has in the past covered statistics relating to trucking (notably, he sometimes covers LTL statistics, and often covers inbound / outbound statistics at the LA area ports). He appears to continue to cover financial institutions, general economic indicators in hospitality (restaurants, hotels, movie theaters, gas deliveries to the pump), housing indicators, and covid, but does not appear to be (currently) covering trucking. (Or rail or port traffic, for that matter — he used to cover some intermodal numbers, but I went back a couple weeks and didn’t see anything related to freight transport in any form.)
Bloomberg has some limited coverage of trucking woes, notably, Odd Lots got into it (I have not listened to that episode yet). Weisenthal is mostly getting at it from the Ha Ha No We Are Not Going to Fulfill Your Order Fuck You Too end of it (<— yes, THAT was not a neutral frame on my part):
https://www.bloomberg.com/news/articles/2021-06-30/the-two-charts-that-show-how-much-stress-is-on-the-trucking-system-right-now
“Yesterday on TV we talked to Craig again, and we honed in specifically on the rising number of incidences of trucking operators simply rejecting jobs from shippers with whom they had pre-existing relationships.”
Look, if the carriers were able to hire drivers _at all_, then they wouldn’t reject — they would raise the price. What we are looking at here is a straightforward lack of drivers. Will this resolve in the future? Sure! Planet Money is Not Wrong. ETA: I’ve listened to the Odd Lots episode. Rejection is just refusing _at the negotiated price from before_. From there, you go to spot markets, which is where you pay whatever it is that the seller wants. I guess if the shipper has a relationship with carriers, they can always reach out however they communicate more generally (phone, etc.) and hash out an ongoing new price that will work for both of them. Also, this is not, for long haul trucking, _just_ a driver problem. Carriers are unable to order new trucks because the manufacturers don’t have any now, won’t for maybe 9 months, and that’s if they will take your order at all. The used market has apparently very recently spiked up by 40%. So there are capacity problems in long haul; that’s not what is going on with Philly / South Jersey trash service, that’s definitely not what is going on locally with trash pickup. Also, the pipeline of new drivers had a year and a half of closure itself, because CDL schools apparently were subject to covid closure orders and were not treated as essential. Here is the link to the Odd Lots episode: https://www.bloomberg.com/news/articles/2021-06-21/the-trucking-episode-why-the-industry-is-such-a-mess
Craig Fuller is very interesting to listen to, because he comes from intergenerational truckers / trucking company / trucking adjacent, and so he has, as he puts it 42 years of watching these cycles. However, people who know me well know I have a whole lot of detailed and vehement opinions about people who, when confronted with all the evidence that they could possibly want that the world has changed, continue to assert that it hasn’t. The version on display here is primarily of the Let Me Distract and Obfuscate Things For You Variety. While Weisenthal and Alloway are really interested in how stuff moves around on trucks, Fuller’s definition of trucking is specifically and exclusively long-haul trucking. That’s fine, but that doesn’t actually help with any of their or my questions. Fuller also would like to not frame this as a driver shortage — from his perspective it is a capacity shortage (True! For long haul — there is a lack of trucks and people to drive them, versus the demand), but one should never work too hard to size up to demand, because it will boom and it will bust, and if you meet the demand of the boom, you will never get your costs under control in the bust and you will go under. Fuller has enough depth of history to recognize that this problem comes from the deregulation of the trucking industry. Weisenthal and Alloway want to know why shipping is so disrupted (specifically at the level of Trucks) and I want to know why there seems to be such a shortage of CDL drivers in general _everywhere_, and nothing about this podcast helped with that.
But I do want to make a little observation here. The pandemic sidelined a lot of doctors. There was nothing for them to do _as doctors_. There were no treatments. There was plenty of work for nurses, tho! And a lot of nurses took a look at what they were making and how their hospitals were treating them, and quit. Some of them went home to take care of kids and avoid the risk; a lot of them got jobs as travel nurses. And some of those nurses got brought right back in at a much higher pay rate and with much, much better minimum standard of treatment.
Nurses and truck drivers are two fields which require more than a high school diploma, but generally don’t necessarily require a four year degree, which reward relevant experience and relevant credentialing. That’s the fancy way of saying, if you are an LPN and you have credentials and experience which reflect your competence at caring for ventilator dependent patients, patients with *ostomy bags, mickey buttons, etc., you will get paid a bunch more than someone that just got a four year degree in nursing, and has not yet actually had a job yet. You will get paid a bunch more because (a) you will have work, basically all the time and (b) it will not be at the base rate for LPNs in your region. Similarly, if you have a CDL A and a long list of which types of vehicles you have driven over the past n years.
Nurses and truck drivers constitute a large number of workers in our economy. There are new entrants in these fields every year. The average age within the current workers in these job categories is Not Young. And there is high turnover. It _looks_ like a fully commodified field. However, even fully commodified fields can go through periods of extensive, disruptive mismatch between supply and demand, and while I can’t tell you precisely what’s going on right now or how long it will last, I will note that while I fully support Planet Money’s take (pay them better and treat them well, and you’ll be able to hire, no problem) as a policy, in the short run (next 2-10 quarters) that approach is guaranteed to send all the available workers to the people who treat them the best and pay them the most, and leave all the employers who are not paying / treating well to turn away business.
I do not support Planet Money going Ha Ha Ha screw you poor people in cities your trash is never going to be picked up again. I mean, that is just not cool. I know they didn’t think that was what they were doing, but I’ve been reading coverage of trash pickup issues in South Jersey / Philly area and it’s not pretty. I’m fine — we can drive our trash and recycling over to the town transfer station every week and a half to two weeks. We’ll save money and not lose hardly any time over it. Not so for everyone.
Will CDL trucking schools being open for a few quarters correct the problems on display? I’m not sure. Maybe? I’m going to keep poking at this, however, because I think something else is going on entirely. If this unregulated industry is really miserable to work in, and workers are limited (because CDL schools being closed for the pandemic and only recently reopened), then the workers are all going to the Best Paying and Most Pleasant Jobs. That’s why my last trash pickup has been rescheduled Again. They have the trucks to do my trash pickup; they don’t have drivers. So where did they go?
Sorry, I lied:Oh, one last comment, I swear: I think I now understand better why CSX wanted to buy PanAm — I think that _before_ long haul trucking rates made it uncompetitive to extend rail freight service in that direction. I think _now_ long haul trucking rates make it very competitive to extend freight service in that direction. I think the switch to electronic logging that resulted in extended transit time via truck also made rail more compelling if you have enough time sensitivity in the freight.
How electronic logging is changing the supply chain:
https://www.joc.com/trucking-logistics/why-us-trucking’s-electronic-logging-device-era-irreversible_20180813.html
CSX’s purchase of PanAm is rejected:
https://www.ttnews.com/articles/csx-plan-buy-pan-am-railways-rejected
But CSX also is buying a company that trucks chemicals, so they can supply end-to-end solutions:
https://www.ttnews.com/articles/csx-plan-buy-pan-am-railways-rejected
In the Odd Lots podcast, Weisenthal asked about maybe some venture capitalist could do a rollup, and Fuller was pretty negative on that. Nobody got into what CSX appears to be doing, which is buying up enough trucking capacity so they can provide end-to-end service reliably and predictably.
TT News has all kinds of fun things! Here is an article about shortages of tanker truck drivers, and how that could result in no gas at the pump in some places this summer:
https://www.ttnews.com/articles/tank-truck-driver-scarcity-could-result-spot-fuel-shortages
This has an actual smart person!
“Streblow said between 10% and 25% of tanker trucks are idled because of the driver shortage.
Wharton, N.J.-based Carbon Express is a liquid bulk carrier that transports fuel and other commodities. CEO Steve Rush told TT the driver shortage in the tanker industry is a very difficult challenge, and noted his company has raised driver pay numerous times recently to keep and attract drivers. Rush said his company pays drivers by the hour plus bonuses — instead of by mileage — and this has boosted their overall pay and kept his driver turnover rate in single digits. He said many of his drivers are making more than $95,000 a year.
“Pay them by the hour. It’s not what you pay, it’s how you pay,” Rush said. “The driver shortage is awful. The competition for drivers is intense. We know what’s going on.””
This is NOT a capacity problem! They have a tenth to a quarter of tanker trucks sitting there waiting. And the solution is to switch from mileage based pay to hourly pay. Bonuses should help them survive a hypothetical future downturn — easier to not pay a bonus than to reduce hourly rates. It’s working — his turnover rate is low.
OK STOP RIGHT HERE
Am I complaining about my garbage / recycling pickup? Do you see any complaining there? Reread it carefully! There is no complaining. I am _making a neutral observation_.
MOVING ON
While it is quite common for there to be weather related delays in garbage / recycling pickups, there was no weather to explain this recent disruption in service. Also, there were no holidays, another common cause of delay. I mostly mentioned the disruption because I was astonished with how the initial delay became a cancelation of one service (delay, delay, rescheduled to the following regular service day with absolutely no acknowledgement of the missed pick up).
AGAIN STOP
This is still not complaining. This is me expressing great surprise at a novel event (missed service date) and even greater surprise at a brazen presentation of the novel event by the responsible party. Brazen seems to mean bold and without shame. And let me just say, if you frame a cancelation as a reschedule, bold and without shame is about as neutral a description as you can find.
CONTINUING FURTHER
The service disruption was not local to me (talked about it with neighbors, observed the cans around town), to my town (saw list of other affected towns in the notice from the service provider, heard from affected people in other towns not adjacent to my town) or even to my state (found news coverage of ongoing related issues around the country, altho it is quite thin coverage). In fact, it is pretty clear that this is a Thing. And the Thing appears to be both a mechanic shortage and a driver shortage.
I then attempted to understand the scope and nature of the driver shortage (I figured I’d get to the mechanic thing second, and I haven’t gotten to it yet). Here is Planet Money on the topic of truck drivers back in May:
https://www.npr.org/sections/money/2021/05/25/999784202/is-there-really-a-truck-driver-shortage
Planet Money’s take on the situation could be roughly described as: if the employers paid drivers better, did not work them as many hours, and provided them with better places to sleep than in their cab, and better food than the crap sold at fast food places along the way, then turnover would not be nearly so bad. Planet Money is primarily going at this from the long haul perspective, and they are really Not Having It from the ATA, which is a trucking trade association.
I am sympathetic to Planet Money’s take on the situation, however, it seems to have limited relevance to trash / recycling pickup driver shortages.
I checked in at Calculated Risk, who has in the past covered statistics relating to trucking (notably, he sometimes covers LTL statistics, and often covers inbound / outbound statistics at the LA area ports). He appears to continue to cover financial institutions, general economic indicators in hospitality (restaurants, hotels, movie theaters, gas deliveries to the pump), housing indicators, and covid, but does not appear to be (currently) covering trucking. (Or rail or port traffic, for that matter — he used to cover some intermodal numbers, but I went back a couple weeks and didn’t see anything related to freight transport in any form.)
Bloomberg has some limited coverage of trucking woes, notably, Odd Lots got into it (I have not listened to that episode yet). Weisenthal is mostly getting at it from the Ha Ha No We Are Not Going to Fulfill Your Order Fuck You Too end of it (<— yes, THAT was not a neutral frame on my part):
https://www.bloomberg.com/news/articles/2021-06-30/the-two-charts-that-show-how-much-stress-is-on-the-trucking-system-right-now
“Yesterday on TV we talked to Craig again, and we honed in specifically on the rising number of incidences of trucking operators simply rejecting jobs from shippers with whom they had pre-existing relationships.”
Craig Fuller is very interesting to listen to, because he comes from intergenerational truckers / trucking company / trucking adjacent, and so he has, as he puts it 42 years of watching these cycles. However, people who know me well know I have a whole lot of detailed and vehement opinions about people who, when confronted with all the evidence that they could possibly want that the world has changed, continue to assert that it hasn’t. The version on display here is primarily of the Let Me Distract and Obfuscate Things For You Variety. While Weisenthal and Alloway are really interested in how stuff moves around on trucks, Fuller’s definition of trucking is specifically and exclusively long-haul trucking. That’s fine, but that doesn’t actually help with any of their or my questions. Fuller also would like to not frame this as a driver shortage — from his perspective it is a capacity shortage (True! For long haul — there is a lack of trucks and people to drive them, versus the demand), but one should never work too hard to size up to demand, because it will boom and it will bust, and if you meet the demand of the boom, you will never get your costs under control in the bust and you will go under. Fuller has enough depth of history to recognize that this problem comes from the deregulation of the trucking industry. Weisenthal and Alloway want to know why shipping is so disrupted (specifically at the level of Trucks) and I want to know why there seems to be such a shortage of CDL drivers in general _everywhere_, and nothing about this podcast helped with that.
But I do want to make a little observation here. The pandemic sidelined a lot of doctors. There was nothing for them to do _as doctors_. There were no treatments. There was plenty of work for nurses, tho! And a lot of nurses took a look at what they were making and how their hospitals were treating them, and quit. Some of them went home to take care of kids and avoid the risk; a lot of them got jobs as travel nurses. And some of those nurses got brought right back in at a much higher pay rate and with much, much better minimum standard of treatment.
Nurses and truck drivers are two fields which require more than a high school diploma, but generally don’t necessarily require a four year degree, which reward relevant experience and relevant credentialing. That’s the fancy way of saying, if you are an LPN and you have credentials and experience which reflect your competence at caring for ventilator dependent patients, patients with *ostomy bags, mickey buttons, etc., you will get paid a bunch more than someone that just got a four year degree in nursing, and has not yet actually had a job yet. You will get paid a bunch more because (a) you will have work, basically all the time and (b) it will not be at the base rate for LPNs in your region. Similarly, if you have a CDL A and a long list of which types of vehicles you have driven over the past n years.
Nurses and truck drivers constitute a large number of workers in our economy. There are new entrants in these fields every year. The average age within the current workers in these job categories is Not Young. And there is high turnover. It _looks_ like a fully commodified field. However, even fully commodified fields can go through periods of extensive, disruptive mismatch between supply and demand, and while I can’t tell you precisely what’s going on right now or how long it will last, I will note that while I fully support Planet Money’s take (pay them better and treat them well, and you’ll be able to hire, no problem) as a policy, in the short run (next 2-10 quarters) that approach is guaranteed to send all the available workers to the people who treat them the best and pay them the most, and leave all the employers who are not paying / treating well to turn away business.
I do not support Planet Money going Ha Ha Ha screw you poor people in cities your trash is never going to be picked up again. I mean, that is just not cool. I know they didn’t think that was what they were doing, but I’ve been reading coverage of trash pickup issues in South Jersey / Philly area and it’s not pretty. I’m fine — we can drive our trash and recycling over to the town transfer station every week and a half to two weeks. We’ll save money and not lose hardly any time over it. Not so for everyone.
Will CDL trucking schools being open for a few quarters correct the problems on display? I’m not sure. Maybe? I’m going to keep poking at this, however, because I think something else is going on entirely. If this unregulated industry is really miserable to work in, and workers are limited (because CDL schools being closed for the pandemic and only recently reopened), then the workers are all going to the Best Paying and Most Pleasant Jobs. That’s why my last trash pickup has been rescheduled Again. They have the trucks to do my trash pickup; they don’t have drivers. So where did they go?
Sorry, I lied:
How electronic logging is changing the supply chain:
https://www.joc.com/trucking-logistics/why-us-trucking’s-electronic-logging-device-era-irreversible_20180813.html
CSX’s purchase of PanAm is rejected:
https://www.ttnews.com/articles/csx-plan-buy-pan-am-railways-rejected
But CSX also is buying a company that trucks chemicals, so they can supply end-to-end solutions:
https://www.ttnews.com/articles/csx-plan-buy-pan-am-railways-rejected
In the Odd Lots podcast, Weisenthal asked about maybe some venture capitalist could do a rollup, and Fuller was pretty negative on that. Nobody got into what CSX appears to be doing, which is buying up enough trucking capacity so they can provide end-to-end service reliably and predictably.
TT News has all kinds of fun things! Here is an article about shortages of tanker truck drivers, and how that could result in no gas at the pump in some places this summer:
https://www.ttnews.com/articles/tank-truck-driver-scarcity-could-result-spot-fuel-shortages
This has an actual smart person!
“Streblow said between 10% and 25% of tanker trucks are idled because of the driver shortage.
Wharton, N.J.-based Carbon Express is a liquid bulk carrier that transports fuel and other commodities. CEO Steve Rush told TT the driver shortage in the tanker industry is a very difficult challenge, and noted his company has raised driver pay numerous times recently to keep and attract drivers. Rush said his company pays drivers by the hour plus bonuses — instead of by mileage — and this has boosted their overall pay and kept his driver turnover rate in single digits. He said many of his drivers are making more than $95,000 a year.
“Pay them by the hour. It’s not what you pay, it’s how you pay,” Rush said. “The driver shortage is awful. The competition for drivers is intense. We know what’s going on.””
This is NOT a capacity problem! They have a tenth to a quarter of tanker trucks sitting there waiting. And the solution is to switch from mileage based pay to hourly pay. Bonuses should help them survive a hypothetical future downturn — easier to not pay a bonus than to reduce hourly rates. It’s working — his turnover rate is low.