Supply chain bottlenecks are leading to higher labor and transportation costs, impacting small rural businesses

California’s governor has now signed an executive order after staying largely silent on the west coast port crisis.

The order primarily addresses land issues surrounding the ports, like trucking. It temporarily lifts restrictions on how much cargo trucks can carry, and it directs the labor agency to create partnerships to recruit more truckers.

Nearly every sector of the economy is feeling the pinch from those bottlenecks, including farmers, ranchers, and rural small businesses.

Labor and transportation costs are skyrocketing for small businesses trying to navigate the supply chain.

Christine Lantinen, owner of a candy and food gift company, says that she has increased worker salaries by 36 percent to try to fill the roughly 100 job openings she has, but she faces other rising expenses as well.

According to Lantinen, “In August of 2020 the cost to ship a standard 40 foot shipping container was approximately $4,300 dollars. By August of 2021 that figure had exploded to $30,000 dollars. Like our shortage of workers, this situation is also unsustainable from a business management standpoint. We need to see action to alleviate the bottlenecks, most caused by labor shortages.”

Workforce issues are also impacting the trucking industry.

“Every four or five years we’ve seen a port slowdown when demand is high. We’ve never seen anything like this, but really in every period of increased demand we’ve dealt with truck driver shortage,” Chris O’Brian, the Chief Commercial Officer for C.H. Robinson Logistics Firm, states. “So, if there’s one area that I would want the committee to focus on the most, it is the part of the supply chain crunch that has been the most enduring and problematic.”

O’Brian says that infrastructure investments are needed to improve port capacity.

“Compared to other world class ports, ours are backed up more right now, and we have less automation and less adequate communication programs that are poured. So, I would agree that there’s an opportunity to invest there as well,” he adds.

The White House recently announced a new agreement to shift the Port of Los Angeles to 24/7 operation and for major shippers to operate in off-hour to reduce the backlog, but it may not benefit industries dealing with material shortages.

“Having UPS and FedEx ramp up their delivery process doesn’t do a lot for the challenges that we have with lumber, labor, and things of this nature that are handicapping our industry, and creating a shortage of new houses, which has put stress on existing housing stock,” John Fowke with the National Home Builders’ Association explains.

He told the committee that they should focus on accelerating the certification process for skilled trade workers, like welders, truck drivers, and machinists.


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