Supply chain participants must work together to resolve challenges, retail exec says

All segments of the supply chain need to come together to improve its long-term challenges as consumer demand continues to exceed supply amid the COVID-19 pandemic, a retail industry executive said.

In a recent Transport Topics webinar, Jonathan Gold, vice president for supply chain and customs policy at the National Retail Foundation, discussed the global supply chain disruptions, holiday season, labor shortage and federal vaccine mandate.

“There’s a lot more stress this year because of the ongoing challenges with the pandemic and the ongoing challenges in the supply chain,” Gold said. “But I think retailers are trying to work their way through to ensure they have product on the store shelves. Even with the ongoing disruptions, we’re seeing, many retailers still feel confident about where we’re going to be at the end of the holiday season.”

Gold said COVID exposed the long-term challenges in the supply chain. And now’s the time to address the issues, he said.

“If we want to have a truly 21^st century global supply chain, we’ve got to address the fundamental issues that we’re facing right now, and recognize that the system as developed can’t handle the volume of product going in and out that we have right now,” he said. “It’s unclear when that volume’s going to subside, either import or export.”

The demand for goods is outpacing supply to manufacture them and to transport them. He said Asian countries are facing challenges with COVID, and foreign terminals have been shut down because of the pandemic. Meanwhile, China is struggling with rolling blackouts that are impacting the ability to meet capacity demand.

“Consumer demand has been so strong throughout the pandemic that it is just overwhelming the system as a whole,” Gold said. “It’s not just impacting foreign manufacturers. It’s impacting U.S. manufacturers relying on imported components and materials that they’re having a tough time getting.”

He said the supply chain needs better interconnectivity and visibility. He asked why plans are not being made for how products will move through the supply chain while a container ship makes the three-week journey to the United States. He also noted a shortage of containers, chassis and drivers.

“These are some of the key issues we’ve got to figure out and work on now because those are the core elements to moving the supply chain,” he said.

The trucking industry is short about 80,000 drivers, based on existing freight demand, according to trade group American Trucking Associations. Meanwhile, the retail sector has about 1 million unfilled positions, Gold said.

Gold, who noted that the retail sector accounts for about one in four U.S. jobs, said the federal COVID vaccine mandate could lead to more workers dropping out of the labor force. The mandate for employers with more than 100 employees is expected to be published Friday (Nov. 5) in the Federal Register. The compliance date will be Jan. 4 and requires workers of those employers to be vaccinated or complete weekly tests for COVID.

In a statement of opposition to the mandate, the Truckload Carriers Association noted the trucking industry was not exempted from the mandate “to the dismay of TCA and our partners across the transportation sector.

“TCA repeatedly called on the Administration to heed our warnings regarding this mandate’s impact on the already constrained supply chain, yet they chose to proceed with a disastrous mandate which will undoubtedly ensure the trucking industry loses a substantial number of drivers. These are the drivers the country is relying upon to deliver food, fuel and presents for the upcoming holiday season, yet our national leadership has decided these needs must go unmet.”

The association’s statement also showed its opposition isn’t political but “driven by the facts presented by our industry and our knowledge of the 24/7 efforts already being contributed by our diligent workforce.”

Companies, nonprofits and governors are working to file suit against the mandate, according to the statement.

“While we do not yet know whether these lawsuits will result in a delay or eventual overturning of the mandate, we are optimistic that they will ultimately be successful, and we will work to support these initiatives as much as we can.”

ATA REACTION
Trade group American Trucking Associations (ATA) said Friday (Nov. 5) that drivers in the trucking industry should be exempt from the COVID-19 vaccine mandate set to go into effect on Jan. 4.

“As we made clear in our comments to the Administration prior to the rule’s publication, drivers spend the vast majority of their workday alone in the cab and outside,” said Chris Spear, president and CEO of the ATA. “The rule published yesterday exempts employees who exclusively work outdoors or remotely and have minimal contact with others indoors, and all indications thus far from the Department of Labor suggest this exemption does apply to the commercial truck driver population.”

The ATA is completing its “due diligence to confirm that fact through official channels,” said Spear, noting that statements from Secretary of Labor Martin Walsh are “an enormous victory of our association and industry. Given the nationwide shortage of truck drivers, it is vital that our industry has the relief it needs to keep critical goods moving, including food, fuel, medicine and the vaccine itself.”

Spear also said the ATA is “weighing all options of recourse to ensure every segment of our industry’s workforce is shielded from the unintended consequences of this misguided mandate.” He added that the Occupational Safety and Health Administration is using its authority “unwisely, applying it across all industries at an arbitrary threshold of 100 employees that fails to factor in actual risks.”