Why Supply Chain and Labor Shortages Are Affecting the US GDP
We are over a year and a half into the Covid-19 pandemic, and it has completely changed the way we all do business. The pandemic has caused disruptions in the supply chain, and extended unemployment benefits have resulted in a labor shortage. These two factors have had a major impact on our economy and affected the US GDP.
How Supply Chain Shortages are Affecting Business
The first problem in the supply chain is the lack of factory workers. The goods then need to get from factories to distribution centers, which means that truck drivers workers are critical. Salary increases in the trucking industry aim to entice truckers to get back to work. But this may result in higher shipping costs as carriers struggle to stay in business.
Warehouse workers move the product from the incoming trucks to the outgoing local delivery trucks. Those warehouse workers are in short supply, as are local delivery drivers. Additionally, retail sales associates and installers are not going back to work in the numbers companies need. Labor shortages are prevalent throughout the supply chain.
The Economy is Slowly Growing
It may not be as quickly as we all hoped, but the economy has grown since lockdown restrictions were removed. The Commerce Department reported the GDP had a growth of 6.5% in the second quarter, which is less than the 8.5% expected. Stimulus checks have done little to boost the economy as inflation is on the rise.
Reports suggest that economic growth will continue at a slow pace. Factory closures caused supply-chain issues at the beginning of the pandemic and will continue to take time to recover. As new covid variants continue to impact the population, it may be a while before things return to normal.
Changes in the Trucking Industry
Freightwaves.com is reporting that a recent increase in truck drivers’ salaries could pose a threat to trucking companies in the future. There is a desperate need for drivers. Therefore, carriers are increasing incentives to attract the best talent. The American Trucking Association’s chief economist is concerned that the rise in salaries could put trucking companies out of business in the event of an economic downturn.
How Will Businesses Be Affected?
Across the board, companies are trying to lure workers with higher salaries, but this may not be sustainable. A shortage of laborers is what led to the disruption in the supply chain. Inflation will be the price we all pay for these shortages.
Businesses face much higher demand for goods and services, with a significantly less labor force than needed. There is growing uncertainty about whether or not companies have the ability to pass higher costs on to their consumers. Companies are offering increased wages and benefits but are still unable to fill all of their job openings.
There is much doubt that raising wages higher will bring in good employees. A business might be successful in luring employees from another company by offering higher wages, but that does not benefit the economy as a whole. Consumers will bear the brunt of this issue with the cost of inflation. Inflation is necessary to cover the cost of workers’ higher wages.
Trifecta Transport Can Help Your Business
With all the economic uncertainty we are facing, you can count on Trifecta Transport to help navigate your logistics process. Our team at Trifecta is ready to streamline your logistics process and save you time and money. We’re here to help book, track, and manage your shipments, all while meeting your budgetary requirements. With specialized departments for each logistics sector, Trifecta works with customers one-on-one to choose the best shipping method based on cost and requirements.
Contract Trifecta Transport Today
We provide an all-in-one solution for our customers, providing communication, technology, and education to make informed logistics decisions. We manage the entire process of your shipment, eliminating the need for you to contact multiple carriers or have an in-house logistics team. Using cutting-edge technology, our skilled team makes it fast and easy to get an accurate and cost-effective quote. Whether you have a unique shipment or need time-critical shipping, Trifecta has you covered.