With tight inventories projected to last well into 2022, the trucking industry as a whole should be doing more to combat current supply issues. While brought to the forefront by supply chain problems and labor shortages caused by the pandemic, it would appear that an imbalance between supply and demand predates COVID. As revealed by Wabash CEO Brent Yeagy on a recent earnings call, demand has outpaced their physical manufacturing capacity as far back as 2018. Demand for trailers is increasing each quarter and manufacturers are having difficulty keeping up with that demand, but are attempting to by offering overtime and weekend hours for employees.
Lacking stock is an issue within itself, however, having stock that is misplaced is equally as troubling for the trailer industry. Trailer manufacturers are showing that “trailers exist but not in the right place at the right time,” Shefali Kapadia writes. Using trailers as storage solutionss instead of assisting in the supply chain has caused a backlog of product to not be moved. In addition to product not moving, truck driver retention is also suffering and in the long haul, could cause increased supply chain issues if the trailers are available with no one to move them.
It is hard to predict when the shortage will end, though one thing is clear, it will not be anytime soon. With dozens of ships waiting outside ports to be offloaded, as well as strong domestic demand, the need for trucking capacity remains near all-time highs while the industry struggles with shortages in equipment and labor. With both spot and contract per mile rates peaking though, it is an excellent time to add capacity for those that are able to do so.