Long term, truckers in California are not investing in new trucks because California has a law that makes them illegal in 2035.


Heavy duty diesel trucks illegal in CA starting in 2035 - there isn't a truck bought today that would be in operations 14 years from now by someone who can buy new. That's a red herring.

AB5 is a problem for sure but trucking wasn't the target of the law. Originally brought up to go after Uber/Lyft/DoorDash and other so called gig jobs. It currently has an injunction against it while the courts sort some things out. Much of the industry is hoping SCOTUS rules that F4A applies and CA can't make such a rule when it comes to this.

About 2% of all truck drivers are union. Majority of those reside in the LTL sector. LTL isn't the one servicing the ports. Union in trucking lost a ton of sway with deregulation - something Jimmy Carter signed into law - a Dem.

Jason Hilsenbeck has a great post on it -

Oct 15, 2021: Demand for drayage trucking has eased on all of the East Coast. Note taper downward for NY/NJ. See on Savannah the slight bump up earlier this month? That is from the vessels that were held up in NY/NJ finally making their way down the coast and arriving in Savannah. Now SAV is getting caught up. There are plenty of 1-2 driver draymen in CHS,SAV looking for work. Click on "PO" for power to see what I mean.

Even Chicago has eased. Not as many 20/40’s are moving inland like there were three months ago. There are draymen in Chicago posting today having power for next week (for 20/40' dray). Houston is still tight, big draymen are booked several days out, but it feels like by end of next week the small 1-2 driver will be looking for next day work again.

However Los Angeles/Long Beach has reached all-time high demand! The reason for this surge while rest of country is getting easier, is LA/LB is the fastest ocean transit time to get cargo into the U.S. from China. So two months ago if you are an importer trying to decide how to route cargo to make it in time holiday shopping, you know routing time to East coast isn't going to make no matter what, but routing to LA/LB you might have a chance, and if doesn't make it in time, you have the most warehouse capacity with inland OTR/IMDL for flexible distribution for the January post-holiday sales season.

LA/LB ports open 24/7? Doesn't matter if ports are open round the clock, what matters is how fast the port labor turn the drivers. It would be more effective for the terminal labor to not shut down for lunch and shift changes, and continue to process drivers as fast as possible throughout the normal hours. Imagine how much faster the drayage drivers would get processed if the terminal operator had to pay for the cost of the dray.

I remember years ago at conferences "bigger vessels, will terminals be able to handle increased volume?" and clearly the answer is 'no'. There simply is not enough space at the port and rail terminals. Terminals being open 24 hours doesn't mean there are lift operators or mechanics working in middle of the night. And if terminals are so full they stop accepting empty/loaded ingates, those are the much needed chassis they aren’t getting back.

Terminals aren’t expanded and driver processing is slow because storing containers inside the terminal generates profit. The railroads for the month of August made $12.4 million off charging storage penalties, just for Chicago.

Jason Miller is another bright guy - the "shortage" is compared to historically high volumes. The saying "don't build your church pews for Christmas and Easter - build for the average Sunday" applies.

There has been so much attention given to the number of containerships waiting to dock at US ports that it becomes easy to lose perspective about the current state of international supply chains. It is critical to keep in mind that the number of imports flowing into the USA is at levels unprecedented in recent times. As proof, below I’ve plotted the metric tons of waterborne containerized imports into the USA for all countries excluding Canada and Mexico. Data courtesy of the U.S. Census Bureau's USA Trade Online database. Thoughts:

•For the first 8 months of 2021, metric tonnage is up a staggering 16.9% from 2019 levels.

•Using imported TEU data for 2020 from the Port of Los Angeles (https://lnkd.in/eq6gBiYe), the average container into that port is loaded with 7.67 metric tons of imports. I'll assume this is representative nationally.

•Using this metric ton/container estimate, the USA has been importing an extra 319,000 containers per month in 2021 relative to 2019. That is a substantial amount of additional freight that must be handled, which backs up warehouses around the ports.

Implication: I think the discussion increasingly needs to turn to recognizing that the import system has shown quite a bit of resilience given record demand. Yes, it is taking longer to get product into the USA, but it is still coming in, and at record levels.

Can talk all you want about "American goods wouldn't be sitting on boats in port to be unloaded" - it's pandering. The volume is through the roof. Regardless of AB5 - there's a shortage of trucks/drivers/rail capacity to move it all. American goods are sitting on the docks in Tulsa, Reno, Ames, Cleveland etc. There aren't enough trucks to move them and having them sit in a boat or on a dock because we don't have the capacity to move massive increases in volume - that's a distinction without difference.

Look - reality is, even with all this activity, the inventory to sales ratio is still above 1. There's product available for sale - it's just not where the supply chain wants it. DC/FC staging is behind due to INLAND transportation issues. Pay attention to the Y axis - only moves 1.2-1.8



Fred I/S ratio

Me