Tuesday, February 26, 2013

A Shortage of Truckers Hampering the Supply Chain in Canada

In a recent report by the Conference Board of Canada it was stated that Canada is set to experience a shortage of 25,000 truckers by 2020.  This decline in the trucking industry is attributed to an aging workforce and the lack of new entrants from young people and immigrants.  In addition, the recent economic boom in Western Canada, due to increased drilling and mining, has already contributed large wage increases within the transportation sector.  These two factors "could hamper the Canadian supply chain and drive up prices on store shelves” acknowledged the Canadian Trucking Alliance.  

"The trucking industry moves 90% of all consumer products and food within Canada and 60% of trade with the U.S" (WSJ). As seen in class, the trucking industry is imperative to a supply chain to deliver goods that last mile.  No matter the mode of the transportation, be it water, air, or rail, ground transportation is necessary to deliver the goods from the port, airport, etc. to the final destination.  Therefore, any shortage of truckers will immediately effect the costs of transportation, as trucking is an essential cog in any intermodal alternative.  If the problem is not resolved, it will put Canadian manufacturers at disadvantage as their supply chain costs will rise even as efficiency decreases.  

This comes at an interesting time as global transportation networks have become increasingly gridlocked.  And if trucking costs continue to rise, it might force some companies to move to an intermodal design of transportation rather than depending solely on trucking.  This in turn would even apply more pressure to freight and air traffic.

As Canadian companies look to the future, and the decisions they must make in terms of supply chain management, for instance by focusing on energy conservation throughout the supply chain like in today's article, they first must remedy an institutionalized and long standing supply chain technique: trucking.  If trucking prices do rise, there will have to be an even greater focus on efficiency and space utilization to not ship "air".  

There have already been calls within Canada for the government to step in and solve the problem through various reforms.  As a public policy student, at what point, if any, do governments step in to protect national companies, in terms of their supply chain, beyond the typical trade restrictions and tariffs?  

Source: http://blogs.wsj.com/canadarealtime/2013/02/21/keep-on-trucking-not-if-canada-doesnt-hire-more-truckers/

1 comment:

  1. Interesting post. The lack of younger individuals entering the field of transportation management system is something more companies will have to consider in the upcoming years.


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