Many are complaining this week – mostly the typically anti-business leftists, who can never resist a chance, legitimate or not, to attack the private sector – because some presents weren’t delivered by Christmas. Some are even calling for class-action suits, perhaps because they think that this certain type of predatory lawyer needs a stimulus program.
Now, it should be obvious that there’s no conspiracy by the private sector to sadden spouses and children or to defraud businesses. A lot of orders were placed at the last minute, more than the transportation network could handle. We could leave it at that.
But as long as some leftists are indeed trying to make it a political issue, let’s consider the real, legitimate political facts behind some of the various components to this issue, shall we?
Drivers and Other Personnel Shortfalls
As Christmas approached, and it became evident that carriers’ projections had been low – so there would be much more product to deliver than some of the carriers had staffed for – the carriers were limited in how many people they could put on overtime. Most drivers and loading/unloading personnel always put in a good deal of overtime in December, and most would have been willing to put in even more overtime than planned in those last couple of days, but union work rules and federal Hours of Service regulations banned it.
After all, you can’t just hire new people for two or three days. You can hire seasonal employees for four to six weeks, as the retail industry does, but not for the last three days before Christmas. These are jobs that often require licenses, bonds, hazmat training, and experience in driving trucks, in operating forklifts, in processing manifests and bills of lading, in designing stowage plans to keep dangerous cargo separate… at the busiest time of the year. Any additional hours you add simply MUST be with experienced staff doing overtime. This makes it a severe challenge.
Now, if carriers’ and their employees’ hands are tied, by federally-enforced (Surface Transportation Board, Department of Labor, etc.) union contracts and federally-mandated Hours of Service Rules (Department of Transportation), you simply can’t blame the carriers. They were willing, but federal government rules held them back. To the extent that this issue is anybody’s fault, it’s easy to see whose fault it was.
The Limits of Equipment
The domestic transportation industry is incredibly efficient. There are firms that specialize in large shipments of truckload size (roughly 7.5 feet by 7.5 feet by 40 to 53 feet in length). There are other firms that specialize in smaller shipments (roughly a few boxes to a few pallets at a time) that get consolidated together to share trucks. And there are other firms that specialize in still smaller shipments, of courier pouches, or just a small box or two each.
These three groups of businesses, known as FTL, LTL, and Small Package, make up thousands of companies from coast to coast, using air, road, and rail in the most efficient way possible, as they meet the needs of both business and personal customers, year in and year out, at incredibly low prices.
There was a time when this sector wasn’t that efficient, when trucks, trains and planes tended to be a third empty, or even half empty, but no more. Modern commerce, along with modern transportation management software, have enabled these carriers to optimize their “equipment” – the industry’s term for their trucks, trains, and planes – much as containerization enabled the international oceanfreight industry to optimize theirs.
The invisible hand of the free market has enabled our transportation industry to plan their equipment needs appropriately. Carriers now have the right number of trucks, planes, and boxcars for their typical needs throughout the year; they are able to deliver a package cross-country – for just a few dollars! – due to this wonderful efficiency, because for eleven months of the year, their business averages out to be reasonably predictable.
December changes things, however. All of a sudden, from the day after Thanksgiving onward, the transportation business is jolted by a huge spike in home deliveries, which are far more labor-intensive than typical deliveries. They’re not complaining; business is business, and they’ve adjusted to manage it, but every year, as online ordering grows proportionately, the final weeks before Christmas become more and more of a challenge.
Remember, these carriers only have so many planes, and each plane only has so much room. As December 25, approaches, virtually all of them are full, every year.
Every UPS and FedEx cargo flight in the last week was full; they couldn't take any more cargo. It's like jamming your car full of stuff when you're moving, so there's only room for the driver; there’s no room to fit anything else, so you need to make another trip... The same goes for most of the trucks, in most of the densely populated trade lanes, wherever there were issues in those final pre-Christmas days.
Now, if the carriers had more and bigger planes, and more 53' trucks instead of mostly 20' trucks, as well as more people, the same companies could have moved more cargo. But they have the number and sizes of vehicles that they need for the amount of business they have all year long.
If we had a growth economy, they WOULD have more and bigger equipment, but we're still stuck in a seven-year recession that started when the Democrats took over after the 2006 elections. This flat-lined economy has flattened the transportation industry just like it's flattened the rest of the country. As our population increases, the number of transportation companies has shrunken, and the national driver shortage has only worsened.
In a boom economy, there would be more year-round commerce, justifying more transportation companies, more equipment, more people to man those deliveries. But this isn’t a boom economy. And whose fault is that?
Only ___ Shopping Days ‘Til Christmas!
Some people are wonderful at shopping all year long; these rare, organized souls present no strain on the transportation sector whatsoever. Others begin on Black Friday, or Cyber Monday, and do their shipping in early December; these modern shoppers have driven the transportation industry’s December planning for a decade or more, and the transportation sector handles their business, too, without strain.
And there have always been people who shop at the last minute, either because they must, or because they can… often, nowadays, because they have to work two or three part time jobs to pay the bills and be able to buy gifts.
Lots of today’s last-minute shoppers used to be in those earlier two groups, but they now have to wait for the final sales so they can afford to shop… because just as the macro economy has changed, so too have their personal micro economies changed. The person who was happy to buy at full price or 25% off a decade ago is now waiting for a 50% off sale, or better, before he or she can afford to buy for everyone on the list.
Just as the Left is telling us that part time work, high fuel prices, and previously unimaginable levels of unemployment are “the new normal,” so too is last-minute shopping, as people wait for the last paycheck and the best deals before they can buy presents.
Did they think that all these years of unemployment, low raises, and huge inflation in food, gasoline, and other necessities wouldn’t have an effect? Did they think – when people stop doing better economically every year, and instead, do worse and worse – as taxes rise, utilities skyrocket, and career advancement plans are frustrated by an obamacare-saddled economy – that these people wouldn’t be more desperate for deals than they used to be?
Of course people wait more for sales, and therefore do more last minute shopping, needing rush delivery at the end more than ever before, creating a growing burden on a transportation sector that’s not growing at the same pace, because the rest of their clientele – the American business sector, year-round – has remained so sluggish for so long.
Economic contraction, inflation, energy shortages, hiring freezes. Again, now, whose fault is all this?
In Conclusion…
I do feel sorry for people whose presents are late. A couple of mine (luckily just a couple) didn't arrive before Christmas either, though I was impressed at how fast a couple DID arrive (because I honestly admit that I did order several things too late).
My basic point is this: don't blame the transportation folks, because they do work hard, and they do a great job, considering the fact that some 80-plus percent of their personal deliveries all happen in the last two weeks of the year.
You can’t make an employee work more hours than the law allows him to work, even if both he and his employer are willing. You can’t fit more cargo in a truck or plane than there’s room for, when the company has all the equipment space that the rest of the year’s volume supports. You can’t blame people for shopping late when their economic condition mandates that they look for that last sale and wait for that last paycheck.
But DO blame the people responsible for these conditions. Do blame the rotten management by Washington, D.C., the taxes and regulations that have created this miserable environment. And feel free to share that blame with Springfield, Sacramento, Albany, and all other such meeting places for miscreants and fools.
Destructive legislation and strangling regulations do have consequences. And sometimes, those consequences hit home.
Most of these miscreants' countless other mistakes cause much more serious destruction than the late delivery of some online purchases. Be glad that in this case, it was just a gift or two being a couple days late, perhaps causing people to reflect a little bit more on the real meaning of Christmas, from which the gift culture is mostly just a distraction anyway.
Copyright 2013 John F. Di Leo
John F. Di Leo is a Chicago-based Customs broker and international trade compliance trainer. His columns appear regularly in Illinois Review.
Permission is hereby granted to forward freely, provided it is uncut and the byline and IR URL remain included. Follow John F. Di Leo on Facebook or LinkedIn, or on Twitter at @johnfdileo.
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