Supply chain industry deals with challenge of labor shortages

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NASHVILLE, Tenn. (WKRN) — Supply chains across the country and in Middle Tennessee are facing many challenges when it comes to both rising prices and shipping delays.

One challenge in particular has been a lack of labor and experts said that could impact the upcoming holiday season.

“I’m very concerned. There’s a surge that usually happens during the holiday season. So your package delivery, retail folks, that’s when they do a lot of their supplemental hiring. And they need those folks just to handle the holiday purchases,” said Syracuse University Professor Patrick Penfield. “So if there’s any advice I’d give your viewers is this is to buy early for the holiday season because there will be a lack of availability and a lack of choices as the holiday season progresses.”

UPS is hiring 1,500 people in Nashville. USPS needs 200 mail handler assistants, and Amazon is aiming to hire for 6,600 new positions Tennessee.

“There’s some additional food prices that are increases that are going on because of lack of labor,” Penfield explained. “I do think prices will go up probably similar to what we’ve been seeing the past six months. So the big driver for food is meat. So your beef products have gone up 14%, your pork products have gone up 12%, your chicken has gone up 7% from last year.”

He said a lack of truck drivers is also a big problem since about 70% of goods moved in the U.S. are transported by trucks.

“I don’t think people realize how reliant we are on truck drivers, and we already had a truck driver shortage probably for the past 15 years. When COVID hit, a whole bunch of truck drivers retired. And then when things started to reopen, we found that we again, couldn’t find truck drivers. So this has really been kind of the big issue,” Penfield said. “When you don’t have truck drivers, it’s really difficult to get the stuff that you want. And again, that causes shortages and availability issues. And that’s some of the things that we’re seeing absolutely — other labor issues, supermarkets, retail change, package delivery, everybody is really struggling to find labor.”

He said the automotive industry has probably been one of the hardest hit by the pandemic with a projected loss of $110 billion in revenue this year.

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“When COVID first hit, the automotive industry cancel a whole bunch of chip orders. And so their philosophy is just in time making sure that they have inventory when they need it,” Penfield explained. “So what caught the automotive industry off guard was a really a sharp increase in demand about two or three months later, once they cancelled orders for the chips.”

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