This article suggests that the trucking industry may soon face a serious driver shortage…that although capacity to handle increased freight may appear to be there based on the number of trucks available, it isn’t really, because there is no one to drive them. Some laid-off drivers have certainly gone on to doing other things, and federal regulations for the qualifications of commercial drivers have become more stringent.
This is interesting to me as a railroad investor since it suggests an additional factor helping to move long-haul freight from road to rail. More generally, though, it points to limitations in the accuracy of capacity estimates for the overall economy. When economists look at the available capacity of the trucking industry, as part of their capacity estimates for the overall economy, I doubt that they are looking at the impact of prospective driver shortages. This kind of thing matters, because these capacity estimates are used to project the potential for future economy-wide price increases.
To manufacture and distribute any product, capacity has to be available in all elements of its supply chain…all the component parts manufacturers, all the raw materials suppliers that feed those parts manufacturers, and all the transportation links that interconnect the various parts of the process. It seems unlikely that the economic capacity estimates reflect this and-gate-like characteristic of actual manufacturing and distribution…it’s hard to see how they could, without an incredibly detailed model of the entire economy and the detailed manufacturing and logistics strategies of thousands of companies.
The above reasoning leads me to think that in any serious recovery we would likely run into output restrictions more quickly than most economists tend to believe.
Link via Railex, a very interesting company to provides west-coast-to-east-coast rail transportation for fruits and vegetables via unit trains.