Bearing in mind what I said about our increasingly tangled, overwhelmed logistics chain earlier this morning . . . I'm sure you've heard of the Texas transportation company that's paying its commercial drivers up to $14,000 per week. That applies to owner/operators, as far as I know (i.e. drivers who have their own trucks, and hire out themselves and their vehicles to trucking companies), rather than drivers operating the company's trucks, but it's still an immensely high rate compared to even a few months ago.
It's yet another sign of the warped, twisted logistics and supply chain we're currently experiencing. Consider:
- That trucking company isn't paying those inflated figures out of its own pocket. It's charging them to its customers in the form of higher transport rates - and they're obviously willing to pay them.
- If the supply situation is so bad that customers are willing to pay such high rates, it's a sign of how desperate things are becoming. Under normal circumstances, no business could afford to pay that high for truck drivers. Now, it's simply the going rate to be sure of quality, on-time service.
- Owner/operators are jumping at the chance to earn that high, because if it lasts for just a few years, they'll be able to retire and never work again. Who's going to take their place when they do?
Now consider those rates in the light of inflation. If a vendor has to pay five to ten times as much to get his goods to his warehouse(s) and store(s), you can be sure he'll pass on that increased cost to his customers in the form of higher prices. Without a single physical component having gone up in price, the cost of the product as a whole has just jumped significantly. I'd love to know what proportion of our inflation rate is attributable to transport, shipping and logistics costs. I suspect it's a lot more than usual.
Meanwhile, I can only repeat what I said a few hours ago: buy what you need, right now, and don't quibble about settling for substitutes if you have to. Make sure you're prepared for a national logistics crisis. Our supply chain is so close to overwhelmed that I fully expect a major breakdown within the next one to two months - certainly by Christmas.