Shipping costs have skyrocketed in the United States in 2018, a sign that an economy warming up after a recession might be starting to overheat.
Higher transportation costs are beginning to cause prices of anything that spends time on a truck to rise. Amazon just implemented a 20 percent hike for its Prime program that delivers items to customers in two days. General Mills said prices of some of its cereals and snacks are going up because of a rise in freight costs. Tyson Foods, a large meat seller, also recently announced they will increase prices, blaming higher shipping costs.
The trucking industry shows that an extraordinary labor shortage in one corner of the economy can spill out and affect the economy as a whole.
Why can drivers not be found?
The United States has had a truck driver shortage for years, but experts say it’s hitting a crisis level this year. Young Americans ignore the shortage because, though necessary for a growing economy, the job is not well respected and it requires time away from friends and family. Freight companies continue to incentivize with sign-on bonuses and substantial raises.
“It’s as bad as it’s ever been” to find drivers, said Bob Costello, chief economist at the American Trucking Associations. “Companies are doing everything they can to make drivers happy: increasing pay and getting them home more often, but that means they aren’t driving as many miles.”
America had a shortage of 50,000 truck drivers at the end of last year, Costello found, up from a shortage of 36,500 in 2016. He says “without a doubt” it’s going to be even higher this year.