ROCKFORD (WREX) — Inflation and supply chain issues continue to wreak havoc in our region. It’s causing distribution and warehouse companies to use different strategies.
The slow down of product delivery at the beginning of the pandemic and the quick boom we are seeing now are causing roadblocks for truckers and warehouse staff.
Better times may be ahead but they’re deploying strategies to bridge the harsh domino effects in the mean time.
Rockford’s Meiborg Inc. has increased truck driver wages to get more people out on the road. Owner and CEO Zach Meiborg says a bigger problem is the cost of equipment.
“The price of tires has gone up, driver wages has gone up as well,” said Meiborg. “We have seen significant issues of backlogs on orders of new trucks and trailers. Many trucking companies right now are struggling to get new equipment.”
Meiborg says tractor-trailer prices have doubled.
“Two years ago, we were buying dry van trailers for just shy of $40,000. Today, if we’re lucky, we can get them in about a year and half’s time and they are running just shy of $80,0000.
The price hike is leaving companies to use worn-out vehicles instead of investing.
“We’ll have a tractor break down on the road with a backordered part. This causes substantial delays in the supply chain because that driver now is put up in a hotel room, waiting for a part that is on backorder and won’t be able to be delivered to the dealership to install in the tractor for two to three weeks,” said Meiborg.
Instead of waiting, Meiborg will spend money and time to swap cars and fix it in-house hoping to get freight to the customer sooner.
It’s not a sustainable solution so he’s instead shifting focus from trucking to warehousing.
“We have a ton of money chasing the same amount of goods and services, or even fewer, because less people are working now due to the extended unemployment benefits,” said Meiborg when explaining the reason to inflation.
Warehouse Supervisor Thad Gomez says the pandemic has created shortages in staffing when people get sick or have to quarantine.
“Those cause shortages on the docks which put the drivers behind to leave; which puts them further behind because when they run into construction or other delays, like weather, they get further behind,” said Gomez.
Gomez now has a heavier work load. He says everything is connected and it gets hard to plan when obstacles get in the way.
“We had a storm a couple of weeks ago; I didn’t see trucks for two days and then they all rolled in. I have to figure out what to do with all that freight at one time,” said Gomez.
Meiborg reminds the community to thank truckers who are working against all odds.
“Nothing moves without trucks. They need people where we pick up, where we deliver and they need people in-between,” said Gomez.
Meiborg says shipping has gotten better and expects the free market to level itself out. He hopes red tape from government regulation doesn’t delay the process further.
Meiborg Inc. is expanding one of its Rockford warehouses by 150,000 square feet. This as more customers are storing product either as a safety net or while waiting for the rest of their goods.
