Weston LaBar, Cargomatic Head of Strategy joins Yahoo Finance to discuss how global supply chain issues are impacting shipping and what his company is doing to help.
JARED BLIKRE: Weston LaBar, Cargomatic head of strategy-- and Weston, thank you for joining us. And I just want to begin with the big story here. We've heard about these congested ports all around the world for various reasons, and China, not the least of which, now they have an electricity deficit. Can you give us an overview of the situation and when-- [INAUDIBLE]
WESTON LABAR: Yeah, you know, it's very interesting, and thanks for having me on. We've been dealing with these issues in many instances for years now. We've had capacity constraints throughout the supply chain. The difference is we haven't had 20+ consecutive months of cargo volume growth. And what we need to do moving forward is look at how we solve these problems, both in the short term and the long term, by being more efficient.
But I don't see a line of sight where this ends anytime soon. If you look at me, it's driven by the consumer demand. And one of the big impacts of COVID was the impact of e-commerce and the need for more drivers in the industry, the need for more infrastructure in the form of local delivery centers to be able to get products to homes. And this continues to impact the supply chain.
But if you look-- we're working with customers on their forecasts throughout 2022 already, and I don't think you're going to see much of a dip in-- or a reprieve in these bottlenecks until you see either consumer spending habits change or a massive investment in both our infrastructure and our workforce.
JARED BLIKRE: Well, and I want to get a sense of if this is affecting disproportionately some industries or some items that are being shipped rather than others. I would think-- and I'm no expert here-- it's easier to ship a little toy clown somewhere than an entire vehicle. But what are the constraints here on some of the individual shippers?
WESTON LABAR: Yeah, and we work with shippers of all different types. I don't see any commodities right now that aren't impacted because the vessels are bringing everything over. I think the things that are more impacted, though, are where you need special types of labor, if you will.
So from the trucking perspective, for instance, when you have a need for a hazmat driver because you have hazardous materials or you have the need for a driver to have special permits or qualifications like going in and out of seaports or going in and out of rail ramps, that obviously creates a bigger constraint because we have a massive truck driver shortage and we have for decades now.
In, fact, recent estimates show there's roughly 480 commercial driver's licenses per 1,000 heavy-duty trucks. That shows you that we have less than 1/2 a driver per truck. And when you have to further qualify them on do they have the right type of equipment to move certain types of commodities or products or do they have the right types of qualifications, you're going to run into even more issues. And I think that's where we've seen the biggest delays in trying to source truck powers, for instance, for our customers is when they need specific types of drivers.
JARED BLIKRE: Well when you say half a driver per truck, I'm thinking, which half is are they using for that? I want to get to what your company in particular, Cargomatic, is doing to help your customers with the situation.
WESTON LABAR: Yeah, so Cargomatic takes a different approach to the supply chain. We marry leading-class expertise and leading-class technology to help try to create better asset utilization. So when you think of capacity, for instance, in the trucking industry, usually you think add another truck and you'll get more capacity. Actually, if you can get that truck to do two turns or three turns as opposed to one, meaning they move three containers or they move three trailers as opposed to one because you're maximizing your networks and being more efficient by leveraging data, you have the ability to inflate your capacity.
And what we have is a two-sided marketplace, working with shippers and truckers, to try to marry large shippers, you know, household names that everybody knows, with a lot of mom and pop truck capacity that most people don't think about or don't have the ability to manage. And by leveraging that technology, we can open the doors, both for small businesses as a technology enabler of the trucking industry, as well as get access to those small businesses for some of the largest companies in America that are bringing in goods that we use every day.
JARED BLIKRE: Yeah, really nice to see small businesses getting the ability to at least kind of get on the same footing as some of those larger companies. Weston LaBar, Cargomatic head of strategy, thank you for joining us.