In less than two decades, the graying of America will be inescapable: Older adults are projected to outnumber kids for the first time in U.S. history.
These adults will also be retirees, according to a U.S. Census Bureau report, which says that by 2035 there will be 78 million adults over the age of 65, compared to 76.4 million children under 18.
By 2030, all baby boomers will have turned 65, which makes 1 in 5 Americans older adults. But the gap is expected to widen even further—with estimates showing that by 2060, there will be 95 million older adults compared to 80 million kids under 18.
So what does this mean for the furniture industry?
In the grand scheme of things, it could have an effect on nearly every part of the industry—from sales reps to retail staff, and more.
In the first part of this four-part series, we’ll focus strictly on the effects of driver shortages for trucking.
As many have already seen in the home furnishings industry, well before the pandemic there was a shortage of drivers due to many truckers aging out. The American Trucking Association (ATA) confirms that even before Covid-19, the sector was facing a deficit of some 62,000 drivers.
And now, due in part to the pandemic, the ATA estimates that in 2021 the shortage will climb to a record high of just over 80,000 drivers. They also say that if that continues, the number may soar to 160,000 in less than ten years.
There are a few different reasons younger people aren’t filling these roles. First, CDL requirements pushed potential new drivers’ age limits from 18 back to 21, meaning there are actually fewer available drivers than in years before due to the age restriction.
That’s also a problem because 18 is a prime age for those who want to start school or develop a trade skill, so with the age limitations, trucking companies lose viable employees who have already started to pursue other careers instead of one in trucking.
Younger people also want flexibility with their jobs, something that had been further enforced by the pandemic. Not many young people want to take long-haul runs for pay they could get while staying in a cozy office—or even the comfort of their own home.
If the pay isn’t worth it, they won’t even think about applying for the job.
Also, think about this: a California truck ban says all rigs must be from 2011 or newer, and the state wants carriers to have electric vehicles, which do not yet exist. So if the state with the most heavily trafficked ports doesn’t have enough usable trucks to send out shipments, that’s going to create a problem at the source.
Considering all of these issues, the furniture industry can’t function if trucks aren’t running furniture from the ports to various locations throughout the country.
And if young people don’t fill the spots of those retiring, that will put a huge bottleneck in place that cripples retailers and manufacturers alike.
Imagine lead times moving from an outrageous 3-4 months to becoming “flexible”—as in, it will get in when it gets in as long as there are truckers to drive it. That might be worst-case, but it’s certainly possible if trucks aren’t moving.
In the long term, the shortage could also mean a few different things for the home furnishings industry. Some bigger companies might start buying their own trucking fleets to make the drives from the ports to the drop-off locations. Just look at Ashley Furniture (LINKKKKK), who recently acquired Wilson Logistics to expand its capacity and ship orders quicker.
If the problem gets really bad, companies may have to start shipping to other ports—which is more expensive. That could be worth it if the product gets to the consumer in less time.
Also, labor shortages have reignited the logistics industry’s focus on launching driverless trucks. In Bentonville, Arkansas, home of Walmart, the company introduced the world’s first truly driverless truck, which carries goods from a local fulfillment center to Walmart Neighborhood Markets.
The self-driving vehicles are currently operating on fixed, repeatable routes and offer middle-mile solutions, but the writing is on the road for where these advancements will lead.
Walmart has partnered with Gatik Al, a California-based firm that has put the giant retailer in the fast track of the middle mile, autonomous delivery solutions. While the company acknowledges that last-mile delivery is still down the road, the company says that goal is on the drawing board.
But based on the current challenges the trucking industry is facing, the road sign ahead is likely to warn…Caution, rising prices ahead.
Overall, a trucking shortage is bad news for any industry already plagued with supply chain issues. And unfortunately for all industries, there isn’t an easy fix.
The younger generations will have to be fairly compensated and shown that trucking can be a viable, rewarding career. And it’s up to the older adults—the majority—to show them.