This is just a quick note on some learnings from the last few days. While there are a lot of issues in supply chain which are well documented both here and other places (i.e., international capacity, truck capacity, shortages of materials etc.) the single biggest issue I hear from all my peers is the labor issue. So, why is this such a big issue?
First, it appears to be a very systemic issue which is pervasive and has no easy fix. A lot is discussed about pay rates but the reality is America is running out of workers. it is simple math. The chart below from MacroTrends (Source United Nations) shows it clearly:
The birth rate of the United States is the problem. Combine that with a very restrictive immigration policy of late and you can see the problem. This was not an unforeseen problem. 5 years ago, at a HBS reunion I heard the head of the Dallas Federal Reserve say this was coming. Is it COVID related? Well, like all things, COVID did not help, but this was coming for a long time. We are just now here.
So, if you are young and fertile… get at it and do your patriotic duty and have kids.
Second, I hear over and over again from friends in almost every industry in America: They cannot produce fast enough to meet the demand for everything. Thus, there is a shortage of everything. Given how long it takes to spin up large capital projects I would just say we have to learn to live with it.
Finally, the trend of the markets valuing and investing in technology instead of assets continues. Flock Freight is now the newest unicorn according to TechCrunch. Another app to try to help me find capacity. This, I will admit is a bit unique in that it is not just another brokerage app but more assistance in co-loading. Co-loading has been the holy grail for 30 years so I will watch this closely but so far, app or no app, no one has seemed to be able to make this work.
OK, that is it and the song for tonight is in honor of these unicorn companies getting 100’s of millions of dollars: Winner Take It All, by Abba:
