Perspectives on the Supply Chain

Frederick D. Paxton II, president and CEO of Paxton Companies, and Susan Sainz, director of account development at UniGroup, discuss some of the issues related to the mobility supply chain.

This article was originally published in Issue 2 2023 of Mobility magazine. 

Supply chain issues have plagued global trade since early on in the COVID-19 pandemic. While the backup has improved since then, companies continue to face many challenges. We caught up with two representatives of Worldwide ERC® members, Frederick D. Paxton II, president and CEO of Paxton Companies, and Susan Sainz, director of account development at UniGroup, to discuss some of the issues related to the mobility supply chain.

How would you characterize the current health of the supply chain?

Frederick Paxton (FP): The current supply chain is out of intensive care and in recovery. However, there needs to be multiple lifestyle changes for this supply chain to recover fully. The lack of infrastructure and the age of the ships, containers, trucks, etc., all need to be improved, especially in the U.S. where we lag behind the technologies of the ports like Singapore, Hong Kong, and Antwerp. The current administrations new infrastructure plan is finally addressing this; I just hope it’s not too late.

What are the biggest issues your company is seeing right now?

FP: Right now, the war in Ukraine, Middle East peace, and global warming. All these affect the shipping flow of our supply chain.

Susan Sainz (SS):

• California’s AB5 law – Working with our network so that each agent know how or if it impacts them.
• Data security is impacting industries nationwide and remains a top area of concern and opportunity in the transportation industry.
• Sustainability
• Risk retention and third-party insurance costs have increased dramatically due to macro-environment factors and large nuclear verdicts within the overall transportation industry.

Can you talk about the current driver shortage and speak to the challenges the tight labor market presents for your business at the moment?

FP: For our company, we were already working globally, so many of our team members were already working remotely. This allows us to connect with the best talent in our industry. Our team is also very diverse in language, culture, and location. This allows us to mirror our transferees and recruit the best talent.

SS: According to the American Trucking Association (ATA), trucking is responsible for one in 16 jobs in the U.S. overall. As one of the nation’s largest employers, the trucking industry faces myriad issues associated with recruiting, training, and training its workforce. ATA is estimating a need for over 100,000 qualified truck drivers in the over the next 10 years. 

Why the shortage? The average age of a driver is 55 years of age. To compensate for the shortfall, ATA is lobbiyng to change laws to change the age you can obtain a CDL to cross state lines to 18 years old.

Those agent van operators who drive for the Mayflower and United Van Lines brands on the corporate relocation side do not bump docks. They are responsible for physically loading and unloading a customer’s most valuable possessions. They are also responsible often for securing local background checked labor. According to U.S. Department of Labor, the transportation and warehousing companies increased hourly wages 17.7%, and labor has been slow to return to pre-pandemic numbers. This means it is harder and more expensive to source local labor.

To manage some manpower shortages, UniGroup has been developing a middle mile program, creating teams of local crew members to handle the origin and/or destination and, in most cases, the driver and crew members are home every night. We then use CDL cross-country drivers for power lanes. Efficiencies like these will enable us to build out a stronger local team and retain drivers for the long haul.

The UniGroup container program has been in place for 15 years. Given the success of the program and challenges related to drivers and labor, we have enhanced the container program. Year-to-date, UniGroup has completed more than 9,000 container household goods moves. The program offers additional customer benefits and also helps mitigate labor challenges and driver shortages.

What do you think needs to occur for the worker shortage to subside?

FP: Immigration reform is key to always supplying the best local talent. Allowing various visa programs to flourish to keep the competitive market for labor to stay open and vibrant.

SS: Factors such as inflation and slower hiring market trend should ease some of the pressures.
What trends are you seeing in the mobility/worker relocation space?

FP: Trends are important to look at but, ultimately, you need to be doing right by your client and their recruiting and talent needs by ensuring no matter who is taking a new position that mobility enhances that process. It should be helping to open the doors to acquire and retain the best talent no matter where on the globe they are needed.

SS: Currently, our agents are receiving move initiations from national account clients, but many transferees were waiting to sell their home this spring before wanting set move dates.