Uber Freight head Lior Ron warned of a “shipping armageddon” in a CNBC interview Thursday amid a commercial truck driver shortage and mounting disruptions in U.S. supply chains.
Uber Freight, which Ron helped launch in 2017, connects shipping companies who need goods hauled across the country with available truck drivers. Ron noted more than 1 million drivers are now on the platform’s network. But an ongoing shortage of drivers is causing serious disruptions to the economy and affecting domestic supply chains.
Experts say the COVID-19 pandemic and long-term industry issues, particularly demographic trends and the regulatory environment, have exacerbated the shortage of truck drivers. Ron told CNBC’s Jim Cramer in an interview on “Mad Money” that there isn’t one solution to the shortage.
“It really requires the entire industry because we are facing just unprecedented times. We’re literally living in a shipping armageddon,” he said. “We can definitely make a dent with technology — and we are — but it requires more.”
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Trucks play a critical role in the supply chain, delivering goods around the country once they’ve been offloaded from ships at U.S. ports. President Joe Biden’s administration has worked frantically in recent weeks to address growing supply chains bottlenecks at ports, and introduced a plan Wednesday to help key ports on the West Coast stay open around the clock. (RELATED: ‘It’s Unprecedented’: Builders Running Out Of Key Construction Materials, Forced To Find Alternatives)
U.S. officials admitted in a Tuesday press call that the Biden administration’s policies are at least partially to blame for the supply chain chaos. The White House also said consumers should expect higher prices and even some empty shelves by Christmas.
Ron told CNBC in Thursday’s interview that consumer behavior during the pandemic has had a major impact on the supply chain. Consumer spending fell sharply at the onset of the pandemic but has grown considerably since January, according to data from McKinsey & Company.
“We’re just ordering more and more and more packages that we love to come to our doorstep, but the supply chain is completely imbalanced. We saw that in boats, same with trucks. The entire network is different,” Ron said.
He added that the sharp increase in consumer demand is one reason it has become “harder” for truck drivers “to be on the road.”
“We’re asking them to do more and more and more, and maybe they don’t want to even have to go on the road because they have to be stuck in facilities or they have to take on health concerns,” he said. “It requires all of us.”