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Title: COVID-19,Truck Rates, and Trucking Shortages
Citation Type: Miscellaneous
Publication Year: 2023
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Abstract: Problem Definition: Media and industry reports maintain that the U.S. long-distance trucking market is experiencing a shortage of drivers. Driver shortages mean that critical industries, such as the food industry that forms the setting for our research, experience bottlenecks in trucking services and higher truck rates. While industry trade associations maintain that the problem is a lack of truckers, shortages can also arise from an excess demand. But, disentangling trucker supply from trucker demand requires a formal model of labor-market equilibrium. Inthispaper,we examine the connection between laborshortages,rising truck rates,and an apparent lack of trucking services using a structural approach to modeling the demand and supply for truckers. Methodology / Results: We develop an empirical approach based on an equilibrium search- matching-and-bargaining framework in which we estimate the role of labor shortages in accelerating driver wages, and truck rates for agricultural products. We estimate the model using U.S. Bureau of Census Current Population Survey data on truck drivers,and USDA-Market News Service data on truck rates, to establish the linkage between trucker-supply and the demand for trucking services. We found that the COVID-19 pandemic was responsible for a rise in for-hire trucker wages of some 38%, and a riseinaveragetruckratesofnearly50%,andthatthegapbetweentrucker-jobopeningsandsuccessful matchesexplains a significant rise in truck rates.
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Authors: Richards, Timothy; Rutledge, Zachariah
Publisher: AgEcon
Data Collections: IPUMS CPS
Topics: Labor Force and Occupational Structure, Population Mobility and Spatial Demography
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