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Transportation

Wal-Mart is making some big moves to capture the labor market on truck drivers by raising salaries to nearly $90,000.

This is a flight to quality move that may be the canary in the coal mine for long-term trends in the labor marketplace for truck drivers. Wal-Mart is already an industry leader in truck driver salaries and can boast a logistical support system that is the envy of many in the industry. The push to increase salaries by 15-20% indicates that direct labor compensation is a key factor in creating a sustainable labor supply over that of improved benefits or work environment. This labor cost shift will be the logistics industry hot potato on shouldering the burden.

Congestion at the major ports are not helping that there’s a lot of truck labor idling at transfer points. The Port of New York and New Jersey has extended their gate times in order to handle rising cargo volumes and short labor staff due to the holidays. The Port of Los Angeles and Long Beach are implementing a program of infrastructure developments to speed up container velocity. This will include a new bridge between the Los Angeles and Long Beach ports. Rail freight going through the Midwest contended with a polar vortex that prompted extensive use of fire systems to keep switches in operation.

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