Labor shortages and agricultural trucking rates

Abstract

In the United States, truck rates for perishable food, the per-mile rate charged for trucking services to move perishable food from farms to stores, rose substantially in the post-COVID-19 pandemic era. We argue that rising truck rates is a signal of a broader shortage of truckers, but the connection between labor shortages, rising truck rates, and a lack of trucking services has yet to be established empirically. In this paper, we develop an empirical examination based on an equilibrium job search, matching, and bargaining framework in which we estimate the role of labor shortages in accelerating driver-wage growth, and truck rates for agricultural products. We estimate the model by combining US Bureau of Census Current Population Survey data on truck driver wages with USDA-Agricultural Marketing Service Service data on truck rates to establish the linkage between trucker supply and the demand for trucking services. We find that the COVID-19 pandemic was responsible for a rise in for-hire trucker wages of some $38\%$, a rise in average truck rates of nearly $50\%$ and that the gap between trucker-job openings and successful matches explains a significant, but small, rise in truck rates.