FTC launches inquiry into supply chain problems
November 30, 2021
The Federal Trade Commission is now taking its turn at looking into the nation’s supply chain disruptions.
Through a news release issued on Nov. 29, the FTC announced that it is launching an inquiry to see what is causing empty shelves and inflated prices at stores across the country. As part of the inquiry, the FTC is ordering nine large retailers, wholesalers, and consumer good suppliers to provide information on what may be causing the problems with the supply chain.
The orders are being sent to Walmart, Amazon, Kroger Co., C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co., Procter & Gamble, Tyson Foods, and Kraft Heinz Co. The companies have 45 days to respond.
“Supply chain disruption are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber,” FTC Chairperson Lina M. Khan said in the news release. “I am hopeful the FTC’s new study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects.”
According to the FTC, the orders require the companies to detail the primary factors disrupting their ability to obtain, transport and distribute their products. It also will examine whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or rising consumer prices. The companies will be required to provide internal documents regarding the supply chain disruptions, including strategies related to supply chains, pricings, marketing and promotions, costs, profit margins and sales volumes, selection of suppliers and brands, and market shares.
Supply chain in the news
Issues with the supply chain have dominated mainstream media headlines for months. On Nov. 17, the House Transportation & Infrastructure Committee hosted a hearing titled “Industry and Labor Perspectives: A Further Look at North American Supply Chain Challenges.”
Although a shortage of truck drivers is often blamed for supply chain disruptions in the trucking industry, David Correll – a transportation expert from MIT – told members of Congress that the problem was less of a headcount shortage and more of an inability to value truck drivers’ time.
Correll said that truck drivers only drive an average of 6.5 hours of their allowed 11 hours each day. The MIT professor pointed to such issues as detention time and truck parking as key contributors.
The American Trucking Associations has claimed that the industry faces a shortage of 80,000 truck drivers. However, Correll said that purported deficit could be resolved by simply improving the utilization of America’s existing truck drivers by 18 minutes per day.
“My research leads me to see the current situation not so much as a headcount shortage but rather as an endemic undervaluing of our American truck drivers’ time,” Correll said.
The Owner-Operator Independent Drivers Association has argued for years that there is not a driver shortage and that the issue is more of a driver retention problem caused by low wages and poor working conditions.
OOIDA President Todd Spencer told CNN that there is no quick fix to America’s supply chain problems, and OOIDA Executive Vice President Lewie Pugh told radio personality Glenn Beck that there is not a shortage of truck drivers.
OOIDA says many of the issues stem from drivers being stuck in detention, and the lack of truck parking.
On Nov. 29, the Association wrote Transportation Secretary Pete Buttigieg to ask him to dedicate $1 billion in discretionary funding to the construction of truck parking. OOIDA called it a safety issue and said that lessening the amount of time truckers have to search for parking would improve the supply chain. LL