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December 16, 2021 6:30 PM, EST

Transportation Groups Seek Federal Help to Ease Chip Shortage

semiconductor chipA semiconductor chip. (Ivan-balvan/Getty Images)

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A coalition of trucking, transportation and manufacturing stakeholders in letters sent to President Joe Biden, members of his Cabinet and congressional leaders expressed concern over how the persistent shortage of semiconductors needed for manufacturing new trucks is affecting the broader economic landscape.

“We ask you to prioritize actions to address the semiconductor supply shortage which is hurting America’s trucking industry,” the groups said in the pair of letters sent Dec. 3. “This is happening at a time of increasing demand and threatens to further disrupt supply chains heading into peak season, increase layoffs and plant closures, and drive up the prices on shelves for consumers while reducing Americans’ access to critical goods and services.”

Among those signing the letters are American Trucking Associations, UPS Inc., the Truck and Engine Manufacturers Association, the Truck Renting and Leasing Association, the NAFA Fleet Management Association, the American Highway Users Alliance, the National Industrial Transportation League and the International Warehouse Logistics Association.

Chips President Biden by Transport Topics

In the letters, the groups note that new vehicles are increasingly reliant on semiconductors for managing all manner of vehicle systems. Without these components, trucks that would otherwise be hauling freight during a period of high demand sit idled.

“Truck manufacturers and suppliers continue to experience severe shortages of semiconductors that are needed to build and replace engines, emissions controllers, transmissions, crash avoidance systems, steering and braking controls, door control modules, sensors, digital displays and other critical components,” the letter said. “As a result, thousands of unfinished trucks are parked in lots across the country waiting for chip-enabled components, and tens of thousands of existing trucks are waiting for repair parts that are not available.”

Amid these bottlenecks, carriers cannot get new trucks and used trucks are getting more expensive, the groups noted.

“Trucking fleets and customers ordering new trucks today will have to wait until February 2023 on average for the trucks to be delivered,” the letters said, citing data from ACT Research. “The average used truck sold last month was 67% more expensive than last October. This is impacting the nation’s economy and supply chains across numerous sectors, as well as the 8 million Americans and their families who are employed in trucking-related jobs.”

They also noted that manufacturers are not prioritizing automotive chips.

Chips Trucks Industry by Transport Topics

“A recent Gartner report found that while chipmakers are increasing capital expenditures, less than one of every six dollars is designated for ‘legacy chips’ needed by the automotive, trucking and other industrial sectors,” the letter said. “The bias against automotive grade chips in favor of higher-end, higher profit margin microchips for consumer electronics threatens to further disrupt supply chains, increase inflation and damage the U.S. economy.”

Citing trucking’s critical role in the supply chain, the groups urge government officials to give priority to companies building new trucks or providing parts for trucks already on the road.

The letter writers also voiced support for the CHIPS Act, federal legislation that its sponsors said holds the potential to jump-start semiconductor manufacturing in the U.S. by providing investments and incentives for the development of new manufacturing facilities.

“To address the worsening impacts of the chip shortage on America’s trucking industry, we ask you to ensure that companies applying for CHIPS Act funding use those U.S. taxpayer dollars to support essential American industries that are creating American jobs supporting the U.S. economy,” the letters said. “Without up-front conditions, this public investment could take years to yield the automotive grade chips that are urgently needed to keep trucks on the road delivering essential goods and services to the American people.”

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