caroline: today, romaine bostick misses president biden saying the supply chain might be seeing some relief. today, we discussed how some officials think the worst might be over, but it will take some to untangle the bottlenecks.

the gap said supply chain problems led to higher expenses. let's hear from president biden. >> we still face challenges in our economy. disruptions related to the pandemic have caused challenges in our supply chain. that is part concerned about shortages and contributed to higher prices. moms and dads are worried asking will there be enough food we can afford to buy for the holidays? will we be able to get christmas presents to the kids on time? taylor: let's do all of this and more with our senior logistics strategist. a great piece on the terminal. every step of the global supply chain is going wrong all at once. we talked a lot about the ports, trucking, distribution centers. where do you see the biggest

chokepoint happening? >> the reality is the chokepoint in my view is centered around the labor shortages that we are facing. not only across transportation logistics, but the broader economy. that is impacting throughput at many ports. in addition to that, you had a total dislocation of the supply chain when the economies begin to shut down. it shut down first in asia followed by the u.s.. then china opened up for we did and they were sending their exports to us and we weren't ready to have them. that created an imbalance within what was normally an imbalanced supply chain anyway where it was difficult getting empty containers back to asia so they can fill them. the good news is at the ports in southern california, the backlog

peaked around november 6. that has come down from that peak. we believe there will be a stairstep production probably early next year following the lunar new year as supply's have time to catch up. it's interesting to know that supply chain's have been hit by one thing after the next. last week, we had weather issues in western canada the flooded the port of vancouver. that's another black swan event that the supply chain's are dealing with. over the last two years, it has been one event after the next. 1 i want to talk about the fact that all of the shortages are happening all at once. look at freight, materials, workers, is this just bad luck? it seems like something you can't plan for or is there some common thread connecting all of

the issues we are seeing in every part of the supply chain? >> the issues we are having have been decades in the making. it's the move to just-in-time inventory, the increased globalization of the economy. the increased reliance of north america to asian imports. all of these things contributed. i do have the answers. it's going to take money and time to fix. it depends on how much money you want to throw the problem and how much time we have. during the holiday season, there's a lot of concerns about whether the legos are going to get under the tree in time. the good news at most big-box retailers, their inventory situations are good. the smaller retailers are probably struggling more to make sure they have enough inventory for the holiday season. caroline: they can least afford freight costs which the gap just made clear.

they spent so much money on airfreight for the year. are we likely to see a mixture going forward of how you transit or are we likely to see people on shoring more and does it make economic sense? >> our thesis is there will be a diversification and it could be within modes and where you are sourcing things. for some products, the overall transportation costs to get to the united states is cheaper if it's manufactured in mexico versus asia. the reality is that china has such density when it comes to manufacturing stuff, it gets expensive to build up that manufacturing presence in mexico. the automotive industry has done well at that. you are seeing other industries looking south of the border to be closer to their and markets. and limit the impact of

disruption to supply chain's. once this is all fixed, it's going to happen again, we don't know what the black swan events are going to be that will create these issues. our outlook 2022 across the board is for good pricing next year. we think the contractual rates for trucking should be up on top of what we were seeing this year. that will translate into good rail pricing. we think that container rates will come down from the unsustainable levels were we have seen that. they will be well above historical levels which is good for the industry because for a lot of time, to struggle to make a profit before the craziness we have been seeing with spot rates going as high as $10,000 to bring over from china. caroline: always great to have you on.

coming up, sticking with the supply chain. we will get more on the challenges surrounding global logistics. this is bloomberg. ♪

caroline: we are focused on the supply chain. one thing we have seen re-correcting itself is the dry indices. taylor: i am getting schooled by our producers on ships and the

largest class that can take any cargo. we are all learning what the dry index is. shipping cost per container. this was the moment that we talked about it was at one point above $10,000. does this mean some of the pain is over? let's inc. about all of this with craig fuller. his company specializes in data, analyst six, and risk management for the freight market. we got earnings out of gap and nordstrom, both of which highlighting huge issues with the supply chain issues they are facing taking big costs to tackle this. yet the chart that i just showed looks like maybe the worst could be behind us.

how are you thinking about at this moment are things improving or not? >> the baltic is measuring bulk freight. different than what gap and nordstrom are facing. we are seeing lower levels of backlogs coming out of china. it looks like some relief in the port of los angeles and southern california ports. trucking looks like capacity has come back much quicker than we anticipated and we are seeing much less injections in the market than we had two months ago. that is suggesting even the volumes are consistent, capacity coming back mainly are motor operators. katie: i'm curious to hear from you what the future looks like. maybe five years down the line? a lot of the problems with the trucking industry, the labor shortages you are seeing, that

has been years in the making. i'm curious about whether the industry changes as a result of what we are living through now? >> labor issues, i grew up in trucking. i grew up hearing about driver sure just. if you go -- driver shortages. this is a challenge that has plagued the industry for many decades and will always be an issue. the lifestyle of a truck driver is very difficult. different than the type of jobs people want to have today. they have to be away from family and it's a strenuous job. the labor issues come more more challenging. trucking as a career tends to be a job of last resort. you're going to face driver issues as long as you require a driver to drive a truck. at some point, we will reach

inflection where the driver is no longer required to be in the cab and when that takes place, the entire fragmented nature of the industry changes. caroline: we will speak to the women in trucking association president and a moment. you focus very much on the digital side of this. the market data, the analytics that you can do to get a read of what is happening. how much has technology proved help or hindrance in this moment? are we seeing more digitized and it comes to the ports? anecdotally, you can hear the president say we made the port 24/7 then they say it doesn't matter unless you get the truck drivers going. are we digitized enough to get more of a 24/7 read? >> you are digitizing not the bottlenecks. the ports still require a lot of manual labor.

the scheduling system is a mess. we are not seeing the level of technology solve those issues. if you look across the industry, there is a large investment in digitization. you mentioned gap, we talked about nordstrom. you can go top to bottom with companies that have robust supply chains, t.j. maxx has robust supply chain and they say they are not going to have supply chain issues this season. companies that have advanced supply chain technology and visibility systems are going to outperform those that don't. us being in the space, we have a good sense for which companies run the best technology and which ones don't and it's showing up in earnings with companies that have the inventory because they built resilient set of networks and technologies. they are doing much better than those who haven't made the investments. >> you mentioned something about

fully autonomous vehicles where if the labor shortage is the problem, eventually it may not be. if we don't need truck drivers, part of the supply chain is fixed. what does that look like to you? >> let's say 10 years out. we will have to point thomas and driverless trucks. you may have some human assistance similar to military drones. at some point, we will have the ability to haul freight in vehicles on a highway without human drivers. when that takes place, is going to take -- it's going to be a completely different market. you will see large private equity and technology companies make a play. we have seen companies recently that have gone public that are trying to offer autonomous

trucking services. when that technology is mature and the regulatory environment supports it, all the fragments of the market largely disappear over time. the reason the trucking market is so fragmented is because of the truck driver. if you eliminate them, that goes away. >> there are some signs that things are getting better when it comes to supply chains. is that because things are truly getting untangled or is it just because the demand side is cooling off because we have these issues? >> demand appears to be relatively flat. look at the freight volumes, we are not seeing the exponential increases that we have seen over the past year. i think what is happening is the market is starting to model and people are petting their time and looking at different solutions that are taking a lot of pressure off of the

bottlenecks. because of that, we are seeing improvements. joe biden's chief of staff said something early today that etsy did a survey and they are not seeing the supply chain they sought last year. everyone is much more aware of the issues and they're starting to take precautionary measures to pad the time if you go to the stores and retailers, it feels very much like the week before christmas in the local mall because everybody a shopping. consumers have become accustomed to it and large shippers and retailers have started to manage their supply chains more resilient and had more time to plan appropriately. taylor: it is that resiliency that is proving some companies better than others in this holiday season. we really appreciate your time

and your perspective. we have an update on the strategic oil will serve story. earlier, we heard japan indicated it would release 5 million barrels. now we hear the company is planning to release 4.2 million barrels. that's a developing story. coming up, when it comes to hiring truckers and drivers. our guest is the president of the women in trucking association. this is bloomberg. ♪

caroline: today we are focused

on all things supply chain. the recently passed infrastructure bill hopes to address the shortage in truck drivers. secretary of transportation spoke to us last week about the need to take care of current drivers. >> this country is not making the best use of the truckers we already have. i hear so many stories about their experience going up to a port and getting conflicting instructions about where to go. since they get paid by the load, they are digesting the cost of that wasted time. it is a cost to the economy at large. we have a lot of issues to work through not just in the ports but throughout the entire system and that includes the trucking and rail side of things. caroline: the previously said just need to make the job more advertising. we want to talk more about the state of truck driving

especially when it comes to hiring women in the industry. we spoke to you about the focus on trying to widen the net to bring more people into the world of trucking and how are you finding at the moment? are you getting more people to sign up? >> yes women are increasing as far as drivers. they are seeing opportunities and also the value of the supply chain and what it has to do with their own lives like christmas presents and toilet paper. women know they are getting paid the same as men because as the secretary said, you are paid by the load or by the shipment. there is no gender disparity when it comes to pay. >> would you say that's the driving force of white women are entering the trucking industry? if you look at the overall economy, women have broadly left the workforce or having come back to it in the way that those who lost their job at the height

of the pandemic have. >> 83% of women coming into the trucking industry do so at the urging of the family member of -- or a friend. typically that is a husband or spouse or significant other who says go get your license and come out on the road. women are about 50 years old. we need to reach a younger audience, but these women are coming in because they know they can make the kind of pay that men can make and it's a decent living. taylor: my friend we were talking about before, that a 10 year problem it could be fully autonomous driving vehicles. is there a fear that now could be a peak moment and 10 years from now, we will all be in self driving cars and trucks? >> no. i disagree on having folio

thomas vehicles. even in an airplane and you have autopilot, you still have two pilots. drivers will cite what if you have a flat tire or an accident or construction? you need to some kind of operator in that vehicle. i don't think we are going to eliminate the humankind component in my lifetime. maybe chicago or new york or the big cities where things unexpected could happen and you need a person to react. caroline: you said most of the women coming and have been enticed by a family member. talk to us about how you are

recruiting. how have you thought about making it that much more enticing to bring people and if they don't have a family member already doing? >> we have to tell a story. we have to show women who are doing the job and they love it. we have a number of the month and a driver of the year. we have created a girl scout transportation patch. over 1000 girls have earned that. we have a new driver ambassador tractor-trailer that launched and that will go out to the non-trucking public and it will have hands-on learning environment. do i have the dna of this job? it will have a simulator in the back so you can sit down and try and see what it's like to drive a tractor trailer. caroline: it's always fascinating talking to you. come back when you can get us up to speed. always fascinating conversation discussing the supply chain.

we are talking about tableau, hiring, the world of digital. taylor: bloomberg vtec with caroline is coming up next. ♪ every day in business brings something new.

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>> from the heart of where innovation, money, and power collide, in silicon valley and be line -- and beyond, this is "bloomberg technology." ♪ caroline: i'm caroline hyde, in for emily chang. this is "bloomberg technology." anna cutting edge chip fabrication plant in the longhorn state.

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