Managing Home-Made Business Formal Report—6-8 pp. This will involve researching a business topic and preparing a report for the proper audience. Components of the process will include: Draft (due april 9) 50 pts Peer editing (quality/quantity) 30 pts Final paper (Due April 30) 150 pts Draft should be as complete as possible–concentrate on the body of the report. Drafts that do not have both in-text citations and reference page will not be accepted Full credit for the draft will be earned simply by submitting a FULL draft with content attempted for each section (outline below) for comments. The relative quality of the document is not necessarily factored into this component. This draft will also be submitted to classmates for peer review activities. The FULL draft must include the following elements: 1. Introduction (5 points) 2. Background (5 points) 3. Discussion (20 points) 4. Conclusions (5 points) 5. Recommendations (10 points) 6. References (5 points) Written Assignment: Each student writes a six – eight (6-8) page professional report with at least two graphics (tables or graphs preferred). You will need to discuss the background of the parties, identify problems, analyze alternatives, and recommend corrective actions (if required for report type). The written report requires primary and secondary research. The two most appropriate types of primary research are interviews and/or surveys. Use a formal, third-person writing style (i.e., professional language, no contractions, no personal pronouns, no personal references to the group or group processes), including appropriate formatting, headings, margins, and in-text citations. Use APA style. The standard convention is margins of 1-1.25 in; 11-12 point TNR font; Left justified. Contents for the FINAL Report Cover sheet Letter of Transmittal Table of Contents & List of Figures Executive Summary First page of report and remainder of the body of the report (6-8 pages, including 2-3 graphics of 1/3 page size max) References Appendices (Surveys and/or interviews–If Used) [This will be in final report only] ALTHOUGH APA FORMAT LISTS DOUBLE SPACE, THE CONVENTION FOR BUSINESS REPORTS IS SINGLE SPACE SO WE USE SINGLE SPACING. THIS IS NOT THE DEFAULT SPACING WORD USES. CHANGE IT TO SINGLE SPACE AND 0 POINTS BEFORE OR AFTER RETURNS. Walmart Truck Drivers Shortage Prepared for: Walmart CEO Prepared by: Ali Alsaadi December 3, 2018 Letter of Transmittal To: The CEO of Walmart 702 SW 8th St., Bentonville, AR 72716 December 3rd, 2018 From: Ali Alsaadi 15301 Redwood St., Omaha, NE 68138 Subject: Possible Solutions for Truck Driver Shortage To whom it may concern, I am writing to you today regarding the serious issue of truck driver shortage being face by the United States at this present time. I understand the seriousness of the matter and would hence like to propose a few possible solutions that may be adopted to solve the current problem. This report highlights the extent of the problem faced by truck driver shortage in the United States and several serious consequences that may be faced du to worsening of the situation. The major problems leading to the acute shortage are the lifestyle issues of truck drivers and the country’s exceptional unemployment rate. In order to effectively counter these issues, we must take up a different approach that will enable us to effectively troubleshoot the problem in the long run. After assessing the major problems that are responsible for their increasing truck driver shortage, I have proposed two major solutions. The first solution involves adopting the newly developed Blockchain technology that will significantly increase employee satisfaction, improve distribution and delivery and ensure maximum wages and turnover. The second solution deals with recruiting drivers from foreign countries to combat the countries low unemployment rate. Although time consuming, this method offers an effective solution in the long run. I sincerely hope that this report facilitates your business positively and enables you to adopt the solutions described in the most productive ways possible. I would be happy to answer any questions you may have as well as assist in the implementation of these solutions in any way I can. I look forward to hearing from you and working with you. Thanking You, Ali Alsaadi ii Table of contents Executive summary …………………………………………………………………………………………………………….. iv Introduction ………………………………………………………………………………………………………………………….. 1 Background …………………………………………………………………………………………………………………………… 1 Discussion ……………………………………………………………………………………………………………………………… 2 The Problem ……………………………………………………………………………………………………………………………………. 2 Need to resolve ……………………………………………………………………………………………………………………………….. 4 Solutions ………………………………………………………………………………………………………………………………………….. 5 Conclusion …………………………………………………………………………………………………………………………….. 6 Recommendations ……………………………………………………………………………………………………………….. 7 References …………………………………………………………………………………………………………………………….. 8 Table of Figures Figure 1. Truck drivers shortage……………………………………………………………………………………………………… 3 Figure 2. Unemployment Rate. . ………………………………………………………………………………………………………. 4 iii Executive summary As the problem of truck driver shortage continues to rise, it is vital to adopt immediate measures to relieve the current situation and prevent further shortages. In this report, we discuss the importance of the trucking industry and the problems that could arise from an immediate loss of truck drivers. • • • Delayed deliveries Increasing customer dissatisfaction Loss of customer loyalty With the dependence of the country on the trucking industry and the increased consumer demand, effective solutions are desperately needed. The purpose of this report is to offer solutions that may be able to alleviate the crisis of truck driver shortage. Here, we discuss the importance of the trucking industry, the possible consequences that may be faced the situation worsens and the need to resolve the problem. The major problems facing the worsening shortage are the extremely difficult and stressful job situations faced by truck drivers as well the countries’ all-time low unemployment rate. In order to achieve effective problem solving, two solutions need to be implemented to independently solve each problem. • • First, adopting the effective and newly developed Blockchain technology will improve the job conditions of truck drivers significantly, enabling them to achieve to efficient, on time deliveries within the available time frame. All this will be tracked continuously, ensuring efficient monitoring, and optimized workflow. Second, the problem of the country’s low unemployment rate may be encountered by recruiting foreign drivers who are able to take up these jobs more readily and may be able to contribute to the companies’ diversification. iv Ali Alsaadi Angelika Walker MKT 3200-005: Business Communications November 6, 2018 Introduction Trucking is an important aspect of our daily lives. Little do we know, that the large trucks we see and honk at on the highways are critical to our economy. Trucks are responsible for delivering cargo and goods from one place to another including bringing raw materials to manufacturers and finished products to stores. Trucks are responsible for delivering mail, collecting trash, transporting fuel, groceries and everything from building homes to making homes. The fact that truck driver shortage is a rising concern in the United States is no minor problem. Leading US Companies such as Walmart, US Freight Transportation, H&M Trucking and Werner Enterprises among many others are struggling to solve this problem. Walmart, being one of the biggest companies in the USA, is also sailing in the same boat. They have stores all over the country and online shopping through their website, not to mention the Walmart App that makes shopping easy by locating any item in the store. The stores all over the country work as a chain, which require a lot of trucks to keep the Walmart business running. Since the country as a whole has been hit by a truck driver shortage, Walmart has also been affected. In my report, I will discuss in detail the problem of truck driver shortage, how it is and will impact the country’s freight and hence economy as well as several solutions that can be implemented to resolve the problem. These solutions include, but are not limited to, adopting Blockchain technology to make trucking easier and recruiting foreign drivers to combat the shortage in the presence of a low unemployment rate. Background The United States is one of the largest countries in the world and in order to keep up with the growing economy of the country we need truck drivers to keep the countries’ businesses running. According Life without Trucks: Trucking is the beating heart of the U.S. economy. Truck drivers deliver 10 billion tons of every commodity consumed and transport over 671 billion dollars’ worth of goods every year. In fact, 70 percent of all freight moved in the U.S. ranging from the food industry to healthcare is done by trucks”(2017, para.1). With the value of trucks soaring in the economy, the increasing truck driver shortage could lead to alarming consequences to the country’s economy and the life of Americans. The major industries that would be hit if trucking were to cease are retail, manufacturing, transportation, banking, healthcare, and food and waste removal. Over time, as truck driver shortage increases and trucking begins to come to a slow stop, fuel will become scarce and fuel prices will go up, ultimately leading to a fuel outage. Manufacturing delays will eventually lead to a halt in production, causing thousands of people to lose jobs. Hospitals and supermarkets will begin run out of food and supplies, leading to food shortages. Clean water supplies will begin to run out and as garbage starts to pile up, there will be a serious 1 rise in epidemics, which would be very difficult to curb due to the lack of medical supplies at hospitals. Basically, it would lead to a vicious cycle of unfortunate situations that could bring the country down. To give an insight into the current situation, the US has been experiencing a shortage in truck drivers since 2012. According to Davidson in an article published on April 26, 2018, the US had an annual shortage of 15000 truck drivers and the shortage has been increasing since then and it is expected to increase in the upcoming years. As a result of my research, various facts, data and statistics verify the current truck driver shortage: • • • • • US Today news paper Fleet owner Exclusive Insight The Washington Post Trading Economics Walmart Together with these sources and a personal interview with the owner of a foreign trucking company, I will assess the problems and propose possible solutions for the same. Discussion The Problem With a strong demand and restricted capacity, the USA is facing an acute shortage in truck drivers since 2012. Though this shortage has been going on for years, recent boosts in the economy have led to increasing demands for items including everything from clothes to food to electric devisees. As this demand continues to increase, the shortage in truck drivers is expected to reach more than 100,000 by 2020. Figure one shows the trend in truck driver shortage for a decade. From 15,000 less truck drivers in 2012, the shortage has increased to 60,000 in 2018. This shortage is expected to increase by more than 66% in 2022. As we wonder why retail prices of goods are increasing in store and online, truck driver shortages are driving companies to increase driver wages and offer signing bonuses. The severe shortage of truck drivers is leading to empty store shelves and late deliveries and pushing some companies out of business. According to USA today, the nationwide shortage of truck drivers is about 51,000 with the ATA projecting a huge increase as the economy grows at a pace of 3% per annum. The shortage needs to be addressed and solutions need to be put in place before Walmart get a hit as the shortage grow. The highest impact has been on freight costs as 99% of the nation’s trucks are being spoken for every single day. This has increased from 92% in 2015, causing truck companies to increase rates by 6-10% on contracts signed with shippers. This rate is also expected to rise by a similar amount over the upcoming year. Despite increasing driver pay, freight Companies are still having a hard time finding drivers to meet the shipping demands of 2 Figure 1. Truck drivers shortage. The figure shows actual and projected shortages from 2012 to 2022 . Adapted from “Truck Driver Shortage is raising Prices, Delaying Deliveries” by Paul Davidson, 2018, USA Today, Retrieved from https://www.usatoday.com/story/money/2018/04/26/truck-drivershortage-raises-prices/535870002/. their goods. As Long asks (2018), “So why don’t more Americans want this job?” two major reasons come to mind: a) the lifestyle of truckers. b) The country’s unemployment rate. The lifestyle of truckers. Long interviewed truck drivers who have been in the business from 4 to 40 years and while most said life was hard and they were barely able to see their families; one driver named Michael Dow said, “I have been divorced two times because of truck driving” (qtd. In Long, 2018, para. 6). Michael furthered explained how he missed most of his children’s’ lives growing up and how he’d children wished he was home more often. Being a truck driver is already not an easy job with long hours of driving and low wages, put this together with a lack of social life and weeks spent away from family, this is truly a job unwanted. Companies such as Walmart may be able to alleviate the complaints of truck drivers by increasing wages, providing fixed routes and considering hiring within the state. While this will help solve the problem to some extent, there are other potential solutions that may offer greater benefits and will be discussed later. The country unemployment rate. While lifestyle problems are putting people off trucking jobs, the country’s unemployment rates are hammering things down even further. 3 According to Taborda (2018): The US unemployment rate was unchanged at 3.7 percent in October 2018… It was the lowest unemployment rate since December of 1969 as the number of unemployed persons decreased by 270,000 to 6.0 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.5 percentage point and 795,000, respectively” (para. 1). With unemployment rates as low as 3.7%, the struggle of finding truck drivers to match the country’s freight demands is becoming even more difficult. Figure 2 shows unemployment rates of the past year. From January 2018 to April 2018, unemployment rates fell from 4.1% to 3.9%, dropping to an all time low of 3.7% in October 2018. Figure 2. Unemployment Rate. The unemployment rate has been decreasing in the last quarter. Adapted from “United States Unemployment Rate,” by Joana Ferreira, 2018, Trading Economics, retrieved from https://tradingeconomics.com/united-states/unemployment-rate. To make things worse, “On April 1, industry safety officials began enforcing a requirement for all trucks to be equipped with electronic devices to ensure drivers comply with limits on how long they can drive without a break” (Davidson, 2018, para. 6). This has reduced the number of truck drivers can drive everyday and made some drivers look for a new job, as they are not able to make as much money by working overtime. This, coupled with the extremely low unemployment rate, has made it extremely difficult for trucking companies to recruit new hires. Need to resolve Walmart is one of the largest companies in the USA that has its own trucks. According to Distribution Centers and Drivers, “Each year, our drivers travel over 700 million miles and deliver countless loads of merchandise to Walmart and Sam’s Club locations across the nation—all while remaining one of the largest and safest fleets on the road” (2018, para.1). 4 The acute truck driver shortage in the US is adversely affecting Walmart business. In an effort to curb increasing demands, companies are frantically looking for new drivers to hire. I have seen so many Walmart trucks with a sign at the back saying ‘Now Hiring’. I have also seen signs at the entrance of a few Walmart stores saying: ‘Now Hiring Truck Drivers.’ With store pickups and 2-day deliveries, it is becoming extremely difficult for Walmart to keep up with the increasing customer demands in the midst of an ever-increasing truck driver shortage. As they strive to keep with the consumer demand and supply, lack of drivers sometimes results in empty shelves as goods and supplies are not delivered on time. This results in severe customer dissatisfaction causing Walmart to lose customer loyalty. Being a large scale, country wide supplier, this means the loss of hundreds, maybe even thousand of customers and millions in money. Solutions Blockchain. With multiple factors affecting the shortage of truck drivers in the country, there is no ideal solution that can mitigate the increasing demand for truck drivers. While autonomous trucks may be the answer to many problems, they are expensive and still years away in development. Walmart should look at the new technology Blockchain that can combat shortage by streamlining logistics and creating a more efficient trucking for Walmart. According to Burnet Blockchain can help easing the shortage “By maximizes fuel usage, optimizes routes, and ensure automatic, instantaneous payments”(2018, para. 4). The Blockchain technology promotes higher employee satisfaction by the instantaneous payments, which would make more divers join Walmart. A long with that Blockchain will make the trips more efficient in fuel and routes In parallel, Blockchain could lead to safer trips as it can provide information in where exactly the truck is. This will help recruit more drivers, as they will be able to get help anywhere in their routes. Blockchain can lead to better customer satisfaction, as it will let the customer know where did their goods come from. This also eliminates the need for intermediate brokerage firms that charge 30% for transaction handling. As routes are constantly updated, deliveries are expedited and fuel costs are lowered. The Blockchain technology has the potential to resolve the shortage by compensating them based on productivity, ensuring that efficiency leads to the highest possible pay for truck drivers. Recruit foreign drivers. A possible solution to combat the lack of local hires due to the country’s low unemployment rates would be to recruit foreign drivers from countries with high unemployment rates and weaker currencies. This will benefit Walmart in two major ways. One, hiring foreign drivers from countries with high unemployment rates will be much easier as there will be an abundance of people looking for jobs. Since these employees leave their families back home, they will not be too concerned about missing out on family time and social life. Their main purpose of taking up jobs outside their countries is to support their families back home with their foreign earnings. Two, since these employees come from countries with weaker currencies, the value of their earnings is more and so they would be willing to work for lower wages than local truck drivers. This will significantly increase turnover and lead to higher profits for Walmart. 5 A freight company owner AlSaadi, in the Sultanate of Oman, stated that, “All the truck drivers working for him are from foreign countries.”(Personal communication, November 26th, 2018). Since their families are back home, they don’t have much of a social life to sacrifice on. They can devote maximum of their time to their work as truck drivers. AlSaadi also mentions (personal communication, November 26th, 2018) that it is advantageous to have foreign drivers as they build a community for themselves within themselves and can help each other in times of need on trucking routes. With the current emergence of freight driver monopoly, it would also be advantageous to recruit foreign truck drivers who are sponsored, i.e. whose visas are paid for by Walmart and are hence bonded to their employers in terms of sponsorship. These solutions also offer direct benefits to Walmart as they are a supplier by themselves and use their own trucks for the transport of their goods and commodities. This will enable better organization within the company and improved sales and turnover. A few minor limitations that exist with foreign recruiting involve greater time and fixed expenses required to bring employees from overseas. Walmart will have to first send recruiters to these countries to recruit and meet with potential employees in order to discuss job requirements, responsibilities and wages. Upon successful recruitment Walmart associates will have to communicate with said country embassies in order to arrange for visa and sponsorship as well as facilitate a smooth transition for the employee to the United States. Furthermore, Walmart would also be responsible for training and funding foreign truck drivers to learn truck driving in the US and obtain a state driver’s license. Although, the initial process involves a high fixed expense on the part of Walmart, since the employee is still in their training stage, this solution will offer a greater overall benefit for Walmart in the long run. Conclusion As the truck driver shortage continues to increase, it is important for Walmart to take immediate action to resolve the situation before it gets worse. As a countrywide supplier, Walmart has a good reputation in consumer loyalty and satisfaction and must strive to keep it. Increasing retail prices and empty shelves must be prevented. With the expected increase in the shortage of truck drivers in the upcoming years and the fact that unemployment rate in the USA is low, permanent and effective long-term solutions are essential to keep the business in good standing. By adopting alternative methods for recruitment of truck drivers and striving for efficient management of transportation, Walmart may be able to overcome the situation. Walmart should consider recruiting drivers from other countries in order to keep up with the demand for truck drivers in the USA and to make drivers less likely to leave the company. Last but not the least, adapting to the Blockchain technology could greatly improve the overall distribution of the company. Both solutions could help Walmart keep up with the growing economy and give them absolute advantage. 6 Recommendations ? Adopt the Blockchain Technology Adopting Blockchain technology would enlighten truck drivers about their responsibility and provide them with an incentive to complete their job. Along with transportation of goods, they will also gain information about the goods they are carrying. This will lure more people to take up jobs as truck drivers as they obtain a better experience. ? Recruit drivers from foreign countries – Talk to truck companies outside the United State and advertise the available jobs – Send a recruiter to meet with the foreign company – Meet with the drivers and interview them – Work with the country embassy for their visa and sponsorship Employing recruiters to seek truck drivers from foreign countries and collaborate with truck companies outside the USA will enable Walmart to overcome the increasing shortage of truck drivers. 7 References Burnett, R. (2018). Easing America’s truck driver shortage through Blockchain. Fleet Owner Exclusive Insight. Retrieved from https://www.fleetowner.com Davidson, P. (2018, April 26). Truck driver shortage is raising prices, delaying deliveries. USA Today. Retrieved from https://www.usatoday.com/ Distribution enters and drivers: Drivers & transportation. (2018). Walmart. Retrieved from https://careers.walmart.com/distribution-centers-and-drivers/driverstransportation Ferreira, J. (2018, November 2). United States unemployment rate. Trading Economics. Retrieved from https://tradingeconomics.com/united-states/unemployment-rate Life without trucks: The Important of the Tracking Industry. (2017, December 14) Easy Freight Factoring. Retrieved from: https://ezfreightfactoring.com/blog/worldwithout-truckers Long, H. (2018, May). America has a massive truck driver shortage. Here’s why few want an $80,000 job. The Washington Post. Retrieved from https://www.washingtonpost.com 8 Appendix A: A personal interview with a freight company in the Sultanate of Oman: Q1: What is the percent of the foreign drivers in your company? N1: All the truck drivers are from foreign countries. Q2: Why do you think they make a good employee? N2: They help each other on the road for example if any driver gets a flat tire other foreign drivers will stop to help him fix it. Q3: Do they have to be from the same country to stop help each other? N3: No, I have drivers’ from different countries and they still help each other in the road. 9 Appendix B: Burnett, R. (2018). Easing America’s truck driver shortage through Blockchain. Fleet Owner Exclusive Insight. Retrieved from https://www.fleetowner.com The article talks about Blockchain technology as a solution for truck drivers’ shortage. Blockchain is going to help use trucks more efficient. The article explains how Blockchain could give a better experience for truck drivers, which should make the job of truck driver easier. In my discussion, I would like to use it to make a point that Walmart needs to use Blockchain to make the life of driver easier. In the recommendations as a way to help drivers have a better experience and being more likely to recommend this job for others. Davidson, P. (2018, April 26). Truck driver shortage is raising prices, delaying deliveries. USA Today. Retrieved from https://www.usatoday.com/ The article talks about the shortage in truck drivers and it gives estimate for the shortage for the next 5 years from the USA truck industry. The article gives also the past years’ shortage. The articles talks about how this shortage is going to affects the market and raise the prices of almost all goods. The article also mentioned the new rule from the industry safety officials, which limit the hours drivers could drive without a break. In the background, to show how the truck industry has been in the shortage for few years and it is not getting any better. In the discussion, I would like to use the graph from the article to show that the shortage is expected to get worse in the upcoming years. Distribution enters and drivers: Drivers & transportation. (2018). Walmart. Retrieved from https://careers.walmart.com/distribution-centers-and-drivers/driverstransportation This is Walmart page that talks about how many miles Walmart trucks travel every year. They travel over 700 miles. It also gives a link for the opining jobs for truck drivers. The page also I would like to use this in my introduction as a positive start. I would also like to use it in my discussion to prove the need for drivers from the opining jobs for truck drivers. Long, H. (2018, May). America has a massive truck driver shortage. Here’s why few want an $80,000 job. The Washington Post. Retrieved from https://www.washingtonpost.com 10 The Washington post news is talking about the shortage in truck drivers. A long with that the article mention some experts’ opinions about the job. The experts were asked three equations about the job: Did you get a raise lately? Would you recommend this job?, and Is the industry in a crisis? The article talks about some of the steps that companies have already taken to recruit more truck drivers. It also mentioned a story of a person who left the company he worked for to start his own truck company. In the discussion, I would use this article to give some reasons why Walmart should consider foreign drivers. I would also use it in the background to give some experts’ ideas about the job. Taborda, J. (2018, May 10). United States unemployment rate. Trading Economics. Retrieved from https://tradingeconomics.com/united-states/unemployment-rate The website gives unemployment rate in the USA. The website also gives the past unemployment rates, and the unemployment rate in some other countries. For the unemployment rate in the USA it mention the unemployment rate for different group of people. It also includes the different type of unemployment, such as longterm unemployment. I plan to use this website in my discussion part to show that the unemployment rate is low. Therefor Walmart should try to recruit drivers from other countries where the unemployment rate is higher. 11 Purchase answer to see full attachment Explanation & Answer: 8 Slides Tags: Virtual assistant difference challenge time zones working groups working hours User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.