In an era of supply chain restraints and driver shortages, transportation companies are getting creative to fill in the labor gaps in order to get goods delivered while keeping drivers happy. One way they’re doing this is by buying up local warehouses, says one investment banker.

“Goods have to get to all parts of the country,” says New York-based Carl Marks Advisors partner Chris Parisi. He adds that drivers are demanding a better work-life balance, so now companies are being forced to shorten hauls. “It used to be a driver would drive 600 miles a day and then sleep in the cab and do it again the next day. Now companies are saying ‘how do we keep drivers in their beds at night more often?’ Everyone would rather sleep in their own bed than sleep in the cab. The only way to do that is to make the hauls a little bit shorter. And the only way to do that is to purchase other facilities. In the case of transportation, you have to buy more relay yards. Yards that are only 250 miles apart so a driver can get there and back the same day so he or she can be at home, but it requires more assets and you have to have yards in closer proximity to each other.”

In August, real estate investor GID, which has offices in Atlanta and Boston, bought an industrial warehouse in Littleton, Mass. GID’s industrial real estate investment strategy includes buying facilities that are in close proximity to customers.

Shorter hauls means less drivers and trucks on the roads, and more warehouses will require more labor. That will be tough in a market like this. But the problem isn’t new and it won’t go away anytime soon.

The U.S. has a dearth of about 80,000 drivers and that figure is on pace to hit 160,000 by 2030, according to the American Trucking Associations.

A combination of aging drivers heading into retirement, those who left the industry during the pandemic, a lack of work-life balance, and a lack of time to train new drivers are among the factors contributing to the problem.

What’s your thoughts on how to improve this driver problem? Let me know at [email protected]

– Demitri Diakantonis