Chip Shortages & Transit Funding Re-Allocation

Chip Shortages & Transit Funding Re-Allocation

10:44 03 March in Uncategorized

The COVID-19 pandemic has brought about several changes and disruptions to the transportation industry. From worsening labor shortages to manufacturing delays, transit agencies had to learn to navigate around current conditions. In the beginning, the biggest problem the industry faced was a decline in passengers as stay-at-home orders went into effect. Then, concerns gradually shifted to keeping operations running with a smaller workforce and dealing with the current fleet of buses, despite a growing shortage of vehicles.

Computer Chips and Vehicle Shortage

The global chip shortage has led to complications across a multitude of industries. Semiconductor computer chips are a critical part of many of the products we rely on today, from cell phones and appliances to the cars we drive. The pandemic caused several factory shutdowns worldwide while the demand for electronics increased due to stay-at-home orders. Unfortunately, while more products were needed, factories could not create their regular supply of chips. 

With a severe backlog of semiconductor chip production, the shortage is one of the biggest crises to impact the automotive supply in some time. Both new and used vehicles are not only hard to come by, but they’re also selling at unusually high prices because of the shortage. The effects can be felt in the transportation industry as trucks and buses are in short supply. Due to the deficit, some companies have temporarily suspended bus production at their facilities. However, one bus dealership, Creative Bus Sales, has maintained a wide selection of both new and used school and transit buses despite current conditions. 

As the chip shortage persists, trucking, transportation, and manufacturing stakeholders are turning to the current administration for help by asking that the shortage be prioritized. In their December letter to President Biden and members of his cabinet, they focused on the fleet that remains unfinished due to the lack of semiconductors necessary to build and replace engines, sensors, digital displays, transmissions, and more. 

Transportation Funding

Transit agencies hope to overcome current conditions soon, especially with the passing of the infrastructure bill and the availability of grant programs to support the President’s sustainability initiatives. With the possibility of more funding on the table for the transportation sector, agencies can work to address the labor shortage by providing more incentives to attract more applicants. 

Additionally, as companies work towards decarbonization goals, transit agencies can begin to invest in modernizing their fleet. This entails buying new, electric, and hybrid vehicles and implementing new technology into their current ones that can provide better environmental benefits. High-tech solutions enable companies to understand better and measure their environmental impact.

Funding can also be allocated towards equipping buses with technology like air purification systems to improve the air quality for passengers, especially in the wake of the pandemic. Agencies can also turn to innovative solutions like real-time passenger information, automated passenger counting, and AVL to improve operations, collect valuable data, and enhance the customer experience.

Update Your Fleet with Passio Tech

Although the automotive industry is currently facing challenges, there seems to be an end. Analysts anticipate that the chip shortage will end in the second quarter of 2022. With that in mind, now is a good time for transit agencies to consider what improvements they can make to their fleet. Passio Tech provides companies with several options to help enhance their operations, increase passenger offerings, and improve efficiency. Contact us today to learn more about which innovative solution is right for your agency.