US Transport Hiring Rises, but Not at Warehouses - Effect on Logistics Companies
In the second quarter of 2022, the US transportation and warehousing industries hired a lot of new people quickly. This trend is still strong, but some industries, especially warehousing, are showing signs of slowing down.
The present labor scarcity impacts many businesses, but none more so than the e-commerce fulfillment and transportation industries. Employers in the e-commerce sector are having trouble filling package-shipping positions because of rising demand.
According to data from the US Department of Labor, the employment of trucking has increased by 77,600 since March, while the employment of warehousing has decreased by 21,000 jobs.
Many firms are feeling the consequences of the labor shortage. The cost of conducting business rises when companies boost pay to compete for talent. The supply chain is also experiencing delays and interruptions as a result of the shortage of labor. In this article, we’ll look at how the scarcity of labor at warehouses is having an adverse effect on logistics companies and what it means for the future of the economy.
Reasons for the Workforce Shortage
The present lack of available workers is having an impact on the eCommerce fulfillment and transportation businesses. Changes in the population, rising living standards, and a lack of educational opportunities are all major factors.
There are fewer people of working age to fill these positions as the population ages. Yet, the unemployment rate has dropped dramatically within the same time period. It implies that more individuals may get government assistance, such as medical care and child care, which might compel them to stay at home instead of working.
Many people also lack the most up-to-date skills required by employers. Training programs haven’t been able to keep up with the increased demand for qualified workers in recent years. Because of this, there is already and will be an even greater deficit of skilled labor in the future.
The economic effects of the current labor market situation are substantial. It’s been difficult for e-commerce fulfillment centers to hire enough people to handle the rush of orders, and trucking firms have seen their rates and delivery times rise as a result. Firms would be wise to be ready now since the situation is only going to get worse before it improves.
The Effects of a Labor Crisis
The most valuable resource for a business is its workforce. They are crucial to your company’s success, particularly when it comes to expanding operations and optimizing procedures.
A labor shortage reduces your recruitment options and lowers the productivity of your present employees. Even interns count towards maintaining the efficiency of supply systems. Let’s look at what this entails for logistics companies.
Delay in Delivery
To start moving items through the supply chain more swiftly than before, businesses need to get them into manufacturing or storage as soon as possible. Businesses have fallen behind schedule by days, weeks, or even months, depending on the product, as a result of having to purchase more expensive equipment due to a lack of manufacturing workers.
Supply Chain Breaks Down
The success of a supply chain depends on the coordinated efforts of a large number of participants. If a link in the chain fails, it may have a domino effect on businesses all over the globe. Some stores have run out of merchandise because of a shortage in the supply chain caused by a bottleneck in the logistics sector (such as warehouses), which has resulted from delays in delivering products from producers to distributors.
Industry Perspectives
The labor shortage is having a significant impact on eCommerce fulfillment and logistics companies. The supply chain is experiencing delays and interruptions due to the difficulty employers are having in filling unfilled jobs. What happens with labor storage in each sector given that the situation is probably going to get worse?
eCommerce Fulfillment
Due to the high volume of orders, e-commerce fulfillment centers are having trouble hiring adequate staff. To attract labor, several centers were compelled to boost pay. Consequently, several facilities have increased pay in order to compete for employees. It has raised company expenses and slowed down customer deliveries.
Order Fulfillment
Manpower scarcity has an effect in this sector as well. Finding individuals who can rapidly and effectively pack things is a challenge for businesses. It may result in a delay in sending goods to customers, resulting in lost sales.
Additionally, the retail sector is experiencing an employment crisis that affects both firms and customers. Finding adequate workers is a challenge at all points in the supply chain, and sourcing is difficult for the storage, transportation, and e-commerce divisions. This problem will only get worse as merchants move into new fields while still meeting the needs of online shoppers.
To keep their present staff and avoid this problem becoming worse in the future, companies in all supply chain industries need to take action.
Vineyard Brokerage
Vineyard Brokerage specializes in all kinds of loads, from heavy hauling to partial loads. Supply chain management is made easier with Vineyard Brokerage’ individualized logistics services across the United States and Canada. We are one of the most trusted freight broker trucking companies in the U.S., and we can help your business reach its goals by giving you supply chain solutions that are efficient and save money.
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