Let’s get better prepared

Every year when we return from CSCMP, group news editor Jeff Berman and I compare notes to see if we agree on common themes. This year was fairly apparent. The labor shortage across all logistics job titles along with the fact that very few shippers are even remotely aware of the IMO-2020 fuel regulation changes taking effect this January were the common denominators.

With U.S. unemployment running at or near historic lows, it’s painfully clear that the labor scarcity issue has become acute across all sectors of logistics and supply chain management. According to an analysis shared by industrial real estate firm CBRE, another 452,000 warehouse and DC workers were needed in the United States during 2018 and 2019. And further validating this reality inside the four walls, MHI’s 2019 Industry Report found that hiring qualified workers was cited by logistics and warehousing executives as the single biggest challenge—with 65% rating it as “extremely challenging” or “very challenging.”

In the meantime, there’s a significant generational demographic shift that is leading to a shortage of top tier supply chain talent in our cubes and corner offices as well. The Baby Boom generation, that for decades was the cornerstone of the U.S. white-collar workforce, has given way to younger generations. According to a 2018 analysis of U.S. Census data by the Pew Research Center, more than one in three American white-collar employees is a Millennial, making them the largest generation in the U.S. labor force since 2016. But are we attracting this important group to open logistics and supply chain positions?

That was one of the questions we set out to answer in the roundtable session titled “Build Tomorrow’s Supply Chain Team Today” that I was honored to moderate. The short answer: We need to do a better job—and fast.

A clear takeaway was that today’s younger labor market requires technology solutions in the office and on the DC floor that are flexible and easy to learn. And because younger generations are accustomed to interacting with digital systems and technology, offering an organization that has either gone through, or in the midst of, its digital transformation is now table stakes to attract and maintain today’s best.

The room was in agreement that the vast majority of logistics and supply chain operations have to move faster to digitize or they’re going to quickly lose this dynamic generation to industries where technological tools are now second nature.

Another area in need of fast action: Understanding the fall out from IMO-2020. Not enough shippers are aware that the International Maritime Organization (IMO) regulations limiting sulfur content of bunker fuel to 0.5% (down from 3.5%) will take effect on January 1, 2020.

IMO-2020 is being called “the largest regulatory change in the oil space ever,” and will have a massive impact on diesel fuel prices across the board. However, in a recent Logistics Management (LM) readership survey, more than 90% of respondents told us they have “little or no awareness” of IMO-2020 and the impending regulations, and very few hands were raised at CSCMP when an audience was asked who felt prepared.

Starting on page 22, we’re offering Part II of the sneak peek at one of the most compressive white papers written on IMO-2020. We’ll be distributing the full, 20-page paper to LM readers in the coming weeks to bring you up to speed on a change that could send shock waves through the oil and fuel markets.