LM    Topics     Warehouse    Warehouse

Logistics Labor 2020: Filling the void

As the business world shakes off the impacts of COVID-19 and executes plans for the future, the logistics sector is providing new opportunities for displaced workers from other industries. For logistics managers, now is the time to find talent that wasn’t accessible in the tight labor market.

Right up until mid-March, the logistics labor shortage was being fueled by a historically low national unemployment rate and a lack of both skilled and semi-skilled workers. The global pandemic swept in and quickly changed the scenario, driving overall unemployment rates up to historic highs and forcing many companies to lay-off and furlough workers.

And while warehouses and DCs clearly continued to fulfill their critical roles in getting both essential and non-essential goods to end users, few corners of the business world escaped COVID-19’s wrath. In April, The Wall Street Journal reported that warehousing and storage operators had hired 8,200 new workers in March, effectively “defying the steep employment downturn in the American economy.” By May, the logistics-related labor reports were following the national trend, with some companies reporting layoffs and others temporarily freezing hiring activity.

Some companies are already leveraging the fresh crop of entry-level and experienced workers that are now available and ready to work—a task that would have been difficult earlier this year, when the national unemployment rate was just 3.5%. In March, for example, Amazon announced that it was hiring 175,000 new workers to help run its fulfillment and delivery network. By May, the company had reportedly filled all of those positions.

“Companies are definitely starting to look at how they can upskill or find talent that they couldn’t access in the tight labor market,” says Tisha Danehl, vice president of strategy and professional recruitment, North America, at The Adecco Group in Chicago. “The flood gates aren’t opening yet, but some firms are exploring their options on the permanent hire/direct hire side of the market versus temporary employment.”

For now, Danehl says logistics and supply chain organizations are focusing on their most critical labor needs and centering on positions that were difficult to fill pre-COVID. She’s also seeing more hiring activity within essential industries (e.g., the production and/or distribution of personal protective equipment, hand sanitizer, cleaning products, and groceries). “We haven’t seen much of a hiring slowdown for these types of businesses,” she points out, “and as a matter of fact, those companies are the most active hirers right now.”

Helping displaced workers

Abe Eshkenazi, CEO at the Association for Supply Chain Management (ASCM), says that the spikes in supply and demand spurred on by the pandemic have made it difficult for warehouse and DC operators to project their labor needs. Uncertainty over what could be coming around the next corner isn’t helping either, he adds, nor are the social distancing rules and the new safety precautions that companies have to take in the post-COVID world.

To help, ASCM has been working with associations like the National Retail Federation and the National Restaurant Association to see how employees in those sectors can be transitioned to logistics jobs. “It aims to help these unemployed individuals get up to speed on warehouse, logistics and distribution work with the goal of getting them back on the payroll,” says Eshkenazi.

According to Eshkenazi, the effort will require some re-skilling, but notes that warehouse and distribution jobs typically have low barriers to entry, making them a good choice for displaced workers from the restaurant and retail sectors. “We’re co-distributing content for NRF and its workers on how to prepare yourself for different types of logistics jobs,” Eshkenazi adds, “where there are good opportunities right now for interested individuals.”

The race to automation

Long before COVID reared its ugly head, companies in the distribution and fulfillment arenas were investing in automated solutions that could help them work more efficiently and be more productive using current staffing levels. Augmenting their human workforces with co-bots, automated storage and retrieval systems (AS/RS), and other advanced tools, some companies were well on their way to winning the race to automate.

“Everyone was talking about robotics,” says Rick Blasgen, president and CEO of the Council of Supply Chain Management Professionals (CSCMP), who expects those conversations to continue, despite the fact that labor may remain fairly accessible over the coming months or years. “We can assume that when the pandemic threat is over, many people who are out of work now are going to go back to work at the same jobs that they had pre-COVID.”

When that happens, Blasgen expects attention to be turned back to automated solutions and doesn’t expect companies to go back to “throwing more people at the problem,” like they did 10 or 20 years ago. Concurrently, he says issues like the truck driver shortage will likely resurface, namely because veteran drivers continue to retire while younger candidates shy away from such demanding jobs.

Blasgen says CSCMP has been producing numerous webinars in response to COVID, and is helping its manufacturing and retail members deal with some of their biggest challenges. And while there’s an air of uncertainty about the future of the economy and labor market right now, Blasgen cautions shippers not to assume there will be a plethora of workers to choose from in the post-COVID world.

“Unfortunately, there will be shifts in labor for restaurateurs and others that just can’t ‘open back up,’ but the Amazons of the world will likely scoop that labor up,” says Blasgen. “In my opinion, there will still be a battle for labor and a push to automate when we come out of this.”

Stepping up to the plate

Looking ahead, Danehl says that we could see a shift over to more “local commerce” and a world that’s less global in nature. She says some logistics service providers have already started ramping up their hiring in response to this trend, which could find more companies operating domestically instead of working with extended, overseas supply chains.

To companies that are shaping their logistics hiring strategies for the second half of the year, Danehl says that now is a great time to spread the word about those open positions. Even someone who’s currently employed may be looking to make a move to a better opportunity and can be a great candidate for your team.

A manager who was dissatisfied with his or her company’s overall response to the pandemic, for example, may want to make a fresh start with an organization that performed better in this area. This is a reality that all companies should keep in mind as they look to retain their logistics labor forces, says Danehl, who sees corporate culture becoming an even more important part of the employee retention conversation in the post-COVID world.

“Logistics professionals should continue looking at their talent acquisition strategies, company cultures, and exactly what they’re doing to attract talent that they may not have had access to before,” says Danehl, who cautions companies not to assume that a recently-laid-off worker wasn’t meeting the employer’s expectations. “A lot of companies used the ‘last in, first out’ approach when cutting staff, which means there could be some good, available talent out there right now.”

Keep a positive outlook

As he assesses the current logistics labor market and looks ahead at what’s coming next, Tom Derry, CEO at the Institute for Supply Management (ISM) expects technology to continue playing a prominent role in all aspects of the logistics process. “That means everything from more automation and robotics in DCs and warehouses,” says Derry, “to scheduling, transportation, and freight-forwarding applications for international trade.”

Derry is also keeping his eye on the U.S. manufacturing sector, and says if it contracts then it could drive down demand for logistics labor. “Manufacturing only makes up 11% to 12% of the U.S. economy today,” he points out. “If that declines further, there will be fewer people moving those goods from the manufacturing center to warehouses to DCs and, ultimately, to the consumer.”

Despite the disruption that companies endured during the first half of 2020, Derry is somewhat bullish on what lies ahead for the remainder of the year and into 2021. He says a COVID vaccine and more widespread testing—the latter of which will help more employees return to work with confidence, and more companies restart their engines—are the two variables that will have the biggest impacts.

“The U.S. economy was strong going into this,” says Derry, “so if those two things happen there’s no reason why we can return to a very ‘normal’ scenario pretty quickly during the second half of the year.”

Article Topics

Magazine Archive
Labor Management
Warehouse DC
   All topics

Warehouse News & Resources

Uber Freight heralds various new customer-focused supply chain technology offerings
Prologis and Home Depot leadership address the capabilities of AI for logistics
Prologis research paper examines impact of various technologies on logistics real estate efficiency
Logistics services providers and shippers call out for seasonal help
Combating Supply Chain Chaos: 13 Tips from the Camcode Barcoding Playbook
August retail sales see slight gains, reports Commerce and NRF
GXO announces plans to acquire PFSweb
More Warehouse

Latest in Logistics

Uber Freight heralds various new customer-focused supply chain technology offerings
U.S. rail carload and intermodal volumes are up, for week of September 23, reports AAR
FTR Shipper Conditions Index takes a step back, from June to July
Prologis and Home Depot leadership address the capabilities of AI for logistics
ShipStation report examines holiday season shopping preferences
UPS preps to acquire MNX Global Logistics
Prologis research paper examines impact of various technologies on logistics real estate efficiency
More Logistics

About the Author

Bridget McCrea's avatar
Bridget McCrea
Bridget McCrea is an Editor at Large for Modern Materials Handling and a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996 and has covered all aspects of the industry for Modern Materials Handling, Logistics Management and Supply Chain Management Review. She can be reached at [email protected] , or on Twitter @BridgetMcCrea
Follow Modern Materials Handling on FaceBook

Subscribe to Logistics Management Magazine

Subscribe today!
Not a subscriber? Sign up today!
Subscribe today. It's FREE.
Find out what the world's most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today.

September 2023 Logistics Management

September 6, 2023 · Logistics operations are facing a human capital crisis that poses a threat to both performance and competitiveness. In this year’s study, our authors explore how organizations can compete for talent in an increasingly limited talent pool; how organizations are competing in an increasingly dynamic business environment; and examine the technologies that shippers now need to use to stay ahead of the curve.

Latest Resources

Do More with the Same in Logistics and Distribution
Download this new white paper to learn best-practice strategies that can help your company do more with the same — optimizing your workforce to weather the current economic climate and pave a successful path forward.
Managing Global Complexity for the Long Term
Motor Freight Special Issue: Finding a way back to “normal”
More resources

Latest Resources

Driving ROI with Better Routing, Scheduling and Fleet Management
Driving ROI with Better Routing, Scheduling and Fleet Management
Improve efficiency and drive ROI with better vehicle routing, scheduling and fleet management solutions. Download our report to find out how.
Your Road Guide to Worry-Free Shipping Between the U.S. and Canada
Your Road Guide to Worry-Free Shipping Between the U.S. and Canada
Get expert guidance and best practices to help you navigate the cross-border shipping process with ease. Download our free white paper today!

Warehouse/DC Automation & Technology: It’s “go time” for investment
Warehouse/DC Automation & Technology: It’s “go time” for investment
In our latest Special Digital Issue, Logistics Management has curated several feature stories that neatly encapsulate the rise of automated systems and...
Why accurate, real-time location data is a must for efficient operations
Why accurate, real-time location data is a must for efficient operations
Find out how next-generation workforce management apps use accurate, real-time location data to power successful operations in this webinar with Radar CEO...
Should you lease or buy your lift truck fleet?
Should you lease or buy your lift truck fleet?
Leasing critical equipment like lift trucks can offer flexibility, but some lease terms can be complex and costly if you’re not...