It has been estimated that nearly 70 percent of all freight tonnage moved in the U.S. does so via trucks. Consequently, the growing driver shortage presents challenges for supply chains. New research shows there also are significant labor shortages in some warehouses.
Analysis of the State of Logistics report from the Council of Supply Chain Management Professionals shows that by 2017, supply chain organizers in the U.S. will be more concerned with being able to find trucking container space available to haul their freight, than with the need to pay higher trucking rates, an Industrial Distribution article reports. Indeed, one of the primary challenges is that new regulatory changes include implementation of electronic logging instruments, speed-limiting and other equipment; more stringent alcohol and drug testing for drivers; and other increases in Compliance, Safety, Accountability restrictions. The stricter regulations most likely will effectively diminish the number of available drivers and trucks, and available time for turns, according to the article.
There already is a driver shortage, and new drivers aren’t entering the industry to replace retiring drivers, which makes the situation worse. Furthermore, as a result of the new regulations, Noel Perry, economist and trucking industry expert, predicts a reduction in the nation’s trucking force by 700,000 drivers, the Industrial Distribution article reports.
In the past, according to Perry, trucking capacity has been generally maintained at about 90 percent. In 2014, utilization was 100 percent of capacity, which was a crisis, Perry says. Currently, the U.S. is running at approximately 95 percent of trucking capacity. However, based on Perry’s estimates, utilization is likely to reach near 100 percent of capacity by 2016. These indicators mean that customers will be unable to get service in many cases, unless the trucking capacity shortage is offset by reduced demand due to a downturn in the economy, the article notes.
Trucking capacity isn’t the only field suffering from a critical labor shortage. Retailers are already planning for the busy holiday season, but as the unemployment rate drops, stores are having a hard time finding workers for their warehouses, a Marketplace article notes. So these companies may have shipments on the way—or already arriving—but they may be stuck in the warehouse.
If companies struggle right now to bring goods into the warehouse, then they’re definitely going to have a problem when it comes to getting them out of the warehouse, Frank Layo, a partner and retail strategist at Kurt Salmon, says in the article.
Layo says he’s heard from a couple dozen major retailers, who all are searching for warehouse workers. These companies will need to double or even quadruple their warehouse staff over the next few months so they can send products to stores, and also ship online orders, he says. The trouble, Layo adds, is that retailers say they are competing for workers who have lots of other job options, like Uber.
“The younger workforce is more interested in working on their terms, doing something that they find to be more interesting than packing boxes in a warehouse,” Layo says in the article.
Recent research from Staffing Industry Analysts, a global advisor on contingent labor, found that the issue may not be limited to warehouses, but extend to all temporary jobs created for the holiday season, a CNBC article reports. Through a monthly survey the firm issues to temporary staffing firms, it found in July that temporary roles have been harder to fill across all industries. This trend was even more pronounced in the industrial segment, which covers warehouse jobs, the firm found.
One of the largest challenges, if not the largest challenge, in recruiting both drivers and temporary warehouse labor is to offer attractive compensation. A growing number of companies say they have already increased wages, and are now considering other benefit options. There is no quick fix, but it seems both wages and benefits will need to increase to effectively recruit employees.