Key Takeaways

10 million job openings in the U.S.—with only 5.7 million unemployed workers
340,000 UPS workers threaten to strike
90% of TL carriers raised pay, but the sector faces the second most vacancies ever
90% of large industrial markets have more unemployed former warehouse workers than the national unemployment rate

Supply chain organizations struggle to source labor and fill job vacancies in a tight industrial market.

“We hear every day from our member companies—every size and industry across nearly every state—they’re facing unprecedented challenges trying to find enough workers to fill open jobs,” said Stephanie Ferguson of the US Chamber of Commerce. “Right now, the latest data shows that we have over 10 million job openings in the US—but only 5.7 million unemployed workers.”

Supply chain labor #

The tight labor market resulted in unusual worker shortages across the supply chain over the past year, giving workers more leverage with employers. Here is a node-by-node look at the labor situation.

Parcel labor #

UPS workers prepare to strike after failed negotiations between Teamsters and the parcel giant. Around 340,000 employees intend to leave the job if the company does not meet conditions.

A strike would create massive disruptions for UPS’ network, which handles millions of packages daily. Due to shipper concerns, many have diverted volume to other carriers in Q1.

Rival FedEx capitalized on the situation and urged customers to shift volumes from UPS to avoid possible strike issues. FedEx does not face labor dispute issues, but it did combine its express and ground networks.

Its LTL services are the only arm of the business that will remain independent. A smooth consolidation process could allow FedEx to challenge the already integrated UPS.

Trucking market labor #

Analysts have long seen the driver labor pool as one of the biggest issues in the logistics industry—and it’s not improving. More than 90% of TL carriers raised pay, but the sector faces the second most vacancies ever.

Long-haul trucking is considered one of the most dangerous professions in America. Nearly a third of the 3.5 million truck drivers in the United States will be involved in a serious road accident at some point. The high average age of drivers, the industry’s failure to recruit more women, long-haul trucking lifestyle disadvantages, drug tests and inadequate truck parking are among the primary contributors to vacant positions.

Ocean freight labor #

Tensions continue to rise in dockworker negotiations that started last year. Employers blame dockworkers for delays as talks go into their tenth month.

Port disruptions force shippers to reroute ocean freight. This movement caused the Los Angeles and Long Beach Ports to lose market share.

Warehouse labor #

Seventy-three percent of warehouse operators can’t find enough workers. In nine of ten large industrial markets, unemployed former warehouse workers significantly exceeded the national unemployment rate.

Some reasons workers avoid warehouse employment:

Physically demanding position
Lower-than-expected pay
Health-related concerns
Lack of childcare
Unclear career trajectory

“The relatively large percentage of unemployed ex-warehouse workers, even in a climate of strong macro demand, plentiful job openings and rising wages, indicates that for reasons ranging from still-inadequate wage levels and health-related concerns to child care, generous unemployment benefits and the lack of available transit options to and from warehouses, many workers have left the field and have stayed away”, said Lisa deNight, Newmark’s director of national industrial research.

What to do about the supply chain labor shortage #

As the supply chain industry evolves to meet changing consumer demands, insights and data are increasingly important. Visibility into labor issues and how they affect key supply chain processes are vital.

Improving wages and benefits isn’t enough to hire and retain a robust workforce. Leading companies increase efficiency with fewer workers. Some employ automated solutions to augment positions’ physical demands. However, these are often cost-prohibitive and require extensive Capex.

Many supply chain leaders leverage existing logistics solutions to solve the open labor marketplace. Look to the right logistics partnerships to build and refine a flexible, repeatable supply chain solution.