Truck Driver Shortage Creating Supply Chain Challenge for US Businesses

Truck Driver Shortage Creating Supply Chain Challenge for US Businesses

The rapid growth of e-commerce, a strengthening economy, and a rebounding in consumer spending habits have caused a spike in demand in the US trucking industry over the past few years. At the same time as the need for their services is growing, however, the country is facing a shortage of truck drivers, Kirsten Korosec reports at Fortune, with an aging population of drivers exiting the workforce and fewer young Americans willing to sign up for long, lonely hours on the road:

The pain point is specific. The industry calls them “full-truckload, over-the-road nonlocal drivers,” jargon for drivers who haul goods over long distances, often days, if not weeks, before returning home. That lifestyle just isn’t attracting millennials and the incoming Gen Z cohort who place a greater emphasis on work/life balance.

The long-haul sector, which employs around 500,000, was in need of nearly 51,000 truck drivers by the end of 2017, the worst shortage it had ever seen. The lack of qualified drivers—some trucking companies have complained only 1% to 2% of applicants meet their requirements—has businesses competing for the same pool of workers.

The shortage is creating a ripple effect. Companies vying for qualified workers are offering higher pay and signing bonuses. The median pay for drivers in this category is $59,000, according to the ATA. Experienced drivers who work for private fleets can make as much as $86,000 a year.

The truck driver shortage is not new: At CEB, now Gartner, our State of the Labor Market report for the US late last year showed that heavy and tractor-trailer truck drivers had the highest demand of all occupations, followed by registered nurses. Demand for trucking skills has been growing rapidly, but with experienced drivers retiring and not being replaced by new talent, the segment of the labor market with this skill is very small. (CEB Recruiting Leadership Council members can read the full report here.)

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Teamsters Seek Protection Against Automation in UPS Contract

Teamsters Seek Protection Against Automation in UPS Contract

In the round of contract negotiations that began last week between the Teamsters Union and UPS, one of the union’s key demands is a pledge by the parcel delivery company not to use drones, driverless cars, or other automated technologies to do their jobs, Paul Ziobro reported at the Wall Street Journal. Negotiations over the collective bargaining agreement, which covers some 260,000 UPS employees, come at a time when e-commerce has drastically increased demand for more, better, faster delivery services, and UPS and its competitors are trying to keep pace.

In their 83-page draft of the updated contract, the Teamsters are also demanding a ban on deliveries after 9:00 p.m. and a commitment to hire another 10,000 workers, as well as safeguards allowing employees to refuse to work in unsafe conditions or overloaded trucks. The union is driving a hard bargain, as the labor market is tight and delivery companies are already having a hard time finding the workers they need.

Indeed, even as technology drives up demand for new roles in high-tech fields like software engineering and data science, the explosion of online retail is also expanding the market for warehouse and logistics workers to fulfill all those orders. Our research at CEB, now Gartner, bears out this trend: Our 2017 State of the Labor Market report, which CEB Recruiting Leadership Council members can access here, found that tractor-trailer driver was among the fastest-growing jobs in the US between 2016 and 2017, even as the scramble for tech talent captured the headlines.

Given the widespread concern that new technologies will displace millions of workers in routine jobs like transportation, it’s not surprising to see this issue come up in a union contract negotiation—and this won’t be the only time it does.

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Holiday Hiring Is Up as E-Commerce Collects Warehouse and Logistics Workers

Holiday Hiring Is Up as E-Commerce Collects Warehouse and Logistics Workers

Corporate recruiting efforts are already in full swing to make sure the shelves are stocked during this year’s holiday season. Jennifer Smith of the Wall Street Journal reports that some US companies initially posted holiday openings as early as July, with many anticipating an increased need for warehouse and fulfillment workers.

With unemployment at its lowest in years, businesses have been forced to up the ante for seasonal workers, increasing wages, offering greater flexibility, and even transportation support. Smith reports that Macy’s is hiring 20 percent more seasonal workers than last year, as is XPO Logistics, a company with numerous e-commerce clients.

The fact that warehouse and logistics workers are the primary focus of hiring is indicative of increased online orders and declining in-store sales. The Journal reported that online retail sales rose 13 percent in November and December of 2016 while department stores saw a 7 percent drop in sales.

Warehouse hiring has gone up 31,000 over the past year and accounted for 951,000 jobs in August, meaning wages will likely to continue to grow given the shift in retail operations from in-store labor to fulfillment and facilities. Smith cites data from logistics staffing firm ProLogistix showing that the entry-level pay for warehouse workers is expected to be $13.68, a 10 percent increase from non-peak wages and a 5 percent increase from last year.

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Amazon Aims to Fill 50,000 Warehouse Jobs in One Day, Boosting Labor Force Alongside Robots

Amazon Aims to Fill 50,000 Warehouse Jobs in One Day, Boosting Labor Force Alongside Robots

Many observers of technology trends fear that robots will displace human workers on a massive scale, but more optimistic voices contend that the ongoing revolution in workplace automation will create many more jobs than it destroys. Amazon’s experience is a point in the optimists’ favor: Even as the online retail giant has invested extensively in its robot workforce, it is also rapidly expanding its human workforce. In January, Amazon announced plans to hire 100,000 more employees in the US by mid-2018, which would grow its workforce by over 50 percent to more than 280,000 employees.

Six months later, the company is on its way to meeting that goal, GeekWire’s Nat Levy reports, pointing to Amazon’s latest quarterly earnings statement showing that it added 31,000 employees worldwide in the last quarter, bringing its total global workforce to 382,400 people:

Amazon reports its headcount as part of its quarterly earnings statements, and so far in 2017, Amazon has hired about 41,000 people. In the last 12 months it has added 113,500 people worldwide. For perspective, Amazon’s global workforce is roughly equivalent to the population of Cleveland, and it has added approximately a Billings, Mont., worth of people in the last year. All this hiring doesn’t mean Amazon is slowing down. On its website, the company is listing more than 19,800 open positions.

In fact, Amazon is looking to hire another 50,000 employees in one massive day of job fairs next week, Levy’s colleague Taylor Soper noted earlier this week:

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