Public-private partnerships touted as answer to logistics labor woes
Industry is desperate for trained logistics employees. Governments want to create jobs. Colleges want students. When they team up on logistics workforce development, everybody wins.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
At a time when scads of logistics experts are looking for work, you'd think it would be easy to find the right people to fill logistics, distribution, and transportation positions. Yet companies still say they face a serious shortage of logistics talent. What gives?
The problem is not a scarcity of executive MBAs, and it's not about simply filling open slots with warm bodies. It's about the lack of knowledgeable, competent people to work in operations—forklift drivers, warehouse supervisors, import/export managers, and just about any other entry- and mid-level logistics position you can think of. These jobs are now viewed as integral components of a complex supply chain, and most require some understanding of technology. By all accounts, there aren't enough people who can perform those functions as they need to be performed in this era of "the perfect order." In short, the demand for logistics-savvy workers has exceeded the supply.
To address this problem, public-private partnerships focused on logistics workforce development are springing up across the country. Industry, academia, and government are collaborating to meet industry's needs while promoting economic and job growth—a formula they think will be a winner for all sides.
Mutual interests
Logistics industry groups have already tried to address the workforce issue. What's different now is the breadth of participation and the recognition that logistics is a critical player in economic development.
For example, North Carolina's Piedmont Triad Logistics and Distribution Roundtable has four objectives: land-use planning, developing the region as a global logistics hub, promoting logistics as a career path for youth, and expanding logistics education programs. The Columbus (Ohio) Region Logistics Council's objectives include fostering a "logistics-friendly" business environment, improving logistics infrastructure, bringing more logistics technology to regional industry, and developing a highly skilled logistics workforce.
These and other public-private groups typically include employers (such as shippers, carriers, and third-party logistics companies), academic institutions, economic development agencies, and local or state governments. All have a vested interest in a knowledgeable logistics workforce. Employers need skilled workers who understand day-to-day operations. Governments want to create jobs—and logistics is one field where jobs are likely to grow. Economic development agencies want to attract business, and a pool of well-trained workers is a powerful incentive. And academic institutions are looking to expand their offerings and serve more students.
Each of these groups brings something to the table, says John Ness, president of ODW Logistics and co-chair of the Columbus Region Logistics Council. "We have learned a lot from the failure of freight-only or private industry-only initiatives that are out of touch with what government, technology, and academia are doing to advance their individual causes for the region's overall benefit," he says.
Leaders of workforce initiatives stress the importance of harnessing the resources of a chamber of commerce or other economic development agency. "We get access to an engine we wouldn't have on our own: the chamber's established process for driving change and influencing government," says Ness, whose group is supported by the Columbus Chamber of Commerce. Both the Columbus Chamber and the Greensboro, N.C.-based Piedmont Triad Partnership, the business development group spearheading that region's logistics initiative, have hired logistics experts to help turn ideas into economic reality.
Not all such public-private groups are local. The state of Michigan recently launched the Michigan Supply Chain Management Development Commission; commissioners include representatives from industry, government, and academia appointed by Gov. Jennifer Granholm. The commission's goal is to influence state transportation and economic development policies. Its immediate task is to develop a statewide plan for attracting, supporting, marketing, and growing the international trade, supply chain, and logistics sectors. Workforce development will be a key component of that effort. That's a natural focus in a state whose economy depends on manufacturing, says commission member John A. Evans, president of Evans Distribution Systems. "In order to have a good environment to encourage manufacturing development, you need good logistics and supply chain management. In order to have good logistics and supply chain capabilities, you need industry. They rely on each other."
Making progress
A look at a few of the public-private logistics workforce initiatives now under way offers a glimpse of how different constituencies are collaborating:
In North Carolina, the Piedmont Triad Partnership has announced plans to build the Piedmont Triad Center for Global Logistics, which will be housed at a new facility at Guilford Technical Community College in Greensboro. Nearly 20 community colleges and four-year colleges and universities, along with shippers, carriers, and business development organizations, are involved in developing certificate, degree, and continuing education programs.
Workforce Florida Inc., an agency that oversees the state's workforce policies, programs, and services, established the Employ Florida Banner Center for Logistics & Distribution. Three educational institutions that operate the center collaborate with a consortium of five other public and private organizations. The center's advisory council includes operations managers from shippers, carriers, ports, and third-party logistics service providers (3PLs) as well as representatives of economic development agencies and the participating colleges and universities.
A diverse group of government agencies, private businesses, and community colleges in the Dallas-Fort Worth area have joined forces to develop a Certified Logistics Associate and Certified Logistics Technician credentialing program. The certifications, designed for both high school and community college students, are administered by the Manufacturing Skill Standards Council. The national training center for certification program instructors is the Tarrant County College Corporate Training Center located at the Alliance Global Logistics Hub.
The Columbus Region Logistics Council's workforce committee provides a forum for businesses to discuss training and skills requirements and learn about logistics education resources in the area. The group also works with educators to develop relevant curricula and helps employment organizations understand logistics career paths.
The logistics advantage
In all of these programs, industry's input continues to be critical. Shippers, carriers, 3PLs, and other companies know what logistics skills are in short supply now and what their businesses will need in the future.
Academic institutions are listening. Community colleges, with their focus on practical application of knowledge, are playing a leading role in logistics curriculum development. They consult with both line managers and senior executives to ensure their course offerings are relevant. "The pattern starts with industry's needs, and we develop a curriculum around that," explains Columbus State Community College professor Mary Vaughn, co-chair of the Columbus Region Logistics Council's workforce development committee.
Ultimately, public-private logistics workforce initiatives will benefit the economy as a whole, many believe. It's not hard to see why: "We're in a unique economic situation, transforming from manufacturing to services," says Mark Richards, vice president of Associated Warehouses Inc. and a former chairman of the Council of Supply Chain Management Professionals. "That doesn't change the need for logistics expertise. Regardless of where a product comes from, as a country, we have to be sure we have the most efficient supply chain to maintain our competitive advantage."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.