Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The warehouse and distribution center (DC) industry is facing its most severe labor shortage since 2007,
a potential crisis that could affect peak holiday season fulfillment operations and carry over well into next year
and beyond, according to ProLogistix, a firm that provides staffing services for warehouses and DCs.
Brian Devine, president of Atlanta-based ProLogistix, which for 15 years has conducted an annual survey of warehouse
and DC labor trends, said his company and rival firms are having trouble finding qualified applicants to staff their clients'
warehouses as they ramp up for the holiday crunch. Three out of every four applicants never make it to interviews due to
drug-related offenses or criminal histories, among other problems, Devine said. But even the total pool of warehouse applicants
has been diminishing, Devine said.
At the same time, wages in the past three months have increased much faster than Devine said he had anticipated.
Initially, Devine thought wages would rise in 25-cent-an-hour increments per quarter, resulting in a $1.00- to $1.25-an-hour
increase over the next 12 to 18 months. Instead, wages are rising at levels that will result in pay gains of up to $2.00 an hour
over that same period, he said. The sudden changes in wage trends will force many warehouse and DC managers to revise their 2014
and 2015 budgets to account for higher labor costs, Devine said. Most ProLogistix clients are aware of the problem and are taking
steps to adjust, albeit reluctantly, he said.
Devine said he expected some level of increase because warehouse wages have been virtually flat for about a decade. For example,
a forklift operator, on average, earns about 25 cents an hour more today than in 2004, Devine said. As far as forklift operators
are concerned, the greatest demand today is for tech-savvy workers who are comfortable around machines that have become more
automated, Devine said.
The shortage of qualified warehouse labor is likely to persist long after the holidays, Devine said. He couldn't comment on
whether this would become a multiyear trend, saying his firm's forecasting capabilities don't extend out that far.
The explosive top-line growth of Amazon.com and its voracious appetite for fulfillment labor is a factor leading to tight
supply across the system, according to Devine. However, he said the segment would be confronting a labor shortage even if Amazon
didn't exist, adding that firms were scrambling for labor eight to ten years ago when Amazon was not nearly the potent force it is
today. Seattle-based Amazon, the world's largest e-tailer, has not announced its peak fulfillment staffing levels.
ProLogistix, which touts itself as the largest staffing firm dedicated to warehouse and DC labor, employs about 12,000 workers.
Many of them start as provisional employees who hope to become permanent once they complete a trial period at a ProLogistix client.
The workers remain on ProLogistix's payroll even if they become permanent workers at a client's location.
The immediate concern is the pre-holiday shipping season, when retailers, on average, increase warehouse and DC staffing by
43 percent in the three months leading up to Christmas. Devine worries that there aren't enough workers to meet the burgeoning
fulfillment demand. Even collaborative efforts with competitors to meet staffing levels are falling short, he added. "A customer
needs 20 workers. We have 12. I contact a competitor to see if it can fill the remaining 8 vacancies, and they only have four
candidates," he said in a phone interview.
WAGE RUN-UP
Due to the tight supply, companies that have yet to bump up workers' wages, or don't do it soon, could lose workers as they jump
to other jobs paying 50 cents or $1 more an hour for pre-holiday work, Devine said. "There will be a lot of plundering" leading up
to the peak of the holiday fulfillment period, he said.
Gilt Groupe, a fast-growing online shopping company headquartered in New York, is experiencing a tight labor market around its
main fulfillment facilities in Louisville, Ky. "There is a lot of competition [for workers] in this geography," said Michelle
Ball, Gilt's senior professional of human resources, in a phone interview from Louisville where she is based. Gilt's Louisville
operation consists of a 302,000-square-foot fulfillment center and a separate 100,000-square-foot location. It also manages
facilities in Brooklyn, N.Y., and Las Vegas that are used mostly for cross-docking activities.
In an effort to widen its recruiting channels, Gilt, for the first time in its seven-year history, will perform in-house hiring
to augment the work of its outside agencies, Ball said. It has yet to see the need to offer higher wages as a mechanism to attract
or retain DC labor, she said.
Gilt employs 400 folks full time in Louisville year-round. During most of the year, the ratio of temporary workers to
full-timers is about 35 percent; the ratio will swell to 50 to 60 percent as the company nears the height of the peak season. Last
year, Gilt's peak fell on the day after Thanksgiving, which has become known as "Black Friday" for the shopping frenzy that ensues
on that day. Ball estimates that 700 full- and part-time workers will be on the job in Louisville at the peak of its holiday
period.
UPS Inc.,
which plans to hire 95,000 seasonal workers—many at its main global air hub in Louisville known as
"Worldport"—is so far having no problems attracting applicants, according to Susan L. Rosenberg, a company spokeswoman. "The
application flow has actually been quite good," she said. UPS has seasonal workers that return year-after-year just for the
holiday period, Rosenberg said. The company has been successful in hiring returning veterans for seasonal work, according to
Rosenberg. A portion of those workers transition into full-time jobs with the company, she added. UPS has also formalized a
long-held practice of reaching out for retirees who might be interested in serving as driver coordinators and trainers during the peak period, she said.
UPS, which suffered a hit to its reputation during last year's holiday as a last-minute deluge of online shipments clogged its
system and led to delivery delays, has taken various steps to avoid a repeat this holiday. One of the most significant is that it
will operate its full U.S. air and ground network on the day after Thanksgiving, the first time in its 107-year history it will do
that.
A WORKFORCE STRATEGY
Devine advises clients to develop what he calls a peak-season workforce strategy. First, they should determine how many of the
warehouse and DC positions are mission-critical and take all steps necessary to keep those workers from leaving. He suggested that
companies, whenever practical, split full-time positions into two part-time slots and allow workers to share those slots to give
each worker extra hours. Devine also recommended that employers consider incentives such as a "perfect attendance" bonus during
the busiest peak period that would pay workers an additional $2 an hour.
Devine characterized his business as the "tip of the spear" of the U.S. economic cycle. Part-time workers are usually the first
hired when the economy emerges from recession because businesses need additional labor but are reluctant to commit to full-time
help. Part-timers are also the first to be let go at the start of a downturn because it is easier to shed those workers as part
of a downsizing move. The labor tightness in Devine's part of the world indicates that the "economy is stronger than it might
otherwise feel," he said.
Devine added that the higher wage costs could have a silver lining: It could help attract and retain workers that would either
not be interested in the industry or might go to another field in search of more money.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”