Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Peak season is upon us, and warehouse managers everywhere are revving up their fulfillment operations for the crush of holiday orders. The effort to slot, sort, and ship all that merchandise calls for a classic "all hands on deck" approach, including the hiring of extra workers to get the job done.
But for businesses planning for the 2019 peak, there's one major problem—the U.S. economy is in the midst of a historic labor shortage that's making it difficult for many DCs to find enough workers to fill their shifts. The U.S. Labor Department reported last month that the nation's unemployment rate had sunk to 3.5% in September, a nearly 50-year low.
At the same time, the demand for labor has never been higher. Burgeoning e-commerce demand is changing the nature of fulfillment work. In addition to filling the traditional bulk store-replenishment orders, warehouses today are increasingly called on to pack and ship individual consumer orders—a more labor-intensive process. And consumers accustomed to next-day delivery service expect those orders to arrive at lightning speed.
Caught between those two trends, warehouse and DC managers are turning to a number of unconventional approaches. Some are offering part-time shifts in a bid to tap nontraditional labor pools, like college students or stay-at-home parents working at night. Others are experimenting with flexible schedules, like four-day workweeks with 10-hour shifts. Still others are experimenting with creative ways to apply an old tool—their labor management software (LMS).
MORE CARROT, LESS STICK
Since its introduction decades ago, labor management software has become a standard tool for managing human resources within a warehouse or DC, offering companies a neutral method of tracking the work output of their employees. While the methodology hasn't changed much over the years, companies today are using the data collected by the software in new and different ways.
For example, in the not-so-distant past, employers commonly used their LMS data to identify underperforming workers so they could essentially cull the herd. "It used to be that every month, businesses would get rid of their bottom 10% and replace them with new people," says Peter Schnorbach, senior director for product management at Manhattan Associates, a developer of LMS and other supply chain software. "That doesn't work anymore, because you can't replace them."
Nowadays, the focus has shifted from performance improvement to employee retention. Among other things, that means warehouse and DC leaders are more likely to be using their LMS data to identify the top performers than the laggards. It's all part of a push to boost "employee engagement"—and by extension, retention. Workers identified as top performers are often rewarded with perks like prime parking spots, lunch with a top manager, or extra compensation. One Manhattan Associates customer brings a large wheel into its DC once a month, calls its top performers up to the stage, and lets them take a roulette-style spin to win various prizes, like the TV show "Wheel of Fortune."
But identifying those top performers isn't always as cut-and-dried as it might sound. In many warehouse operations, no two tasks are exactly alike, making it tough to draw apples-to-apples comparisons. For instance, it would be unfair to compare two workers on the basis of orders picked per hour if Worker A collected them all from a single aisle, while Worker B was forced to travel throughout an 800,000-square-foot DC.
In a bid to correct such inequities, a number of companies have begun adding warehouse "telematics" data— data collected remotely from forklifts and other warehouse equipment—to the mix, analyzing it along with the standard worker productivity measures.
"Everything is creating data these days," says Derrick Miller, enterprise solutions manager at The Raymond Corp., a lift truck vendor that also provides fleet management and labor management software. "LMS has traditionally been only about tracking how many pallets Carl touched, or how many crates Susan lifted. But you can also generate data from lift trucks and conveyor systems, or even track when employees use shrink-wrap machines."
By analyzing telematics data, warehouses can generate a richer, more detailed profile of their workers' activities than they can with basic performance measures. And more to the point, perhaps, this approach allows for a more nuanced comparison of workers' performance by factoring in variables like how far they traveled, how much weight they hefted, or how many locations they visited.
"People think of an LMS as an accountability tool only, to find underperformers and to drive margins, but that was before the labor crisis," Miller says. "Now, it can be used for rewarding people, giving them incentives, and retaining them."
SHIFTING LABOR LANDSCAPE
The recent shift marks the latest stage in labor management systems' ongoing evolution to meet changing business challenges, says Michael Wohlwend, managing principal with Alpine Supply Chain Solutions, a Chicago-based consulting firm.
In the early '90s, many companies used their LMS platforms to track workers' performance against "engineered labor standards" in an effort to gain leverage against unions that were pushing for less-stringent metrics, he says. Then in the late '90s, managers started using LMS software more strategically, implementing "pay for performance" programs that offered workers incentives to meet specific performance goals.
Today, warehouses are using their LMS systems—often in conjunction with their warehouse management systems (WMS)—to respond to a new challenge: meeting strict order-shipping deadlines. Many e-retailers now promise same-day shipping for all orders placed by, say, 5 p.m. However, fulfilling those promises often results in a last-minute scramble to get orders out the door, forcing managers to shift worker assignments on the fly. During these crunches, performance data from an LMS can help managers quickly identify the workers best suited to the tasks at hand, Wohlwend says.
If economic trends hold, the U.S. labor crisis won't be resolved anytime soon. But even in an age of increasing automation, most warehouses still rely on human workers to handle the growing fulfillment workload. And to help keep these valuable assets on board, more and more DCs are leveraging the data-collection and analysis capabilities of their trusty LMS platforms.
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.”