Businesses across the country are struggling to find workers, and transportation and logistics may be among the hardest hit.
U.S. job openings hit a record high of 8 million in March according to labor department data released Tuesday, but many companies are having a tough time finding workers to fill those slots; the data showed that job vacancies outstripped hires by more than 2 million during the month, the highest gap on record. The news came on the heels of Friday’s disappointing April jobs report, in which the labor department said employers added 266,000 jobs—far less than the roughly 1 million some economists had forecast.
The results paint a tough picture for transportation and logistics, which continues to roar back from the pandemic lows of a year ago but is struggling to find enough truck drivers and warehouse workers to meet surging consumer demand for everything from household goods to apparel and recreation items. The government’s preliminary jobs data for April showed that transportation and warehousing employment declined by 74,000 jobs during the month, following gains in February and March.
Mark Allen, president and CEO of the International Foodservice Distributors Association (IFDA), said the issue is especially acute in the food industry, which has bounced back quickly this year as pandemic restrictions have eased and Covid-19 vaccinations have ramped up. IFDA represents distributors that sell food and related supplies to restaurants, schools, hospitals, and other institutions.
“I don’t think anyone expected for our industry to come back as quickly as it did,” Allen said, pointing to a recent conversation he had with three large food-industry distributors that, combined, told Allen they need to hire 8,000 truck drivers and warehouse employees to meet demand. He said the industry has been feeling the pinch for drivers since the early part of the year, but didn’t see demand heating up on the warehouse side until mid- to late March.
Finding those workers remains tough for a variety of reasons, including the federal government’s expanded unemployment insurance benefits, lingering fears of contracting Covid-19, and the need for some workers to care for children who are still in remote schooling, Allen explained.
“My guess is there are a lot of things going on,” he said, adding that most business leaders point to expanded unemployment insurance as the biggest culprit. “Paying people to stay out of the workforce is not beneficial to industry.”
The federal government continues to offer $300 in additional unemployment benefits to workers sidelined during the pandemic, and although Allen and others say companies are increasing wages and offering other incentives to attract employees, they say such efforts often can’t compete with the stay-at-home benefits.
“Clearly there is a subset of America that, for whatever reason, has not reentered the workforce,” Allen said.
But there’s hope that some of these issues are only temporary. A handful of states have begun tightening reporting requirements to receive unemployment benefits and some have said they would opt out of the enhanced federal unemployment programs before they are scheduled to end in the fall. Some states are offering return-to-work incentives in lieu of the benefits. Allen said there’s a grassroots effort among IFDA members to support such state and local efforts to find “creative solutions to get people back to work.”
The retail sector is plagued by the same hiring concerns, according to Jack Kleinhenz, chief economist for the National Retail Federation (NRF). Retail jobs were down 15,000 in April, following gains in February and March, and employment in retail trade overall is 400,000 lower than it was in February 2020, according to the April jobs report.
Retail job openings continue to exceed hires, and Kleinhenz points to the same mix of reasons for retailers’ difficulty in finding workers—enhanced unemployment benefits, health and safety concerns, and so forth. He says the retail industry continues to “feel its way forward” by offering higher wages, where possible, adding that it will take some time for supply and demand to get back in line.
Like Allen, Kleinhenz says the rapid economic recovery from the pandemic is fueling much of the issue.
“There are a lot of positives, looking forward,” Kleinhenz said, pointing to the strength of the consumer economy as an example. “A year ago, you wouldn’t have thought things would come back so quickly.”
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.