I recently sat down with Keith Phillips, president and CEO of voice automation technology and supply chain analytics provider Voxware, to talk about some of the biggest issues affecting the supply chain in 2022. Our talk was for Voxware’s monthly DC Innovation webinar series, a project the company launched in 2020 as a way to stay connected with customers and business partners during the coronavirus pandemic, when live industry events and client meetings were put on hold. Voxware is continuing the series, and I was grateful for the opportunity to share insights from DC Velocity’s coverage in 2021 as well as discuss the trends we have our eye on in 2022.
We talked about a wide range of issues but found ourselves coming back to one, in particular, at almost every turn: labor. Whether they are struggling to fill open positions, dealing with absences due to illness or isolation requirements, or looking for ways to develop talent, logistics managers are united in the realization that they must continually “do more with less.” It’s true in the warehouse and distribution center, in corporate offices, and on our roads and highways; finding enough people to keep supply chains running at peak performance is difficult, to say the least.
The logistics labor challenge was already an issue before the pandemic hit, and that’s what is making things so much worse. Warehouse and DC managers struggled to find entry-level talent for a variety of reasons, including tough working conditions and stiff competition for employees. Those issues haven’t changed much. On the transportation side, the trucking industry has long lamented a shortage of available truck drivers, a situation that has only been exacerbated by pandemic-related challenges. The accelerating e-commerce activity and unwavering consumer demand of the past two years have only made it harder to keep up with productivity requirements on all fronts.
But there is hope, and there are ways to tackle the labor challenge. At least, that’s what Phillips and I discerned as we discussed trends in technology deployment, strategies for dealing with supply chain disruptions, and the impact of shifting consumer buying habits on entire supply chains.
One of the hottest topics in supply chain circles these days is warehouse and DC automation, which can go directly to the heart of the labor problem by reducing a company’s reliance on human labor for mundane tasks, while increasing productivity and accuracy. With automation technology—and, increasingly, robotics—companies can find ways to become more efficient, including by reducing the distance workers have to walk in order to complete tasks, and distributing and prioritizing tasks so that work is optimized for the available workforce. There are many technologies—traditional and more advanced—that can help logistics operations reach those goals.
Phillips and I discussed how training, development, and recruitment strategies are important as well. We’ve watched this play out on the transportation side of the business in recent years, with industry efforts to develop recruitment and training programs for younger workers. Last year’s passage of the Infrastructure Investment and Jobs Act in Congress offers one example. The bill included the DRIVE Safe Act, a program designed to expand the pool of available truck drivers nationwide by lifting age restrictions that prevent drivers from crossing state lines and improving safety and training through apprenticeship programs. First introduced a few years ago, the program was backed by a coalition of more than 50 companies and trade associations. Other efforts to address the driver shortage have emerged more recently. The Biden administration released its Trucking Action Plan late last year, another effort to help reduce barriers to obtaining a commercial driver’s license (CDL), create more driver apprenticeships, and develop recruitment programs—particularly targeted to military veterans. The effectiveness of such programs remains to be seen, of course, and they aren’t without controversy; but their existence underscores the need to focus on the labor problems underlying our larger supply chain challenges.
Logistics has been on the front lines of the pandemic and despite its challenges, has been among the fastest to add workers over the past two years, according to government data from the end of 2021. But more will be needed as the industry’s fast-paced growth continues. Taking a closer look at technology, automation, and worker development are steps in the right direction.