By Fello Logistics
The warehousing industry has struggled with its labor force ever since the pandemic, much like every other segment of the transportation industry. And this often leads to significant challenges in maintaining consistent delivery and controlling operating costs.
On a positive note, however, it has set the stage for a great deal of robotics automation, which improves efficiency in many ways while not eliminating the need to recruit good people for jobs that only people can do.
Signs of Stabilization in Warehouse Labor Market
Meanwhile, Transport Topics recently reported that major warehouse operators are starting to see their labor profiles stabilize:
Most companies are experiencing a bit of recovery since the pandemic-influenced employee shortage. “Turnover has been steadily decreasing for the past few years,” said (Sabrina Wnorowski, chief human resources officer at Radial Inc.) “We attribute this decline to changing market conditions, an increased focus on converting part-time associates to full-time employees, and improved employee experience since the height of the pandemic.”
Geodis has also experienced a decrease in voluntary turnover rates over the past two years. Sarah Damschroder, vice president of human resources at Geodis in Americas, said that for the markets where there is new business or off-cycle peaks that don’t necessarily align with the traditional fourth-quarter timeline for retail, the trend indicates a lessened challenge with hiring in the warehouse environment.
“This can be attributed to a decrease in overall consumer demand, which helps alleviate the immediate need to onboard new workers,” she explained. “However, the dynamic nature of this industry requires a flexible workforce management strategy should the hiring landscape change quickly based on demand — as it often does.”
Another illustration is Ryder, which reported that employment for warehouse workers has grown 80%, from 6,265 in 2019 to 11,268 in March 2024, and its turnover rate is also below industry averages.
Benefits of a Stabilized Warehousing Workforce
If the cost of warehouse labor is stabilizing, that will benefit the shippers we serve in several ways. Not only will it put less overall pressure on costs, but it will provide us with more options to work with warehousing partners who have a solid team in place to handle our clients’ needs.
But a short-term stabilization doesn’t change the long-term trend. The balance of the market still favors the workers, and the result is that hourly wages for warehouse workers have increased by close to 25 percent since 2019.
Ironically, that could lead to other benefits for shippers, because warehouse operators who have no choice but to pay higher wages will have to look for efficiencies elsewhere in the operation. If that comes in the form of more efficient warehouse management systems, or better platforms for data analytics, the result could be that they don’t just reduce costs. They also improve the efficiency of their operations.
Shippers will definitely benefit from that.
Our Commitment To Shippers
Our warehouse partners keep us well informed about how economic trends are affecting them – and about what they’re doing to make sure that they can meet the needs of our clients no matter what it takes.
We help our clients by making sure we take care of a wide variety of warehousing-related services – everything from transloading and inventory management to repackaging and repalletizing. The right warehouse provider and the right logistics partner can make this part of the worry-free process for shippers. That’s our commitment. And we’re watching the warehouse industry carefully so we will know the right providers for you.
Fello Logistics is known for integrity, reliability, industry-leading customer service and genuine care for it’s clients. Learn more about our freight shipping services.
