Some positive signs, but warehouse labor shortage continues

The impacts of the warehouse labor shortage continue to be felt across the supply chain. The need for warehouse labor is greater than ever, but there just haven’t been enough workers to meet the demand. In this article, we’ll look at where the shortage currently stands and what you can expect in the future.

Current state of warehouse labor shortage

First the good news. According to a recent article in Supply Chain Dive, warehouse employment hit a new high in July. The Bureau of Labor Statistics showed that there were a record 1.44 million warehouse and storage employees on the books that month. In addition to being a record, that was the third straight month that employment has risen in the industry.

The bad news is that even this record number of workers isn’t nearly enough to meet market demands.

Part of the reason is that the nature of warehouse work has changed in the wake of the pandemic and the resultant spike in eCommerce fulfillment. Rich Thompson of JLL was quoted in the Supply Chain Dive article: “What it means is that instead of having 100 guys driving forklifts… around, now you've got individuals that have to do a lot of picking and packing. And that requires far more labor."

Another factor is that many workers are reluctant or unable to return to the warehouse. This is due to a variety of factors, from pandemic-related concerns and family/childcare responsibilities to generous unemployment benefits that may have lessened the impetus to return.

The bottom line is that we still have a much greater demand for warehouse workers than we do supply of available labor.

Turn to a 3PL to mitigate the shortage

Because of this supply-and-demand imbalance, competition for the services of warehouse workers is more heated than ever.

Companies are battling each other for any and all available workers, and are using wages, signing bonuses, and robust benefits packages as their tools of choice. Unless you’re a larger company that can afford to dedicate the time and resources necessary to keeping up with the deep-pocketed competition (e.g., Amazon and Walmart), it’s going to be very difficult to attract, hire and retain the warehouse labor you need on your own.

Many companies, especially smaller-to-mid-sized ones, are thus entrusting their warehousing operations to 3PL providers. In doing so, you obtain two distinct benefits. First, you gain the expertise of a 3PL in handling your warehouse operations and, second, you benefit from the 3PL’s ability to attract, hire, and retain warehouse labor to support your business. 3PLs have resources that are solely committed to recruiting and retention. Other advantages 3PLs have on the labor front include:

• Many 3PLs have multiple distribution centers and can cross train employees to fill in gaps at other locations, as needed
• 3PLs tend to have close working relationships with temporary staffing agencies, helping to ensure adequate coverage
• 3PLs are typically well known to prospective employees in their markets, making recruitment easier

Lean on Kanban Logistics to mitigate the labor shortage

At Kanban Logistics, an Eastern-North-Carolina-based 3PL provider, we take pride in our low employee turnover rates. We treat our employees like family and the majority of our warehouse associates have been with us for many years. This not only leads to a happy and productive work environment across Kanban warehouses, it also means that our customers can count on Kanban for reliable service, day in and day out. To learn more about how Kanban Logistics can support your business on the East Coast, regardless of the warehouse labor shortage, contact us today.