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Supply Chain Labor Shortages – Coping Mechanism

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Supply Chain Labor Shortages – Coping Mechanism

  • Posted by: SLA Admin Logistics

We are approximately two years into the COVID-19 pandemic. There is a continuity in struggle at various levels of supply chain, due to labor shortages. Many expected the hiring situation to get better last year —but the pandemic doesn’t seem to make an exit easily. At every step disruptions occur in supply chain due to labor shortages.

There was a whopping 490,000 warehouse and driver openings in July in logistics industry—a record-breaking gap expected to grow in the months ahead—and the shortage of labor is causing disruption at every level of the supply chain.

The Truck Driver Shortage

The driver shortage continues to squeeze trucking capacity. Although the pandemic has increased the pre-pandemic driver shortage more than 23% to 80,000 drivers, the industry could face a shortage of 160,000 drivers by 2030. The time when an estimated one million drivers will be needed by US to meet consumer demand for shipping. There are higher wages and bonuses being offered to preserve workforce.

The Warehouse Labor Shortages

As per study several large retailers raised wages and offered bonuses and perks to attract warehouse workers this holiday season, several jobs remained unfilled. Retaining is the main crux of the problem for warehouses. Millions of workers seemingly have moved on to other industries.

The Labor Shortage and Port Congestion

There are unprecedented levels of congestions at US ports, with labor shortages contributing towards the same. Two months ago, the Port of Los Angeles reported half a million 20-foot shipping containers on 90 ships waiting to unload—whereas in pre-pandemic times each day shipments arrived. It is a complicated issue and stems from the nationwide labor shortage. There is dearth of workers to unload ships at ports, drivers to transport containers from ports, and warehouse employees to receive and unload shipments, supply chains are backing up. As the warehouses are full, retailers are leaving shipping containers on the docks for many days, which adds to the congestion. 

Solution:

Outsourcing to a Third-Party Logistics Provider (3PL) When resources are stretched, outsourcing services to a third-party logistics provider becomes an effective strategy for coping. A 3PL can offer services in transportation management and warehouse services to augment or replace your in-house services.

Transportation

A transportation management partner to enhance efficiency of freight movement and minimize disruption is helpful in such circumstances. It offers more scalable trucking capacity and access to more competitive rates.

Author: SLA Admin Logistics
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