Logistics operators raise wages and use robots to meet holiday demand
Warehouse operators are putting all possible tools into increasingly urgent efforts to hire seasonal workers as they prepare for an expected influx of holiday products amid competition for scarce labor from rivals with deep pockets.
Logistics providers are raising wages, adding flexibility to work shifts, covering social media with recruiting announcements, and even sending more bots to help workers manage growing e-commerce volumes. They also do maneuvers with titans like Amazon.com Inc.,
and United Parcel Service Inc.
which are suspended incentives, signing bonuses to help with tuition fees, as they push to recruit hundreds of thousands of workers before the holidays.
âWhen businesses are considering peak seasonâ¦ the word I hear most often is ‘terrified,’ said Dan Johnston, managing director and co-founder of WorkStep, a startup whose software helps companies hire and retain workers in the supply chain. .
Workers to fill online orders and push goods to stores are rare in a tight U.S. job market, in which service industries say a lack of available staff is hampering their recovery efforts. Some warehouse workers say they are already working overtime under sometimes difficult conditions to meet high consumer demand.
âThere is a huge demand for jobs and people, and we haven’t moved people into our industry at the rate the demand has changed,â said Kraig Foreman, president of e-commerce for DHL Supply Chain North America. , a unit of Deutsche Post AG whose contract logistics customers include running shoe manufacturer Brooks Sports Inc. and Italian confectionery giant Ferrero International SA.
DHL Supply Chain aims to hire 12,000 seasonal workers in North America for this year’s peak vacation, a 20% increase from 2020. The company is increasing wages and adding hundreds of more collaborative robots that navigate in warehouse aisles to help workers prepare orders.
Demand for distribution workers has skyrocketed as more consumers shop online, in part because preparing, packaging and shipping e-commerce orders is more labor-intensive. than traditional warehouse operations that distribute product wholesale or replenish store inventory.
The pandemic has accelerated the adoption of e-commerce as consumers confined to their homes load up digital shopping carts. Covid-19 has also increased pressure on the ranks of blue-collar workers, with some people leaving the workforce due to fears of falling ill or caring for family members.
Large retailers that once devoted seasonal hiring to store workers are adding to the competition by attracting more workers into demand-driven logistics operations online. Walmart plans to hire 20,000 workers for its supply chain operations before the holidays. TargetCorp. plans to hire 100,000 seasonal workers this year, about 30,000 below last year’s target, but the retailer said it has tripled the number of workers in stores in the past two years.
The push for workers leads to big wage increases. Wages for e-commerce workers have fallen from $ 13 to $ 15 an hour in recent years to $ 19 an hour in some markets, said logistics officials, led by the industry’s largest operators.
Amazon warehouse workers can start wages as high as $ 22 an hour in some locations, the company said, while the average hourly wage for supply chain workers at rival Walmart is now at $ 20.37.
Even the biggest operators are feeling the pressure. Tense job market added $ 450 million to FedEx Body
costs during the last quarter, the delivery giant said last week, with those headwinds expected to persist until the end of the year.
Alejandro Mateo, who earns $ 13.25 an hour choosing online and wholesale clothing orders for G-III Apparel Group Ltd.
at a warehouse in Dayton, New Jersey, said many of his colleagues had quit for other higher paying distribution jobs.
The remaining staff are working overtime to distribute goods to stores for the holiday season, said Mr. Mateo, a shop steward for the Joint Laundry, Distribution and Foodservice Council, Workers United, SEIU, by the ‘intermediary of a translator.
âThe job is not easy,â Mr. Mateo said. “We don’t have air conditioners, they promised us fans and they still haven’t provided all the fans.” The 62-year-old man said he injured his back while pulling carts loaded with clothes.
A representative for G-III, which designs, sources and markets clothing for brands such as DKNY and Andrew Marc, declined to comment.
Even with wage increases, the pressure for the job is so great that some warehouse employers have started offering four- and five-hour shifts to accommodate workers who cannot take a full day due to on-call duty. ‘children or other obligations, said Brian Devine, senior vice president of logistics staffing company ProLogistix.
The tight job market is âthe most frustrating thing in my 26-year career,â Devine said. âOur recruiting costs have doubled, we’re doing more advertisingâ¦ everything from helping road signs to driving career fairs. Radio campaigns, billboards, we do everything we can.
Some companies don’t wait for human workers. Staff shortages are accelerating the automation of largely manual warehousing and fulfillment operations, as businesses seeking seasonal peaks in volume attempt to increase their ability to handle goods.
GXO Logistics, based in Greenwich, Connecticut Inc.
added 40% more robotic and automation systems in North America in 2021 and plans to open nine new automated sites in the United States to support e-commerce this year. GXO said it has increased wages by an average of $ 3 to $ 5 an hour in key markets and offered other financial incentives, including connection bonuses.
Demand is unlikely to drop anytime soon.
France-based logistics service provider Geodis SA expects its e-commerce business in North America to handle 20% more volume this year in the post-Thanksgiving shopping rush between Black Friday and Cyber Monday. The company, which is also increasing its use of robots, plans to hire around 10,000 seasonal workers this year, up from 8,500 in 2020.
“I never see him coming back to where he was, before Covid,” said Mike Honious, Geodis general manager for the Americas.
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