The increase in demand is causing a shortage of human workers, which has led to the rise of robots.
The logistics providers see e commerce momentum continuing post pandemic is a news article that discusses how logistics companies are seeing an increase in demand with the holiday season.
As they prepare for an anticipated rush of Christmas products and compete for limited labor with deep-pocketed competitors, warehouse owners are using every tool at their disposal to recruit seasonal workers.
To assist employees handle rising e-commerce volumes, logistics companies are increasing compensation, adding flexibility to schedules, blanketing social media with recruiting advertising, and even bringing in additional robots. They’re also competing with behemoths like Amazon.com Inc., Walmart Inc., and United Parcel Service Inc., which are dangling incentives ranging from signing bonuses to college tuition aid as they try to hire hundreds of thousands of people before the holidays.
“The word I hear most frequently when businesses are looking forward to peak season is ‘terrified,’” said Dan Johnston, CEO and co-founder of WorkStep, a company that helps companies recruit and retain supply-chain workers.
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In a tight labor market in the United States, workers who complete online orders and deliver goods to shops are in short supply, with service sectors claiming that a shortage of available personnel is impeding their recovery efforts. According to several warehouse workers, they are already working extra in often difficult circumstances to satisfy high customer demand.
“There is a huge amount of demand for jobs and people, and we have not shifted people across into our industry at the rate that demand has changed,” said Kraig Foreman, president of e-commerce for DHL Supply Chain North America, a division of Deutsche Post AG whose contract logistics customers include Brooks Sports Inc. and Ferrero International SA, an Italian candy company.
For this year’s Christmas peak, DHL Supply Chain plans to employ 12,000 seasonal workers in North America, a 20% increase over 2020. The firm is increasing wages and deploying hundreds more collaborative robots to assist employees select items by navigating warehouse aisles.
Because selecting, packaging, and shipping e-commerce orders is more labor-intensive than conventional warehouse operations that distribute wholesale products or restock store inventories, demand for distribution employees has risen as more customers shop online.
As homebound customers filled up their digital shopping carts, the epidemic boosted e-commerce adoption. Covid-19 added to the strain on blue-collar workers, with some quitting because they were afraid of becoming ill or having to care for family members.
E-commerce has boosted demand for distribution employees, which has intensified during the epidemic.
Bloomberg News/Bloomberg News/David Paul Morris
Big retailers, who used to hire seasonal employees for their stores, are now adding to the rivalry by employing additional people for logistical operations that cater to internet demand. Before the holidays, Walmart intends to recruit 20,000 people for its supply chain operations. Target Corp. intends to employ 100,000 seasonal workers this year, down from 100,000 last year, although the retailer claims that the number of store fulfillment workers has quadrupled in the previous two years.
Sharp wage rises are being driven by the need for employees. Wages for e-commerce employees have risen from $13 to $15 an hour in recent years to as high as $19 an hour in certain regions, according to logistics executives, driven by the industry’s largest operators.
According to Amazon, starting compensation for warehouse employees may reach $22 an hour in certain areas, whereas the average hourly salary for supply-chain workers at Walmart is currently $20.37.
Even the biggest companies are feeling the pressure. FedEx Corp. reported last week that a tight labor market contributed $450 million to its expenses in the most recent quarter, with similar challenges anticipated to continue through the end of the year.
Alejandro Mateo, who works at G-III Apparel Group Ltd. in Dayton, New Jersey, and earns $13.25 an hour selecting online and wholesale apparel orders, said several of his coworkers had left for better-paying distribution positions.
Mr. Mateo, a union shop steward for the Laundry, Distribution, and Food Service Joint Board, Workers United, SEIU, stated via a translator that the remaining staff is working overtime to get goods out to shops for the Christmas season.
Mr. Mateo said, “The job is not simple.” “We don’t have any air conditioners, and they promised us fans but haven’t delivered all of them.” He hurt his back while pushing clothing-laden trolleys, according to the 62-year-old.
G-III, which develops, sources, and distributes clothing for labels such as DKNY and Andrew Marc, did not respond to a request for comment.
Even with salary increases, some warehouse companies are now providing four- and five-hour shifts to accommodate employees who can’t work a full day due to child care or other commitments, according to Brian Devine, senior vice president of logistics staffing company ProLogistix.
Mr. Devine described the tight employment market as “the most aggravating thing” in his 26-year career. “Our recruitment expenses have quadrupled, and we’re putting out more ads… From help-wanted yard signs to drive-through job fairs, there’s something for everyone. We’re going all out with radio advertising and billboards.”
Some businesses aren’t waiting for human employees. As businesses prepare for significant seasonal production surges, the labor constraint is hastening automation across mainly manual warehouse and fulfillment processes.
From the Logistics Report:
GXO Logistics Inc., headquartered in Greenwich, Conn., increased its robotics and automation systems by 40% in North America in 2021, and intends to build nine new automated e-commerce locations in the United States this year. GXO said it has raised compensation in important areas by an average of $3 to $5 per hour and is providing additional financial incentives, such as sign-on bonuses.
The demand isn’t likely to slow down any time soon.
In the post-Thanksgiving shopping frenzy between Black Friday and Cyber Monday, France-based logistics company Geodis SA anticipates its North American e-commerce division to handle 20% higher volume this year. The firm plans to hire around 10,000 seasonal employees this year, up from 8,500 in 2020, as it expands its use of robots.
Mike Honious, Geodis’s chief executive for the Americas, stated, “I don’t see it ever going back to where it was, pre-Covid.”
Jennifer Smith can be reached at [email protected]
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The locus robotics price is a company that specializes in logistics robots. They have recently raised the pay for their employees, and are also looking to hire more people.
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