Labor environment – torn between reality and recognition

Affected industries: All industries (B2B and B2C)

Affected supply chain segments: All segments (FTL, LTL, CEP, etc.), and especially labor-intensive operations like contract logistics

What is the current labor environment?

Labor shortages, especially driver shortages, have been a challenge for supply chain management for years. In recent years, the situation has intensified – vacant positions in the logistics industry were at an all-time high in December 2021, as 70% of logistics businesses reported a labor shortage. Meanwhile, established companies and startups alike compete for IT personnel. As supply chains' role in customer service and overall business resilience has become clearer than ever, the appreciation for essential workers has grown. This trend, next to New Work concepts implemented to improve working conditions, has gained traction in the industry as businesses seek to retain their workforce and ensure supply chain functions. At the same time, labor strikes in 2022 and 2023 have been common.

How is the labor environment developing?

The majority of logistics companies reported labor shortages in 2022, despite greater integration of immigrants and refugees into the workforce. Increased wages and New Work initiatives are important incentives to attract workers. In the United States, Walmart announced it would double wages for its truck drivers.

Getting ahead of the trend

The development of the labor environment urges businesses to reevaluate their working environment and market conditions. Many New Work practices have already proven their benefits. Implementing these could greatly enhance current capabilities and save costs in the long-term.