Before the virus pandemic, labor challenges in distribution centers were almost at crisis levels.
To cite just one anecdote, an article in the Wall Street Journal earlier in the year said a FedEx facility in Memphis was paying to bus in workers two hours away, because it was so difficult to hire and retain workers close by.
Even with that and other programs, one FedEx sortation facility currently has more than 500 open positions.
It’s no surprise.
There are now about 1.18 million non-supervisory warehouse workers in the US, about flat with 2019, after growing 10% the previous year. The flat year-over-year change is surely a factor of the pandemic, which has only stalled the demand for DC labor, not reduced it. The flat year-over-year growth actually shows demand strength in a weak economy.
The current number is substantially higher than the 637,000 warehouse workers the US had in 2010, meaning a rise of a whopping 85% over 10 years.
And that has finally led to major increases in wages. The average US wage for warehouse workers was $18.92 in June, including benefits, up from $18.53 2019, and just $15.85 in June of 2016. That’s a rise of 4.53% per year since 2016, more than twice the level of inflation.
So, what is a distribution manager to do?
Certainly, technology can be a big part of the solution.
There are traditional tools, such as warehouse management and labor management software. If you are lacking these tools, or have a dated WMS, you likely have some opportunity.
But there are other options, including automation. Softeon, for example, is seeing great interest in technologies such as put walls and mobile robots to reduce the need for labor.
Softeon Warehouse Management and related Warehouse Execution Systems provide robust support for these systems and other technologies, such as Voice and Pick-to Light systems.
In fact, our Warehouse Execution System delivered 50% productivity improvements at one client of our customer UPS Supply Chain Solutions, as UPS announced in a press release in late April 2020.
The reality is there are many tools available to take on the DC labor challenge, whether your issue is labor costs, labor availability, DC throughput or like many all three.
We would welcome the chance to discuss the opportunities with you.
You can learn a lot more or contact us at Softeon.com.