It seems that the pandemic-fueled job boom in logistics is coming to an end.
Operators of warehouses, transport fleets, and other freight enterprises claim that as the supply-chain disruptions that created tens of thousands of new employment fade, they are reducing their payroll growth. Many freight executives say they anticipate personnel reductions through attrition, however some believe layoffs may occur as their companies seek to decrease costs.
According to Bob Biesterfeld, CEO of C.H. Robinson Worldwide Inc., the largest freight broker in the United States by revenue, “We got ahead of ourselves in terms of head count”, “We certainly did not expect that the market was going to come down as rapidly as it did.”
“As supply chains ease, it’ll allow us and afford us the opportunity to make some difficult personnel decisions there in order to take cost out of the model,” Mr. Biesterfeld said, speaking on an earnings conference call Wednesday.
The Bureau of Labor Statistics’ seasonally adjusted preliminary monthly employment report, which was released on Friday, shows that warehousing and storage businesses lost 20,000 jobs from September to October after creating more than 400,000 new jobs in the previous two years through the end of 2021.
The payroll decline was the greatest since the industry shed 75,000 employees in April 2020 as pandemic lockdowns took hold and it was the fourth consecutive monthly decline.
The demand for commodities and the supply chain have grown exceptionally over the past two years, according to Cathy Roberson, president of the research and consulting business Logistics Trends & Insights LLC. Companies had to scale up as best they could by recruiting people to cope with the rise in demand and other factors, but now that things are starting to calm down and normalize, there is less of a need for labor.
According to BLS data, employment in the warehouse and storage industry has decreased by close to 50,000 positions since June.
The demand for warehouse workers has decreased, according to Nick Bunker, economic research director for North America at job-search website Indeed.com, since customers have shifted their spending from products to services.
“This is part of a broader shift in the economy, which obviously has consequences for transportation and logistics as they are the sectors that are moving those goods to businesses and the ultimate end consumer,” Mr. Bunker said.
Amazon.com Inc., which during the pandemic had increased the size of its distribution network by twofold over a period of 24 months, has scaled back plans for this year’s warehouse expansion and last month stopped hiring in its retail segment. The e-commerce behemoth announced that it would put a temporary halt on corporate recruiting due to indications of a wider economic slowdown.
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