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Retail Industry Updates Supply Chain Industry Updates

Study Observes Ongoing ‘Tug-of-War’ in Logistics Jobs

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Twenty years ago, a shopper preparing for fall weather might have trekked to the local mall to buy a sweater, hoping a store had it in her size and color. Otherwise, she could count on making more trips until she found what she wanted. Today, this same shopper can order the exact sweater she wants from home and have it delivered to her door long before the first cold snap.

E-commerce has had a tremendous impact on consumer behavior, and it likewise has profoundly changed the supply chains that provide the goods they buy and the people who work in them. A new research brief from the Massachusetts Institute of Technology (MIT) says e-tail has “sharply increased” demand for two types of logistics services:

• Warehouses, built to handle bulk packaging, now process “huge numbers of individual items, such as a bottle of hand sanitizer.”
• The trucking industry, “built around large shipments to distribution centers and retail stores, must now make many more small deliveries to individual homes.”

“If we think of logistics employment as a tug-of-war between job gains from e-commerce and job losses from automation, thus far job gains are winning decisively. In 8 to 10 years, however, automation will likely be significantly stronger.”

Employment in these industries also is undergoing an evolution. The two trends listed above have stimulated the adoption of automation and digital technologies in the warehouse and logistics industries, and more is sure to come.

“If we think of logistics employment as a tug-of-war between job gains from e-commerce and job losses from automation, thus far job gains are winning decisively,” the MIT researchers wrote. “In 8 to 10 years, however, automation will likely be significantly stronger, both reducing the total number of jobs and shifting the mix of remaining jobs toward technicians, analysts and other skilled occupations.”

“Warehousing, Trucking, and Technology: The Future of Work in Logistics” identified several ongoing and future changes as consumers continue to embrace e-commerce and organizations seek to reduce costs. They included:

  • Between 2000 and 2019, the output of the general freight trucking industry increased by roughly 20%. Some of that growth was due to a larger driver workforce, but the majority could be credited to more efficient use of trucks.
  • Much of the gain in trucking efficiency came from firms in freight transport arrangements, such as 3PL logistics providers, using digital tools.
  • A commercially viable autonomous truck that travels on interstates “is at least a decade away.”
  • However, automation, “will start to cost some truck driver jobs before the decade is out.”

The inexorable growth of automation is likely to have the most drastic impact on warehouse and trucking employees with no more than a high school diploma. The MIT authors recommend steps to address this, such as the creation of “employer-community college consortia to expand access to career education. These programs, like the private sector equivalents — Amazon’s Career Choice and Walmart University — would be directed at preparing low-wage logistics workers for better jobs that are under less threat from automation.”

A link to the complete report can be found here.

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