Warehouses already faced labor challenges even when unemployment was at record lows in Fall 2019, months before the global pandemic began. As e-commerce sales skyrocket and supply chains operate under continuous COVID-19 strain, the media has been inundated with articles about employees getting sick at distribution centers. While e-commerce warehouses need to hire quickly to keep up with demand, many unemployed American workers are understandably hesitant to apply for these positions.
Retailers and other shippers that rely on third-party logistics (3PL) providers to handle their distribution activities have thankfully been insulated from many of the labor challenges presented by the ongoing outbreaks of coronavirus. This article will discuss some of the ways that 3PLs can help shippers alleviate the strain of warehouse labor issues.
Using a 3PL-owned warehouse places the costs and other burdens of labor recruitment on the 3PL rather than the shipper. Given their sole focus on logistics, 3PLs are often better equipped to target and attract appropriately skilled logistics workers for their facilities. Relying on the logistics provider for labor can be especially beneficial when trying to quickly launch a new facility or expand an existing one. 3PLs often have dedicated teams for opening new locations and may also be able to borrow talent from their other facilities to get up and running more quickly while they simultaneously recruit.
Beyond the cost of recruitment itself, training and hiring a warehouse worker amounts to tens of thousands of dollars in onboarding and training costs. Costs may vary somewhat depending on the specific facility and the types of goods it handles, but large-scale hiring is often a cost-prohibitive endeavor for shippers. In addition, training warehouse workers requires management with a thorough knowledge of logistics and capabilities to develop a streamlined training process. For organizations where supply chain functions are not a core competency, this may require additional hiring efforts at the management level to maintain the appropriate level of in-house expertise to keep warehouse staff up to date with best practices.
3. Labor Management
A single warehouse may have hundreds of employees on the payroll, generating a significant burden on a company’s human resources department. Staffing a warehouse requires ongoing labor management support to set up and administer benefits packages, organize shift schedules, field questions, promote retention, and develop and maintain a positive company culture. A logistics provider handles all of this, ensuring that retailers, manufacturers, and other shippers don’t needlessly overburden their own human resources teams.
In the face of a long-term labor shortage and new pandemic-driven demand, many DCs have turned to technology to fill the labor gap. Options for automation may include extensive conveyor systems, robotics, software, and more. Most automation solutions have a large upfront cost and implementation of automated conveyor belts and similar machinery may require a facility to shut down for a year or more. As such, many shippers have instead chosen to benefit from the existing warehouse technology already owned by their 3PLs.
Most 3PLs are helping numerous customers handle supply chain problems created by COVID-19, ranging from expansions to launching new facilities to streamlining existing processes. In uncertain times, the steady influence of a logistics expert can help shippers of all types to manage increasing demand. This is true in the warehouse as well, where most 3PLs now have processes and safety protocols in place at other facilities that they can draw from at new locations.
Let Phoenix Logistics Help You Overcome Your Logistics Labor Challenges
At Phoenix Logistics, we have a comprehensive portfolio of real estate, distribution, and transportation management services, and we’re prepared to help you meet your increased demand with a new warehouse or distribution center staffed by our knowledgeable employees and optimized using our advanced warehouse management system. To see how we can help, please contact us.