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Logistics Hiring Gap Growing Toward 200,000 Workers, Study Suggests

11/20/2012 - by William B. Cassidy, Senior Editor

Trucking may have its driver shortage and the airlines a pilot shortage, but those problems are only part of a larger supply chain labor challenge.

About 270,200 logistics jobs will be created each year in the U.S. between 2012 and 2018, according to a study from the Georgia Center of Innovation for Logistics, a division of the state’s economic development department. But U.S. vocational schools, colleges and universities are only producing about 75,280 formally trained, degreed or certified workers a year qualified for those jobs, the study found.

“We’ve identified a pretty staggering gap,” said Page Siplon, the logistics center’s executive director, a shortage of at least 195,000 qualified logistics employees.

“It’s no surprise,” he said. “The supply chain industry is growing pretty fast, and as the economy grows so do supply chain needs and the amount of freight we move all over the world. There are big gaps in how we’re going to meet future demand.”

In its study, the Georgia logistics center set out to quantify that labor demand and identify ways to meet it. The logistics employment challenge, Siplon said, could be bigger than the study projects. “This is the tip of the iceberg,” Siplon said. “The numbers that we put in the report are a small but representative sample” of total logistics employment and demand across multiple industries, he said.

The number of new logistics jobs forecast by 2016 alone “would be much larger if we could take a comprehensive look at where opportunities are going to be,” Siplon said. “Even so, we’re talking about a million jobs. That starts the conversation.”

It certainly does. Failure to adequately invest in logistics education and training would be comparable to the failure to invest in infrastructure such as highways, ports  and bridges. Either would undermine the competitiveness of U.S. businesses on a global scale over the long-term and to hamper near-term growth.

“If we’re going to really focus and realize that supply chains and logistics play an important role in U.S. competitiveness, we need to recognize that and measure that at the federal level,” said Siplon, who in October was appointed to the Department of Commerce U.S. Advisory Committee on Supply Chain Competitiveness.

Logistics education needs to take a big leap to meet the growing demand for logistics workers, Siplon said. Logistics programs of all types, from vocational training for truck drivers to global supply chain degree programs, need to shift to  higher gear not just to meet the demand for more workers, but for better workers, he said. “It’s a challenge not just in terms of quantity, but in quality,” as new technologies and processes reshape domestic andinternational logistics networks.

In particular, Siplon says the rapid growth of e-commerce and the evolution of logistics software create a need for more technologically savvy employees.

For generations, “logistics has been an on-the-job-training sort of industry,” Siplon said. “But today the demands customers place on companies are changing, and that’s leading to a whole new wave of technology, new ways to do fulfillment. These skills need to be trained and you can’t just do on-the-job training. If we’re not doing this training in our educational programs, it’s not going to happen,” he said.

Out of the 270,200 jobs created each year, 115,480 will be in trucking, and another 125,160 in warehousing and distribution, according to the logistics center. Logistics operation management will account for another 12,660 and industrial engineering for 12,110. Based on Labor Department data, the logistics center claims trucking has a current labor shortage, including drivers, of 98,884, while warehousing and distribution is short 92,506 of the workers it needs. The rail industry, in comparison, is short 4,368 workers, while businesses with logistics operations and management openings are short 3,873 employees, the study found.

Siplon’s projected employment numbers are based on data from the U.S. Labor Department, data that is problematic and difficult to gather simply because the department doesn’t treat freight logistics as a distinct or integrated industry.

“To make the comparison between supply and demand, labor and education, you need to compare apples to apples,” Siplon said. “We need to create data that is representative of the logistics business.” For example, the department considers flight attendants and taxi drivers as transportation workers, “but they’re not logistics workers,” Siplon said. “They’re not moving freight.”

The logistics center recommends better coordination and selection of data at the federal level between the labor and education departments to present a truer picture of the interconnected workforce needed in today’s supply chains.

“We need to fix that system at the Labor Department so we can improve our knowledge of what the industry really looks like and make fine-tuned improvements in the future,” Siplon said. “Logistics truly is an industry now and it needs to be recognized as such.” That’s just as true for academia as for federal and state regulatory agencies. “We need to change the perception of logistics, and we need to encourage greater awareness of logistics earlier in education, even at the high school level,” he said. He noted that an increasing number of high schools are offering supply chain courses, often in cooperation with colleges that have supply chain programs such as Georgia Southern University or Penn State.

“We need to be thinking about who’s going to be running things 20 years from now,” he said.