Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
I would like to talk theme, labor costs in the supply chain soars and robots will be introduced.
With the economic recovery from Corona disaster in North America, the Christmas shopping season is expected to heat up at the end of this year.
This year, demand is high not only from brick-and-mortar stores, but also from online shopping, so companies are worried about the rising labor costs to support these supply chains.
Daily Logistics Radio by IINO san in 30th Sep. 2021
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Higher Labor Costs for Warehouse Workers
Wages for warehouse workers in North America have hovered between USD 13 and 15 per hour for the past few years. But now it has jumped to USD 19 per hour.
Examples of hourly wages for warehouse workers at major companies:
-Amazon: USD 22 (starting salary)
-Wal-Mart: USD 20.37 (average hourly wage)
In addition, the companies mentioned above are trying to secure hundreds of thousands of workers for the coming holiday season by offering bonuses, college tuition assistance and other conditions when they sign their employees.
Hiring costs are also rising
In addition to labor costs, hiring costs for companies are also rising. One logistics company used social networking sites, billboards and job fairs to advertise their recruitment efforts, and found that the cost had doubled.
Then there was the news that FedEx reported a 7% drop in profit for the June-August 2021 period. While sales are up, profits are down due in large part to staffing needs to handle the increased volume of deliveries at the end of the year.
The company added 450 million USD in costs in the most recent quarter and is aiming to hire 90,000 people to handle delivery of the end of the year.
The Future of SCM (Supply Chain Management) is Changing with the Introduction of Robots
With rising cost of labor, companies in the supply chain are installing robots in their warehouses. DHL is one of those, which has added hundreds of robots to its fleet.
I personally believe that the demand for robots to support this supply chain will continue to rise in the future.
This is not just a story for the US. As the number of jobs that warehouse robots can do increases, supply chain problems such securing labors will diminish.