Distribution & Logistics: DCs in the crosshairs
Distribution is a growing industry. The Bureau of Labor Statistics estimates that total warehousing and storage jobs will by 2.35% a year from 2010 to 2020.
Latest NewsState of Logistics 2016: Pursue mutual benefit Q2 TIA benchmarking report shows mixed annual results EY and UN Collaborate on Climate Change and Supply Chain Study GCCA report shows 8.6% increase in cold storage capacity worldwide since 2014 Automated material handling equipment market is expected to reach $44.68 billion by 2022 More News
Latest ResourceIs Your DC Ready for E-commerce Growth? Here’s How to Handle More SKUs and Inventory Turns The rise of e-commerce and multi-channel fulfillment has caused distribution centers (DCs) to experience ever-growing numbers of stock-keeping units (SKUs) and more inventory turns, up to an average of nine in 2015.
Editor’s note: The originally appeared in Modern Materials Handling, a sister publication of Logistics Management.
Sometime in the last few weeks, Amazon posted a notice on its home page touting the job and career opportunities available to those working in its distribution centers.
“Our high productivity allows us to pay our fulfillment center employees 30% more than traditional physical retail store employees while still offering customers the lowest prices,” Amazon writes. “Our work on safety practices has been so effective that it’s statistically safer to work in an Amazon fulfillment center than in a traditional department store.”
A few paragraphs down, Amazon touts the fact that it will prepay 95% of the cost of tuition for courses in areas like aircraft mechanics and nursing for warehouse workers who have been with the company for “as little as three years.”
In a tough economy, that’s a good story. There’s another good story: distribution is a growing industry. The Bureau of Labor Statistics estimates that total warehousing and storage jobs will by 2.35% a year from 2010 to 2020. Jobs involving the movement of materials – think materials handling - are projected to grow by 2.5% a year in that same period.
While a 2.5% annual growth rate does not sound like a lot, the BLS is projecting that the overall labor market will only grow by 1.3% a year over that ten year period. In other words, the market for warehousing and distribution jobs is growing about 90% faster than the overall job market.
As more consumers turn to the Web to do their shopping, more of us are becoming conscious of how distribution impacts our lives. Meanwhile, local governments are boasting of the DCs that are locating to their areas and providing jobs for low-skilled workers. Heck, I live in a small town in New Hampshire where the largest employer is a food distributor.
All that attention ought to be a good thing. Instead, much of the news about our industry has focused on the working conditions in warehouses and distribution centers. None mentions prepaid tuition. Instead, warehouse and distribution work is presented as mind-numbing, back-breaking and demoralizing. Here are three examples.
Last October, the New York Times ran a story about overseas college students who had paid big bucks to see America as part of a cultural exchange program. Instead of visiting the Statue of Liberty, they ended up spending their summer working long hours in a warehouse operated by a 3PL for Hershey.
Last February, Mother Jones ran a story titled “I Was A Warehouse Wage Slave.” It was a first-person account by a reporter who went to work in an Amazon warehouse. By all accounts, she didn’t stick around long enough to get free tuition. That article followed a piece she wrote on an Ohio DC doing distribution for an unnamed online retailer, a place she described as the “warehouse of soul-crushing sadness.”
The New York Times recently ran a piece focusing on the low wages paid to warehouse workers in the DCs near the port of Long Beach.
Reading them, I was struck by two thoughts. The first is that low-skilled manual labor jobs are not for everyone. They have always been arduous and they probably always will be as long as they are done by people and not machines. As someone who has worked in an open air sawmill in the blistering heat of summer and bitter cold of winter, I know first hand what it’s like to come home bone-tired and drained. But some things are what they are: they call it manual labor for a reason.
The larger issue is that as warehousing, distribution and logistics become more important to our economy, the public is paying closer attention to an industry it once largely ignored and doesn’t understand. Those of us in the industry need to tell our story, explain the value we deliver to the economy, including the jobs we provide, even if many of them are low wage. If we don’t define who we are and what we do, others will define the industry for us.
About the AuthorBob Trebilcock Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.
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