From Our Print Edition

Grocers, in general, have a supply chain people problem. And odds are that staffing challenges are even more pronounced in cold-chain operations, which is bad for business.

A December survey of 1,000 supply chain and logistics leaders by Descartes Systems Group, a logistics and supply chain technology firm based in Waterloo, Ontario, found that more than three-quarters were experiencing significant workforce shortages in their organizations. Roughly half of those (37%) said the labor shortages ranged from high to extreme.

Labor shortages have real-world impacts with 58% of respondents reporting that customer service had suffered as a result. Thirty percent said customer service was extremely (8%) or very impacted (22%) because of insufficient labor. Not surprisingly, higher-performing companies with lower employee turnover rates were more likely to see their supply chain operations as a competitive weapon compared to laggards.

‘There are more jobs than people to fill them. The (number of open jobs) may not be as high as two years or 18 months ago, but it’s still way beyond what it was pre-pandemic.’

Descartes’ research also showed that labor is not just a retailer problem; it affects manufacturers, 3PLs, and other supply chain partners as well. Only 9% of respondents said that their logistics partners were unaffected by labor shortages. More than a third (36%) were extremely (12%) or very impacted (24%).

Transportation (61%) and warehouse operations (56%) were the two functions most heavily affected by labor shortages. Transportation planning (51%), inventory/ distribution planning (51%), customer service (42%), and demand planning (37%) were also highly impacted.

The relative difficulty filling open positions also varied by function, with 40% saying that it’s hard, very hard, or extremely hard to find warehouse workers. Forty-seven percent said that it’s hard to extremely hard to recruit drivers. Anyone operating a cold chain warehouse can confirm how difficult it is to recruit and retain labor in these facilities.

However, the most difficult positions to fill include supply chain and logistics knowledge workers, e.g., planners and analysts (55%) and supply chain and logistics managers (54%).

“There’s all this information around the movement of goods. We can track deliveries and real-time GPS; we get so much data now to understand operational performance and customer service,” says Chris Jones, executive vp, industry, at Descartes. “You need skilled people to be able to leverage that data to help you understand your performance, look at trends, and be more proactive and insightful.”

He adds that automation is increasingly being emphasized at retail to free knowledge workers up to do what they do best. “Knowledge workers spend a lot of time not doing knowledge work,” says Jones. “They spend a lot of time doing lower-value data collection, data assembly and running reports. Productivity in that space has not been great and there is a lot of energy required to get to the good stuff.”

WHERE HAVE ALL THE WORKERS GONE?

Jones says that recruiting and retaining logistics and supply workers has become difficult for multiple reasons. He points to the Bureau of Labor Statistics jobs report for January, which showed employers adding 353,000 jobs following 2.7 million in 2023.

“Economists got it wrong for the 24th or 25th month in a row,” says Jones. “We have really strong hiring…because there are more jobs than people to fill them. The (number of open jobs) may not be as high as two years or 18 months ago, but it’s still way beyond what it was pre-pandemic.”

Chris Jones

He also believes that new attitudes around what makes a particular job attractive, retiring baby boomers and a “disastrous immigration policy” are all adding to the challenge of staffing positions throughout the supply chain. Cold chain recruitment is further complicated by the fact that few people want to work in zero or below-zero-degree environments.

“The other thing that’s really changed the dynamic is people don’t just work in a single industry anymore,” explains Jones. In the past, “A warehouse worker might leave and go down the street to the next warehouse. That still happens, but today, that same worker might say ‘I used to be a waiter, and a restaurant job is paying $20 an hour. I’ll go do that.’ You’re competing for not just the talent pool in your industry, but the talent pool everywhere else.”

The number of commercial truck drivers aging out of their jobs is also a major challenge for grocery retailers and others in the cold chain space. This has particularly impacted over-the-road, AKA long haul, truckers.

‘You’re competing for not just the talent pool in your industry, but the talent pool everywhere else.’

RETENTION, RETENTION, RETENTION

“Retention is so huge in this space. Companies really need to look at their resources, even as they automate, so they can redeploy good quality people,” says Jones.

“Money is only part of the story, especially with younger generations that are interested in the technology you use. They don’t want to get stuck. They are looking for tools they can grow with.”

Jones points to warehouses that have gone from minus 10 to 20 degrees and now operate at zero degrees as the type of progress that appeals to workers. He further points to the value of “soft types of automation” that enable warehouse workers to spend less time in the cold while being more productive in the process. Automated storage and retrieval systems (ASRS) are great, but they don’t make sense for all operations.

Lisa Wolfe, senior vp of Americas for Ontario, Calif.-based ColdStaff, a cold chain labor and talent solutions firm, says her company deals with the special challenges related to filling food logistics positions every day. The company is part of the Labourforce Group, based in New South Wales, Australia.

Lisa Wolfe

Wolfe says that the pace of implementing automation has picked up in cold chain operations since the pandemic. Even so, “There’s still a huge need for humans to be hands-on, suit up and work in these freezers.”

So what does it take to recruit and retain workers?

“Companies are having to get very creative with incentives to attract and keep talented workers. I interview operations and senior logistics managers daily about what they’re looking for in workers,” says Wolfe. “Some things can be taught and trained, but what you can’t teach is the motivation and the enthusiasm to come and work a job like this.”

Wolfe says companies are testing different types of shifts to better fit with workers’ personal lives and improve the work/life balance.

“Money isn’t everything,” she says, but employers understand the need for competitive wages, knowing that skilled laborers are not confined to one industry when pursuing career advancement.

Wolfe says employers’ major complaint is about a lack of qualified talent in skilled labor positions. She said that retailers and other cold chain employers need to take a long view and get out to schools, as early as junior high level, to let kids know that there “are great opportunities and great money out there if they want to go in a different direction with their career and be a skilled labor person.”