Companies in both developed and developing countries are struggling with a serious shortage of proficient workers in logistics, and the situation could worsen this year, according to the World Bank, who sounded the alarm in its latest report.
Two of the key problems for this, according to Professors Alan McKinnon, Christoph Flöthmann, Kai Hoberg, and Christina Busch of Kühne Logistics University, are finding staff with qualifications and abilities suiting the demands of logistics companies, and inadequate knowledge of logistics among new and current workers.
Logistics now plays a vital role in global trade, but it is not even part of the school curriculum, and universities have been slow to encourage it, said the professors, at a recent conference in Bremen. This is because many students are not attracted to logistics. It has a poor image as far as business skills are concerned, they added.
Referring to World Bank and individual country surveys, the professors said there is enough evidence worldwide to show there is a huge shortage of skilled professionals in the logistics industry.
The World Bank says there is a shortage in all aspects of logistics from truck drivers to supply chain management posts. The situation is worse in developing countries.
In Germany, logistics is becoming a major industry with three million workers, and yet it has 57,000 jobs vacant, reported Telematics Magazine, highlighting the shortage problem.
Telematics noted that a survey by the Department of Labour Economics at the University of Maastricht showed that only 2% of the 20,000 graduates wanted to enter the logistics field. Graduates have a poor outlook for the logistics industry. They are also disenchanted with negative issues such as CO2 emissions, congestion, noise and low wages associated with the industry. However, the number of women interested in logistics is rising, as reflected by a survey of Bundesvereinigung Logistik (BVL), which showed that 30% of its students were female.
How can the logistics industry combat the shortage of skills and attract qualified talent?
The World Bank recommends setting up training institutes using IRU Academy resources. It suggests wider use of these resources to mitigate the issue.
More time and resources must be devoted to logistics, said the report, and experienced staff in developed countries should share their skills with counterparts in developing countries.
The typical way of attracting recruits to logistics, like advertising, is apparently not working. One company decided to take a different approach – they took the step into social media. They used Facebook to talk to drivers and other applicants, explaining the benefits of joining them, and got a huge positive response, reported Telematics.
In the US, the industry finds it difficult to recruit drivers, reported JOC.com. In 2016, the Council on Port Performance in the Port of New York and New Jersey feared the situation could worsen and so partnered with a local county college to launch a logistics training programme.
The skills shortage continues to bite in the UK, and it could worsen as the UK continues down the path to Brexit.
The driver shortage is the biggest challenge for the UK transport sector, said a Paragon Software Systems survey, reported Encorepersonnei. Nearly half the respondents indicated the lack of experienced drivers and other workers could result in a company’s success or failure, compared to one-third of respondents last year.
A third of the survey respondents said more initiatives are needed for education and training while a quarter of the respondents believed better wages and working conditions were required.
To change negative perceptions of the logistics industry, some respondents suggested potential employees need to be educated about the industry and the technology it uses.
Meanwhile, the survey showed the second biggest challenge to the industry was transport costs followed by congestion, lack of investment and transport curbs. Survey results also suggest demand for better service standards has increased substantially from last year. There were calls for greater visibility, faster deliveries and real-time communications.
To help sustain the industry’s estimated 5% annual growth rate, the World Bank called for countries to provide more funds and further education to students on how the new logistics industry works.
Even with the spread of automation the logistics industry is heavily dependent on the performance of its staff, whether for managerial, administrative, or blue-collar jobs, such as trucking or warehousing, the report stated.
Quantity and quality of the workforce is the key ingredient to a logistics company’s success. An incompetent workforce will affect service, reduce productivity and reduce trade competitiveness, the World Bank report concluded.
A recent article in the UK’s Financial Times by Gillian Tett, entitled ‘A shortage of US truck drivers points to bigger problems’, highlights how the shortage of truckers in the US is systematic of “structural bottlenecks that cause headaches for the Federal Reserve”. The article suggested labour shortages are emerging in other sectors of the American economy, causing major concerns for economic policymakers.
Tett bemoaned the fact that many would-be truckers are often compelled to pay for their training. She suggested companies should subsidise training programs at local colleges. Finally, Tett said one of the major factors stifling America’s economic prospects is shortage of particular skills – not the need to impose tariffs or tougher immigration.