The labor shortage crisis has hit the logistics and supply chain industry hard, but automation and technology tools are emerging as key strategies to alleviate the pressure.
Following the Great Resignation, businesses are grappling with a significant labor shortage. This is particularly true for logistics and supply chain-focused companies, with 76% of leaders in these sectors reporting notable workforce shortages. The areas hardest hit are transportation and warehouse operations, both of which are labor-intensive.
The labor shortage is not only affecting financial performance and logistics partnerships, but it’s also impacting customer service. 58% of respondents in a recent Descartes survey reported that workforce shortages have negatively affected service levels.
The Role of Automation and Technology
To combat these labor shortages, logistics-focused organizations are turning to automation and technology. A Descartes study found that 54% of supply chain and logistics decision-makers are focusing on automating repetitive tasks and non-value-added services. This strategy aims to reduce the resource footprint and maintain high performance levels with fewer workers.
Technology in Practice
In terms of practical application, driverless vehicles, robots, drones, and automation are all being considered. However, certain technologies have emerged as particularly effective in addressing labor challenges. These include delivery-route optimization, driver mobile productivity, and automated real-time shipment tracking applications.
In the warehouse, robotics and automated guided vehicles (AGVs) are being used to reduce the need for manual labor. Other labor-saving strategies include the use of warehouse management systems (WMS) with barcode-based pick-and-pack workflows, multi-carrier parcel and less-than-truckload shipping automation, and capabilities for real-time visibility into the order journey.
The Impact of AI
Artificial Intelligence (AI) is also making waves in the logistics and supply chain industry. Almost 30% of respondents in the Descartes survey are investigating AI technology, while 53% are planning to deploy, have partially deployed, or have fully deployed their AI implementations.
AI’s ability to analyze vast volumes of data quickly is driving technology innovations in logistics. AI-based capabilities such as event prediction and detection for transportation management have been embedded in logistics technology for years. However, AI’s capacity to evaluate tens of thousands of data points and variables and make learned adjustments will further automate logistics processes, eliminate inefficiencies, and increase worker productivity.
In summary, while the labor shortage presents a significant challenge for supply chain and logistics leaders, technology and automation are emerging as game-changing solutions.
