Descartes’ Study Reveals 76% of Supply Chain and Logistics Operations are Experiencing Notable Workforce Shortages

Rhea-AI Summary

Descartes Systems Group (DSGX) released findings from its study indicating that 76% of supply chain and logistics leaders are experiencing notable workforce shortages, with 37% characterizing the shortage as high to extreme. The transportation and warehouse operations are the most affected, with 61% and 56% reporting resource shortages, respectively. The study also shows that knowledge workers are the hardest to hire, impacting business performance and customer service levels. The impact of workforce shortages varies by financial performance, growth, and employee retention programs.

Insights

Supply Chain Management Expert

The persistent workforce shortages in the supply chain and logistics sectors are symptomatic of broader labor market challenges. The high percentage of companies reporting difficulties in filling roles, particularly in transportation and warehouse operations, underscores the labor-intensive nature of these fields. The struggle to hire knowledge workers, who are essential for the increasingly technological and data-centric supply chain operations, suggests a skills mismatch in the labor market. Companies may need to invest more in training and upskilling programs to bridge this gap. Furthermore, the impact on customer service performance could have a ripple effect, potentially leading to decreased customer satisfaction and loyalty, which in turn could affect long-term revenue streams.

Human Resources Strategist

The survey's findings highlight the necessity for innovative hiring and retention strategies in the supply chain and logistics sectors. With the competition for talent being fierce, companies must differentiate themselves as employers. This could involve offering competitive wages, flexible work arrangements and clear career progression pathways. Moreover, the correlation between employee retention programs and business performance suggests that companies should prioritize workforce stability to mitigate the adverse effects of high turnover rates on their operations and financial performance.

Technology Integration Specialist

Technology plays a pivotal role in addressing workforce challenges within supply chain and logistics operations. The survey indicates a need for technology-enablement to compensate for labor shortages. Automation, artificial intelligence and advanced analytics can reduce the reliance on manual labor and improve efficiency. However, the successful integration of these technologies requires a skilled workforce capable of managing and interpreting data, underscoring the importance of knowledge workers in modern supply chain strategies. As such, companies should consider investing in technologies that can augment their workforce and improve operational resilience.

Transportation & Warehouse Operations Most Challenged by Resource Shortages

ATLANTA, Georgia and LONDON, U.K., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Descartes Systems Group (Nasdaq:DSGX) (TSX:DSG), the global leader in uniting logistics-intensive businesses in commerce, released findings from its study How Bad Is the Supply Chain and Logistics Workforce Challenge?, which indicates that 76% of the supply chain and logistics leaders surveyed are experiencing notable workforce shortages in their operations. What’s more, 37% of respondents would characterize the resource shortage they face as high to extreme. While the issue is affecting companies’ financial, peak season and logistics partner performance, the survey also showed it’s taking a toll on customer service performance, with 58% specifying that workforce shortages have negatively impacted service levels.

While the competition for supply chain and logistics resources is widespread, the acuteness of the workforce challenge varies by organizational function. According to survey results, the areas suffering the most from resource shortages were transportation operations (61%) and warehouse operations (56%). While these areas are admittedly highly labor-intensive, findings also revealed that 55% of supply chain and logistics leaders said knowledge workers are the hardest to hire—and they are becoming increasingly important as supply chain and logistics operations become more technology-enabled and data-driven.

“With economies cooling and COVID more manageable, the general thinking has been that companies would see the workforce shortages of the past few years subside; however, this does not appear to be the case,” said Chris Jones, EVP, Industry at Descartes. “The study shows that, post-pandemic, supply chain and logistics organizations continue to struggle getting the labor, knowledge workers and leaders they need to thrive. With business performance driven by both the quantity and quality of the workforce, supply chain and logistics leaders need to rethink not just their hiring and retention strategies but also how technology can help to mitigate current and future workforce challenges.”

Results also showed that the impact of workforce shortages varies by financial performance, growth, management’s perceived importance of supply chain and logistics operations, and the success of employee retention programs. There’s evidence that business performance is interrelated—and that the impact of workforce shortages can be mitigated by business leaders understanding the full potential of their supply and logistics operations and the importance of employee retention to supply chain and logistics performance.

Descartes and SAPIO Research surveyed 1,000 supply chain and logistics decision-makers in late 2023 across three sectors: a) manufacturing, distribution and retail; b) carriers; and c) logistics services providers. The goal was to understand the nature of any workforce shortages they were facing and the impact of resource constraints on their operations and business success. Respondents were based across nine European countries, Canada and the United States, and held Owner, C-Suite, Director and Manager-level positions in their respective organizations. For the full report, read How Bad Is the Supply Chain and Logistics Workforce Challenge?

About Descartes

Descartes (Nasdaq:DSGX) (TSX:DSG) is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, security and sustainability of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, track and help improve the safety, performance and compliance of delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world. Learn more at www.descartes.com, and connect with us on LinkedIn and Twitter.

Global Media Contact
Cara Strohack                                                                     
Tel: +1(800) 419-8495 ext. 202025                                 
cstrohack@descartes.com  

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking information within the meaning of applicable securities laws (“forward-looking statements”) that relate to Descartes’ solution offerings and potential benefits derived therefrom; and other matters. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the factors and assumptions discussed in the section entitled, “Certain Factors That May Affect Future Results” in documents filed with the Securities and Exchange Commission, the Ontario Securities Commission and other securities commissions across Canada including Descartes’ most recently filed management’s discussion and analysis. If any such risks actually occur, they could materially adversely affect our business, financial condition or results of operations. In that case, the trading price of our common shares could decline, perhaps materially. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purposes of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

FAQ

What did Descartes Systems Group's study reveal about workforce shortages in the supply chain and logistics industry?

The study revealed that 76% of supply chain and logistics leaders are experiencing notable workforce shortages, with 37% characterizing the shortage as high to extreme.

Which areas in the supply chain and logistics industry are most affected by resource shortages according to the study?

The study shows that transportation operations and warehouse operations are the most affected, with 61% and 56% reporting resource shortages, respectively.

What impact do knowledge workers have on supply chain and logistics operations based on the study?

The study shows that knowledge workers are the hardest to hire, impacting business performance and customer service levels.

How does the impact of workforce shortages vary based on the study?

The impact of workforce shortages varies by financial performance, growth, and employee retention programs.