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Tom’s Takes: Labor Market Recap and Summer 2022 Update

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On a recent trip to Sydney and Melbourne, Australia; I had the opportunity to meet with several Australian and New Zealand (ANZ) based retailers, manufacturers, distributors and third-party logistics providers. In researching those companies and the macro-economic issues facing that region, it was not surprising that the supply chain issues that logisticians are facing in North America are identical to the ANZ region, including:

  • Lack of labor due to low unemployment
  • Increased wage rates
  • Consumer desire for same-day shipping
  • Interest in automation opportunities

During a breakfast roundtable with enVista’s partner, Blue Yonder, Vice President Daniel Kohut and I met with several Blue Yonder warehouse management system (WMS) clients, briefing them on the following topics:

  • The state of the ANZ labor market
  • Advancements in warehouse management systems (WMS) and labor management systems (LMS)
  • Associate recruiting and retention strategies
  • Implementation deployment strategies of an LMS with a WMS
  • Benefits of an LMS implementation
  • Justification strategies for automation usage

Tom’s Take “The competition for labor will continue to influence the global economy with near-record unemployment levels and more job openings than available labor globally. Increased wage rates continue to be the top strategy to address attrition, retention and recruiting needs.

Companies will need to continue to innovate and adapt their human capital policies and look for strategic ways to attract and retain their workforces through a variety of benefits including offering incentive-based pay, flexible working shift, college tuition reimbursement and covering expenses for employee vacation holidays.

Additionally, companies should be evaluating opportunities to introduce automation into their facilities to help ease the lack of labor constraints and need for same day delivery for markets such as fast fashion, grocery, pet care and pharmaceuticals.”

Pacific Maritime Association (PMA) & International Longshoreman & Warehouse Union (IWLU) Update

As reported an in earlier Tom’s Takes blog post, the PMA and IWLU entered into contract negotiations on May 10 to seek agreement on a new multi-year contract covering wages, benefits, working hours and the use of expanded automation capabilities within the west coast ports operated by the PMA.

As of mid-June, contract finalization had not been reached with negotiations continuing as the July 1 deadline is now less than one week away. A statement was issue by the parties citing their desires to avoid port disruption stating, “The parties remain focused on and committed to reaching an agreement,” according to the joint statement.

Tom’s Take: “Both sides have been at the bargaining table for just over seven weeks and are committed to reaching an agreement, which may extend beyond the July 1 expiration of the current contract. Retailers and distributors should continue to look for alternative ways in bringing in their goods into the U.S. to mitigate the supply chain and inventory disruptions that would occur if the west coast ports are shut down during a potential walkout.”

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