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Redesigning global supply chains & talent management in the logistics industry

Redesigning global supply chains & talent management in the logistics industry

Written by:
Gregor Towers
Date created
September 5, 2023
Last updated:
April 7, 2024
5 min read
Table of content
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Key takeaways

• The logistics industry struggles with a skilled labor shortage and challenges in attracting talent due to perceptions of manual work.

• Companies are expanding their supply chains to increase efficiency, leading to a high demand for talent in areas such as shipping, storage, and warehouse distribution.

• Automation, AI, and green initiatives are being implemented to improve supply chain agility, sustainability, and reduce carbon emissions.

• Poor leadership and inefficient talent development hinder supply chain innovation, highlighting the need for upskilling programs and leadership skills.

• Reskilling internal talent is seen as a more effective and cost-efficient solution to fill job vacancies and maintain company values and strategy.

The logistics industry has a shortage of skilled labor. Typically perceived as unattractive, manual and laborious employment, attracting talent to the industry is challenging. 

And logistic businesses need more talent. As they expand areas in their global supply chain such as shipping, storage or warehouse distribution to increase efficiency, they have to manage talent resources and find leaders with the skills to lead new operations. 

Therefore, companies are faced with two options: spend vast resources hiring talent from the external market or develop scalable training solutions to reskill internal talent for new roles. 

Download the upskilling checklist for the logistics industry

Industry-wide talent shortage as companies take over the whole supply chain

Logistic companies are seeing service demand grow. To deliver a higher volume of goods quicker and at a lower cost, businesses are dependent on their supply chain’s efficiency. 

However, supply chains are prone to error and high complexity. With multiple companies involved in shipping a product from the manufacturer to the retailer, any breakdown in collaboration leads to additional costs and delayed delivery to the consumer.  

Therefore, companies are taking over more of the supply chain. Amazon, for example, initially specialized in the local distribution of goods to individual retailers and customers. But as the pandemic disrupted supply chains and increased the price of a container from $1.800 to $11.000, Amazon invested $61 billion in cargo shipping to beat competitors on pricing.  

While for Maersk, traditionally a specialist in shipping and cargo transportation, the opposite is true. In 2023 the global company announced plans to increase spending in warehouses and distribution infrastructure, including a $174 million investment to open their first logistics center in China. 

Therefore, as logistic businesses fill the gaps in their supply chains to create end-to-end solutions, they are also increasing their job openings. And despite a decrease in employment opportunities post-pandemic, they remain high, with the greatest need in Germany. 

Job openings in logistics across Europe 

However, the pool of logistics talent is failing to match companies’ service demand. For example due to an aging workforce, logistics businesses are struggling to source freight drivers. In Europe 45% of freight drivers are 45 or older and just 9% are aged under 25. 

And the industry’s image compounds labor shortage. Low pay and manual work fixed in one location such as warehouses makes attracting talent to the industry a critical issue for senior management. 

Automation improves supply chain agility & sustainability 

AI, however, offers a solution to processing an increased volume of goods. Logistic companies can integrate AI into storage and warehouse management systems to create more sophisticated and reliable supply chains to serve clients. 

By 2026 75% of large warehouses will use smart robotics to decrease manual labor. And AI solutions are capable of processing 2 million data records to scale freight capacity up or down based on the day of the week, transportation time, and weather. 

But AI improves more than a supply chain’s agility. The logistics industry has a high carbon footprint and is a major contributor to transport emissions with heavy duty trucks.

Global CO2 transport emissions

With more emphasis on greener shipping, logistics companies are investing in zero-carbon transport such as drones for last mile delivery - the most expensive part of shipping - and optimizing route planning with AI and data analytics to reduce road freight. 

Lack of talent development & poor leadership obstruct supply chain innovation 

Despite logistics companies looking to expand and innovate supply chains, only 28% of logistics companies rate themselves as digitally advanced. The top challenges in building a digital culture - talent resources, financial investment and poor leadership vision - expose the obstacles to transformation:

Where are the biggest inhibitors for building digital operations capabilities in your company? 

The lack of a ‘digital culture’, training and talent expertise is a major challenge for transportation and logistics companies looking to transform their supply chains. And if we investigate “lack of leadership from top management” and “insufficient talent” further, leadership skills are a weak point. 

How logistics talent experience their leaders. Based on 1.007 respondents

Poor leadership skills, especially in feedback and the ability to build empathy with teams, is harming talent’s motivation and the ability to innovate logistics operations. As we move down the hierarchy, low quality leaders combined with a lack of structured career development further compounds talent’s low engagement levels.

Internal reskilling shifts company strategy, fills vacancies & increases retention  

Logistic companies need solutions to attract and retain talent as they open more distribution centers and increase shipping capacity. To fill employment opportunities, redistributing internal talent who understand the business is a more effective and cheaper solution than hiring in the external market. 

And since upskilling programs support talent transitioning to other departments, it also allows businesses to maintain company values, collaboration and strategy throughout their global workforce.  

40% of surveyed logistics talent want more clarity on the company vision, increasing to 46% of the VPs, and 60% want the level of collaboration to improve, peaking at 70% of the VPs

With new departments and more automation, the industry also has to upskill leaders to create high-performing and innovative teams. They need skills in constructive feedback - rated the lowest - to build trust, confidence and psychological safety in their teams. 

And as non-leadership talent experiences a lack of structured career mobility, upskilling and reskilling ensures talent has the skills for new internal opportunities. Younger talent and trainees need foundational skills in data literacy, commercial thinking and multicultural awareness for a long-term career in logistics. 

While professionals and first-time leaders have to start developing coaching and feedback skills to develop a leadership career as well as advanced strategy skills, including presenting and decision-making. 

Logistic firms need to mitigate labor shortage & reskill talent for supply chain expansion  

Global trade is dependent on the efficiency of logistics supply chains. Therefore, progressive businesses are focused on integrating automation to expand supply chains and manage the growing volume of consumer goods. 

While automation offers the industry more market value, there is even greater pressure on companies' talent attraction, development and digital strategies. The industry needs solutions to source and redistribute internal talent for new areas in the supply chain. 

However, the biggest change companies need to address is leadership skills and structured career development. Talent’s feeling of low appreciation is linked to poor leaders who lack skills in feedback and motivating teams. 

With structured global academies and reskilling programs, logistic companies can upskill leaders to improve their capabilities and offer talent alternative career paths as well as digital training to fill job vacancies. 

Therefore, progressive logistic companies can be redefined as such - they will not invest in automation in isolation, but in tandem with talent’s skills, new business strategy and company culture. 

Download the upskilling checklist for the logistics industry

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