Labor shortages occur when the demand for workers in a particular industry exceeds the supply of people who are qualified and willing to take the job. In logistics, labor shortage puts a strain on the supply chain, making it difficult for businesses to fulfill orders. Learning how to work through labor shortages keeps your business competitive and your customers satisfied.
Warehouse Inefficiencies
Labor shortages can lead to warehouse inefficiencies when there aren’t enough workers to handle all the warehousing processes. This includes receiving and storing inventory, sorting orders, picking, packing, researching courier availability, and managing returns. The best way to work through this problem without the quality of your order fulfillment service taking a hit is by implementing automation technology. This technology fills in the gaps created by insufficient staff and keeps your warehouse running smoothly. Automating warehousing processes can be anything from incorporating a warehouse management system (WMS) in your enterprise resource planning system (ERP) to purchasing infrastructure like automated storage and retrieval systems (AS/RS), drones, conveyor belts, pick-to-light systems, etc.
Order Fulfillment & Delayed Shipments, Higher Costs
The unavailability of workers to carry out essential logistics tasks inevitably leads to delayed shipments. For example, international port delays due to insufficient dockworkers will have a trickle-down effect on the order fulfillment processes of many businesses before the products even reach their destination countries. Labor shortages in factories hamper production, leading to product undersupply, backorders, and longer delivery times. These shortages create a scarcity in the logistics market. Scarcity causes a hike in shipping rates that eats into your profit margin.
As an ecommerce business owner, there’s not much you can do to mitigate these issues. However, you can communicate with your customers to help them understand that the prevailing circumstances are out of your control. You can also offer store pick-up to eliminate the need for deliveries until things settle a bit.
Truck Driver Shortages
The American Trucking Association (ATA) recently reported that the industry is experiencing a shortage of about 80,000 drivers. The reasons behind this problem include the harsh trucker lifestyle, the high number of retiring drivers, and the availability of less tedious jobs. Most ecommerce businesses rely on shipping trucks to deliver their packages to customers. Without enough workers to drive these trucks, fulfilling customer orders via LTL shipping USA becomes a nightmare. You can work through this issue by consolidating your orders, which helps you make the most use of any shipping opportunity you find.
Some of the Most Common Warehouse Inefficiencies
Warehouse inefficiencies are one of the most popular causes of supply chain issues in the logistics industry. They lengthen the fulfillment times of businesses, resulting in lower customer satisfaction and an overall decrease in revenue. Here are some common inefficiencies that are peculiar to warehouses and how they can be corrected.
Manual order processing
Processing orders manually is an error-prone, time-consuming process that can also increase fulfillment costs. Complete reliance on human resources in warehousing procedures creates room for errors like misspelled addresses, poor inventory control, inefficient returns management, wrong items in packages, etc. These errors will result in the shipping of incorrect products, delayed shipments, excessive backorders, double shipments, etc. Not only do these problems tank customer satisfaction; but they also require extra money and resources to rectify.
Today’s market is highly competitive, and modern customers have no patience for slow order fulfillment. Therefore, warehouses must employ strategies to automate their procedures and keep errors to the barest minimum. For example, using autonomous robots that perform tasks like picking, packing, and transporting packages without requiring the assistance of a human operator significantly boosts productivity and shortens delivery times.
Inefficient workflows
Inefficient workflow in warehouses can slow down the supply chain or even grind it to a halt. With many activities happening at once in a warehouse like picking, sorting, and labeling, inefficiencies in one activity will have a ripple effect on the others. Common causes of workflow problems include trouble accessing information, outdated technology, a sudden spike in demand, prolonged hiring procedures, repetitive activities, etc. Employing automation technology streamlines warehousing processes and smoothens workflow, which boosts productivity and reduces operational costs.
Training and onboarding processes
While hiring new warehouse employees can assist in tackling labor shortages, new hires usually need to undergo an onboarding process to properly understand their job descriptions. Generally, onboarding new employees takes at least three months. During this time, the workers are only about 25% effective at executing tasks assigned to them. This shows that although increasing the number of warehouse employees will reduce the effects of labor shortage, the results can take anywhere between three months and a year to reflect in your logistics processes.
How GoShip Can Help
GoShip is a digital freight marketplace that helps small to mid-sized businesses meet their logistics needs. The platform partners with over 45,000 professional and experienced carriers who offer full truckload and less-than-truckload shipping services (LTL freight quote) at competitive prices. Visit the GoShip website and enter your shipment details in the free quotation tool to get an FTL or LTL freight quote from a carrier around you.