76% of Supply Chain & Logistics Operations are Experiencing Notable Workforce Shortages

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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 (pictured left). “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?