Labour shortages in logistics and supply chains impact business operations

A recent study by Descartes Systems Group, titled ‘How Bad Is the Supply Chain and Logistics Workforce Challenge?’ (2024), highlights the ongoing labour shortages affecting the logistics industry. According to the report, 76% of organisations in the sector are facing significant staffing challenges, with 37% categorising the issue as severe or extreme. The study underscores the operational impact of these shortages, particularly in transport and warehouse processes, which are crucial for supply chain efficiency.

Transport operations are among the most affected, with 61% of respondents citing a shortage of professional drivers. Additionally, 56% of organisations report difficulties in maintaining adequate warehouse staff. These shortages not only disrupt daily operations but also hinder businesses’ ability to meet their objectives, especially during peak demand periods such as holiday seasons and promotional events.

The consequences of labour shortages extend beyond internal operations to customer service and financial performance. The report states that 58% of logistics respondents have experienced declines in service quality due to staffing issues. Delays in deliveries, order fulfilment errors, and reduced customer service capabilities have become prevalent challenges. As a result, logistics providers risk losing customer trust and incurring additional costs from complaints and corrective actions.

Jakub Kizielewicz, CEO of the Opteamic Group, a provider of logistics and production process outsourcing, notes that the labour shortages are significantly impacting businesses. He explains that companies reporting severe shortages often need to scale back services, leading to financial losses and reduced market competitiveness.

To address these challenges, many organisations are turning to technological solutions such as automation and robotisation of warehouse processes. Advanced analytics tools are also being integrated to optimise supply chain operations. However, 55% of industry leaders indicate that hiring skilled workers who can operate and manage these technologies remains a major challenge.

Flexible employment solutions are emerging as another strategy to mitigate workforce shortages. Outsourcing logistics processes and employing temporary workers provide businesses with greater adaptability, especially during periods of high demand. According to Kizielewicz, adopting a flexible approach to workforce management enables companies to maintain operational efficiency without committing to permanent staff increases.

The Descartes report underscores the need for a comprehensive response to workforce challenges in supply chains. Businesses must invest in both technological advancements and strategic human resource management to navigate the increasing demands of the market. Collaborating with specialised agencies for process outsourcing and temporary staffing may play a crucial role in building resilience against labour shortages.