Even though the economy is rapidly recovering from the covid 19 pandemic, many things will never be the same. One of them is the labor dynamics. Many professionals and skilled workers were affected by the pandemic and left the traditional workforce to look for new alternatives.
As many employees left, companies struggled to find people to fill these positions. This happened in every industry. In the transportation and logistics industry, the impact of the labor shortage caused even more delays.
Some areas of the logistics sector were more affected by the pandemic than others. For example, the warehousing and distribution areas needed help retaining and finding talent. These positions needed to become more attractive for those employees looking to further their careers.
The impact of labor shortage on transportation
Let’s discuss the top 3 most critical implications of the labor shortage.
- Supply chain delays
The supply chain has experienced incredible pressures and delays due to covid 19. When countries started to impose lockdowns, workers couldn’t leave their homes, and everything started to fall behind.
With people at home, many started looking to buy things to accommodate their homes, which meant higher demand for goods. This demand was not being covered due to the decreased workforce.
Once the lockdowns stopped, and workers returned to their job, many questioned if they wanted to work. Many decided to leave the workforce to do other things that generated more value, which caused more delays and pressure on the supply chain.
- Higher costs
If every part of the supply chain is delayed, it’s only natural that costs increase since everything takes more time. As there’s a limited number of workers in warehouses and ports, as well as drivers, goods are taking longer to arrive at their destination. Having your goods stuck in a port for more than a couple of days is very expensive and not being able to unload them means more waiting time for truck drivers.
- Capacity issues
Most transportation companies are struggling to provide the capacity shippers are looking for. But without enough truck drivers, this becomes a challenge. Additionally, the drivers are not where they are supposed to be. So, there’s an issue with truck allocation. The few truck drivers transporting freight are not where the demand needs them to be, which generates further delays.
To overcome these critical supply chain issues, companies must focus on retaining their drivers and creating allocation strategies aligned with the demand. This will ensure more efficient processes and the path to recovering from the covid-19 havoc.