By Clifford F. Lynch
Although not as widely publicized as the truck driver shortage, the warehouse
and DC business has been facing an ongoing labor crunch of its own.
When my phone rings these days, thereís a good chance the caller will turn
out to be someone seeking advice regarding labor needs. But contrary to what you
might expect, these callers arenít truckers desperately seeking drivers; theyíre
DC managers. Although itís not as widely publicized as the truck driver
shortage, the warehouse and DC business has been facing an ongoing labor crunch
of its own. DCs report that itís getting harder and harder to find qualified
workers, and if theyíre lucky enough to find them, itís getting harder to
Particularly hard hit have been warehouse-based logistics service providers (LSPs),
especially those with operations in the nationís heartland. As more and more
of their customers divert freight from congested West Coast ports to gateways on
the Gulf and East Coasts, these companies have been scrambling to build up their
networks of inland distribution centers. But the new facilities are taxing the
labor pools in cities like Dallas, Kansas City, Memphis, St. Louis, and
Indianapolis. Some companies have even had to settle for their second choice DC
locations because of labor availability concerns in their city of choice.
In those regions that are experiencing close to full employment, thereís
not much a DC manager can do about the labor shortage. But those instances are
rare. In most logistics hub cities, the prospective workers are there. It is
simply a matter of finding, training and retaining them.
Where do you find these candidates? They may be as close as your local high
school. As several foresighted individuals and groups have demonstrated, schools
offer a receptive audience to businesses willing to reach out to them. Several
years ago, the late Bob Delaney was instrumental in establishing a logistics
program at Norman Thomas High School in New York. Halfway across the country, in
Colorado, the American Society of Transportation & Logistics (AST&L) has
developed a warehousing curriculum for several Denver high schools. The Boys and
Girls Club in Memphis teaches interested students how to drive forklifts and
perform other DC tasks.
LSPs facing a worker shortage might also try doing what some of the more
innovative carriers have done: seek out new, untapped sources of labor.
Schneider National, for example, has found a new, rich hunting ground within the
AARP, where itís recruiting empty-nester husband/wife driver teams. FedEx has
been quite successful in attracting college students to work nights by providing
Sometimes, however, the issue is not quantity, but quality. Unfortunately, in
many cities, drugs have become a major obstacle to attracting and retaining a
reliable workforce. One warehouse company has developed a creative (and
successful) referral program that tackles this problem head on. Suppose employee
Bill recommends his friend Bob for a position. Bob is required to take a drug
test, which Bill pays for. If Bob fails the test, Bill is out the cost of the
test Ė about $50. If Bob passes the test and stays drug free for 90 days, Bill
gets his money back plus a $100 referral fee. The company has found that
considerably more thought goes into referrals than before the program was
Of course, itís one thing to find employees; itís another to keep them.
To stop the revolving door, one warehouse company we know of has begun paying
100 percent of its workersí medical insurance costs (as well as competitive
wages). Turnover in this workforce has dropped to almost zero since the program
Motor carriers have come up with any number of creative strategies for
attracting and retaining drivers Ė operating driving schools and scheduling
more at-home nights, among them. Perhaps itís time for the warehouse industry
organizations and individual companies to do the same. There is little to lose,
and much to gain.