Warehouse labor costs trending downward

When it comes to warehousing costs and capacity, we start the year with a bit of good and bad news. The bad news is that warehouse capacity remains tight, with demand still exceeding supply.  The good news is that, according to international 3PL GXO Logistics, warehouse labor costs are starting to ease worldwide.

warehouse labor costs

GXO is one of the world’s largest logistics companies, operating over 200 million square feet of industrial space across 900+ facilities in 28 countries.  Company CFO Baris Oran recently appeared in a FreightWaves article in which he discussed the current state of warehousing and warehouse labor costs.  Mr. Oran said that labor costs are decelerating as a percent of overall costs, and that the warehouse labor market is not as tight as it has been in the last couple of years.

Mr. Oran also said that the US market is feeling this moderation of labor costs “two to three quarters” ahead of Europe.

Such news is indeed welcome for companies that have struggled to find warehouse labor.

However, just because things are getting easier, that doesn’t mean that the warehouse labor crunch is over.

If your warehousing operation continues to have difficulty finding warehouse workers, there are some things you can do to improve your chances of acquiring the staff you need.

Make efforts to retain current employees. In your efforts to attract new employees, don’t forget to show some love to your current workforce.  By making your employees feel valued, you’ll decrease the likelihood that they’ll leave.

Tap into diverse labor pools. At many warehouses, there are groups of people that are commonly underrepresented in the labor force. These include women, veterans and individuals with disabilities. Companies could do well to expand their efforts at attracting these vital workers.

Invest in automation. Logistics automation isn’t just a dark force that seeks to replace employees. There are many types of automation that assist employees and help them work smarter and more efficiently. Such automation can be attractive to prospective employees.

Lean on temporary agencies. During times of scarce labor availability like we have now, temporary staffing agencies can be vital in providing the employees to keep your operations running smoothly. As an added bonus, temporary employees that perform well and fit your company’s culture could be some of your best new hires.

Turn to a 3PL. If recruiting, hiring and retaining warehouse associates is part of your company’s core skill set, then continuing to operate your own warehouse may make sense. If, however, you find that you struggle to adequately staff your warehousing operations and that your customers’ experiences are suffering as a result, then handing your warehousing operation over to a 3PL may work to your benefit.

3PLs have resources that are solely committed to the recruitment, hiring, training and retention of employees. Additional advantages include the following:

  • Many 3PLs have multiple distribution centers and can cross train employees so that they can fill in gaps at other locations, as needed
  • 3PLs tend to have close working relationships with temporary staffing agencies, helping to ensure adequate coverage during short-term peak volume periods
  • 3PLs are typically well known to prospective employees in their markets, making recruitment easier


Lean on Kanban Logistics to reduce your warehouse labor costs

Kanban Logistics is a trusted logistics partner to companies in the manufacturing, food, pharmaceutical, aerospace, automotive, import and retail industries.  At Kanban, our employees are seen as part of our family. The majority of our warehouse associates have been with Kanban for many years and use that experience to guide the logistics operations of our valued customers. To learn more about Kanban’s warehousing and logistics services, contact us today.




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