Logistics Hiring Contracted to Start the Year

Date: Wednesday, February 10, 2021
Source: Wall Street Journal

Logistics payrolls contracted in January, in an abrupt halt to the sector’s hiring boom in 2020 tied to surging e-commerce demand.

Parcel-delivery, warehousing and trucking companies lost a combined 34,000 jobs last month, according to seasonally adjusted preliminary employment figures released Friday by the U.S. Bureau of Labor Statistics. Those losses came amid tepid gains in the broader labor market and during a typically slower period for distribution and transport operators.

The logistics sector was rising “as the rest of the economy had more of a hard time” recovering from the blow dealt by the pandemic, said Nick Bunker, an economist at job-search marketplace Indeed.com. “This time, you saw that the troubles were more distributed across the labor market,” he said, although industries like logistics and retail “can be sensitive to the holiday roll-off.”

The overall U.S. economy added 49,000 jobs in January, the Labor Department said, while the unemployment rate fell to 6.3% as fewer Americans were looking for jobs. Gains in professional and business services were offset by losses in retail, accommodation and food services.

Employment in goods-producing sectors that push freight through logistics networks slipped in January as manufacturing growth slowed and supply-chain constraints hampered some companies’ ability to meet consumer demand. Makers of durable goods cut 17,000 jobs in January, contributing to an overall loss of 10,000 positions across manufacturing payrolls.

Warehousing and storage companies, which include operators of e-commerce fulfillment centers, slashed 17,400 jobs in January. The cuts followed five straight months of gains when sector payrolls grew by 129,700 jobs, including thousands of workers recruited to pick, pack and ship online orders during the holiday season.

Courier and messenger companies that deliver packages to homes and businesses cut 13,700 positions last month, the second month of declines in a sector that saw dramatic hiring growth to meet accelerated online sales during the coronavirus pandemic.

The Labor Department revised earlier numbers to show that parcel carriers lost 30,900 jobs in December after previously reporting an increase of 37,400 jobs. Courier and messenger company payrolls stood at about 1 million in January, up by 140,100 jobs from the same month in 2020.

Trucking companies cut 2,900 jobs last month, the first hiring decline since April in an industry that was hit hard in the pandemic’s early stage by lockdowns aimed at controlling the spread of Covid-19.

The freight market has picked up significantly since then, prompting fleets to place big orders in the fourth quarter for new heavy-duty trucks to meet rising transportation demand from manufacturing and retail customers. Trucking companies, however, say they are having a hard time finding drivers, which they say is keeping a lid on capacity.

“The driver market is tough,” Derek Leathers, chief executive of Omaha, Neb.-based truckload carrier Werner Enterprises Inc., said in a Feb. 4 earnings call. “If the market continues as we believe it will continue on the freight side, we’re going to be scratching and clawing like everybody else to do our best to bring on drivers.”


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