Companies gear up ahead of the holiday season on expectations of strong online shopping
Companies buoyed by the e-commerce boom stepped up hiring last month as warehouse operators, parcel carriers and other transportation firms added workers at a rapid pace to handle a growing rush of goods ahead of the holidays.
Employment in the transportation and warehousing sector rose by 8,400 jobs from September to October, the Labor Department reported Friday, as the broader jobs market rebounded from the hit from hurricanes in Texas and Florida that idled thousands of workers.
Companies from Whirlpool Corp to Hasbro Inc. are restocking inventories ahead of peak shopping season, signaling expectations for strong demand from consumers. That has lifted imports at U.S. seaports, which rose 4.9% in September from the same month a year ago, and boosted shipping through domestic trucking and rail networks this fall.
Hiring trends suggest companies are preparing for another big season of online shopping.
Meanwhile, job growth continued among businesses such as package-delivery firms that have benefited from the growth of online shopping. Last month, courier and messenger firms added about 5,700 jobs, continuing a six-month expansion as big employers like United Parcel Sercie Inc. and FedEx Corp. ramped up seasonal hiring. UPS expects to ship 750 million packages this holiday season, up 5.6% from last year.
The warehousing and storage sector, including the expanding field of fulfillment centers that get goods in position for delivery, added 3,100 jobs in October. The industry has grown rapidly as Amazon Inc. and others set up vast distribution centers where workers pick, pack and ship online orders. This year, Amazon plans to hire roughly 120,000 seasonal workers in more than 30 states, adding more pressure to an already tight labor market.
“In some markets, unemployment is hovering around 3%, 3.4%,” said John Ness, chief executive at ODW Logistics Inc., a Columbus, Ohio, firm that serves retail, consumer products and industrial customers. “It’s definitely a challenging environment, mostly because we can’t complete all the work we have right now because we can’t get all the positions filled.”
The retail sector in October shed 8,300 jobs, however, as merchants adjusting to changes in the way people shop retool staffing and distribution strategies.
Last month, Wal-Mart Stores Inc. said it would only open about two dozen U.S. stores in the next fiscal year and deepen cost-cutting to free up cash for e-commerce and store improvements. Target Corp. is opening smaller stores in cities and investing more to expand its delivery options, such as next-day delivery of a box’s worth of household essentials for a flat fee.
Competition for labor is also an issue for trucking companies, which lost about 100 jobs last month even as carriers raise pay and offer signing bonuses to bring more drivers on board in what the fleet operators say is a tight hiring market.
Old Dominion Freight Line Inc., one of the biggest carriers in the less-than-truckload sector that hauls goods for multiple customers on each truck, added 762 workers and raised wages in the third quarter. The company saw double-digit growth in shipping volume in each of the first three weeks of October.
“We got on board with trying to hire and bring in good-quality drivers, get drivers through our training program and get them in place,” Adam Satterfield, Old Dominion’s chief financial officer, said on a recent third-quarter earnings conference call.
More will likely be needed. Although trucking demand traditionally peaks in September and October, then tails off after Thanksgiving, “e-commerce has kind of maintained the strong shipping season into the end of the year,” said Mark Montague, a senior analyst with the online freight marketplace DAT Solutions LLC.
Write to Jennifer Smith at jennifer.smith@wsj.com
Source: https://www.wsj.com/articles/transportation-warehousing-firms-ramp-up-hiring-1509738229