Help Wanted - Delivery Drivers
Last year’s holiday peak season was all about the need for last-mile capacity while this year’s season may go down as the need for employees according to folks I talked with at Home Delivery World and Parcel Forum conferences.
The help wanted sign for delivery drivers has remained in the window for quite some time - growth in e-commerce sales and potential drivers looking elsewhere for employment - is driving (pun intended) this trend.
Year-to-date through August, e-commerce sales (nonstore retailer sales*) have increased 15.7% year-over-year compared to a 19.5% increase for the same period over 2019. A slower year-over-year growth rate, yes, but still a hefty one as retailers embrace multichannel strategies, Amazon being…well, Amazon…as it continues to amaze sellers, investors and consumers who continue to buy goods at a breakneck speed.
As retailers provide more options to shop for goods, they also are providing options for last-mile deliveries - curbside, BOPIS, same day or next day, and alternative third-party locations.
But, despite retailers’ options and new and existing technologies that improve efficiencies and speed up the last-mile delivery, the result is still the need for more workers.
Delivery delays in the Toledo Ohio area prompted FedEx Ground to issue the following statement earlier this month, “FedEx Ground continues to experience significant package volumes due to the explosive growth of e-commerce brought on by the onset of COVID-19. That, coupled with a severe ongoing industry workforce shortage, has created operational challenges. We sincerely regret any inconvenience caused by delays and appreciate our customers’ patience as we implement contingencies, including securing additional package handler resources, to restore service levels.”
As we approach the peak holiday season, last-mile delivery providers are announcing a hiring spree for what some analysts and delivery providers have described as a “Shipathon”.
Amazon announced it would hire 125,000 in fulfillment and transportation roles throughout the US, on top of the 40,000 corporate and technology jobs announced earlier this month.
FedEx announced it would hire 90,000 in various positions including package handler, operations manager, maintenance technician, forklift driver, customs trade coordinator, and courier. “These positions are critical to the company’s success in meeting rising e-commerce demands from retailers and consumers,” according to the company’s announcement.
UPS plans to hire “more than 100,000 essential seasonal employees to support the anticipated annual increase in package volume that will begin in October 2021 and continue through January 2022.” Positions include package handlers, drivers, driver helpers, and personal vehicle drivers.
The US Postal Service plans to hire for more than 40,000 seasonal positions including city and rural mail carriers, mail handlers, and drivers.
And there are plenty of other last-mile providers including regional small parcel carriers and local couriers that are hiring for this holiday season.
A couple of things to point out in these announcements - note the need for fulfillment workers, package handlers, and other positions that are not necessarily driver roles - these are roles that support the driver -one slip up from any of these roles will have a domino effect and ultimately causing a delivery delay - something that no delivery company and retailer wants, particularly during the holiday season.
All kinds of incentives are being offered to potential employees, most notably:
Signing bonuses
Higher hourly pay
Tuition paid
Opportunity for permanent positions
These new delivery drivers will join a group that has witnessed a dramatic increase in recent years.
According to the US Bureau of Labor Statistics (BLS), year-to-date through August, couriers, and messengers* employment increased 14.03% over 2020, 27.47% over 2019, and 42.80% over 2018.
How many drivers are needed to satisfy our retail spending frenzy is unknown but it is likely turnover is high due to the hours one must work, the physical demands, the pay, and more.
Did you notice in UPS’ press release that they are also hiring personal vehicle drivers (PVDs)? During the 2020 peak holiday season, UPS saved itself $92 million by bringing in 39,000 PVDs according to CEO Carol Tome. An interesting trend and one that we may see more of from companies such as UPS this season.
Some retailers, such as Walmart and Best Buy, are also using their employees to deliver goods to customers’ homes.
There are certainly a number of creative solutions popping up to address the driver situation - which will stick, which will not will be determined by customer demand and preference and also by individual companies when the costs are tallied and the performances are analyzed.
- Cathy
That’s about it for now. Thanks for reading. While I aim for a weekly story, sometimes life gets in the way, so think about subscribing (free) so that you don’t miss anything.
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Some definitions that may be of interest:
*Nonstore retailers are defined by the BLS as establishments including mail-order houses, vending machine operators, home delivery sales, door-to-door sales, party plan sales, electronic shopping, and sales through portable stalls (e.g., street vendors, except food). Establishments engaged in the direct sale (i.e., nonstore) of products, such as home heating oil dealers and newspaper delivery service providers are included in this subsector.
*Couriers and messengers are defined by the BLS as those businesses that provide intercity and/or local delivery of parcels and documents (including express delivery services) without operating under a universal service obligation.