Logistics Companies Slash Payrolls in Faltering Market.

"Package carriers, warehouse operators and other logistics companies are slashing payrolls as demand to ship goods wanes while the U.S. economy pivots toward spending on services.

Freight and parcel carriers cut more than 14,000 jobs from May to June, according to preliminary figures released by the Bureau of Labor Statistics Friday. The drop marks the latest in a series of declines that follow a sharp surge in hiring during the pandemic, when strong e-commerce growth triggered a rush to expand supply chains from shipping docks to distribution centers.

The dwindling logistics employment came as the broader economy added 209,000 workers last month, according to the BLS report, a strong result but a slowdown from earlier in the year.

Most of the hiring growth came in services industries, with private service-providing companies adding 120,000 jobs in June, led by 73,000 added workers in private education and health services. Goods-producing businesses added 29,000 jobs, with most of the hiring in a construction sector that has been boosted by gains in home building.

Payrolls for courier and messenger companies, which includes the parcel carriers that deliver online orders, contracted by 7,000 jobs last month, according to BLS. That sector has cut more than 40,000 jobs since reaching a peak last October, during the peak shipping season.

Trucking employment, which jumped by 180,000 jobs during the pandemic, also edged down slightly and has been largely flat since March.

"The volumes aren't there," said Cathy Roberson, president of supply-chain research firm Logistics Trends & Insights. "Retailers are offering buy-online, pickup-in-store, curbside pickup. They're looking for ways to mitigate shipping costs by getting away from delivering orders."

At the same time, she said, companies including package carriers United Parcel Service and FedEx have stepped up automation in their facilities, so "they don't require as many people for sorting."

Roberson said she doesn't expect hiring to accelerate soon, even with the peak shipping season heading into the fourth-quarter holidays approaching. "Up until last year, the carriers started hiring peak-season workers early, even in August," she said. "I don't see that kind of urgency this year."

Warehousing and storage employment fell for the eighth straight month in June, according to BLS, with companies cutting payrolls by 6,900. Warehousing was one of the fastest-growing employment categories during the pandemic, benefiting from growth in e-commerce and a drive by retailers to restock depleted inventories, but hiring has contracted by 55,600 since hitting a peak in June 2022.

Warehousing employment remains far above prepandemic levels even as broader measures show demand is receding at a rapid pace.

Real-estate services firm Cushman & Wakefield said this week that the average national vacancy rate for industrial real estate jumped from 3.5% in the first quarter to 4.1% in the three months ending June 30.

The Logistics Managers' Index in June reached the lowest point in the six-and-a-half year history of the measure, which is jointly produced by supply chain departments at several universities." [1]

1. EXCHANGE --- Logistics Companies Slash Payrolls in Faltering Market. Page, Paul. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 08 July 2023: B.3.