The Curse of Labour Shortage: Global Supply Chains Up Against The Wall

supply chain labor shortage

Global supply chains are on a back-breaking path of revival, considering that the challenges – which materialized with the rise of the pandemic – just don’t seem to end. One such challenge, probably the least talked about, is the shortage of labour throughout the world. Logistics disruptions, port congestion, container and semi-conductor shortage and the rising commodity prices – further augmented due to labour shortage – are the major concerns of global supply chain leaders.

Even back in mid-2020, the international shipping industry warned the world leaders about the massive trade log-jam waiting to be caused, with up to 400,000 workers stranded either at sea or land due to travel restrictions. There was an obvious concern for the physical as well as mental health of the workers as crew changes got delayed by months at a stretch.

Similarly, the International Labour Organization (ILO) warned last year about the impending crisis in the road transportation sector worldwide, threatening the stability of already weak supply chains. The ILO report urged the governments to take appropriate measures towards ensuring the health, safety and better working conditions of the workforce engaged in road transportation.

“Transport workers have kept the world’s supply chains and people moving, despite the neglect by world leaders. They have worked through border closures, an inability to return home, a lack of access to healthcare, restrictive quarantine requirements and the complete uncertainty borne from government ineptitude. Frankly, they’ve had enough,” said Stephen Cotton, General Secretary of the International Transport Workers’ Federation (ITF), which represents 19 million transport workers.

On the other hand, around the same time last year as the ILO warning, the Global Aerospace Supply Chain Summit’s 6th edition also highlighted labour shortage as a serious setback for the industry, along with other persistent challenges. “A labour scarcity represents a major risk to our competitiveness,” said Suzanne Benoît, President of aerospace cluster Aero Montreal, which organized the event.

The world also saw a sweeping change in consumer behaviour over the last couple of years, leading to the uptick in demand for E-commerce and its sub-segment, quick commerce. E-commerce and Q-commerce depend mostly on warehouses/dark stores and last-mile delivery manpower. While it has been evident that growth in these segments have created billions of job opportunities throughout the world, it has also raised a few red flags around voluntary attrition due to numerous factors.

Throughout the world, when it was of utter importance that those engaged in the supply chain be prioritized like other front-line workers, it so happened that they did not have access to basic COVID related healthcare. To worsen the matter, the draconian travel restrictions induced agitation across the supply chain workforce, resulting in a drastic spike in the rate of attrition. In fact, since early 2021, almost 33 million Americans have quit their jobs, 3% of the total workforce per month, due to fear and uncertainty caused by the pandemic.

In India, the situation is not that dire, but in definite need of attention. It may seem that ‘The Great Resignation’ and never-ending supply chain hurdles are separate issues. Rather, they’re closely intertwined and deeply impact global supply chains. In the last two years, there has been a huge migration of workers from urban industrial hubs to rural areas, and many migrants have not returned.

Supply Chain has now become the phrase of the day. All eyes are on the supply chain. Through this pandemic, supply chain professionals have become the control tower. Everybody looks to the supply chain organization to make decisions.”

~ Per Hong, Supply Chain Expert and Partner at Kearney

The Supply chain industry has improved much from a branding perspective after the boom of E-commerce. The new complexities and challenges in the supply chain have also created a demand for specialised skills and thereby better job prospects.”

~ Rakesh Rajan, Head Human Resources, Çelebi Aviation

Many frontline positions are infamous for long hours, low pay, and limited opportunities for growth. But most hourly workers aren’t looking for a job where they work overtime shifts with little gain in sight. They want constructive feedback, training, promotions, and ultimately a career path.”

~ Dan Johnston, Co-Founder and CEO, Workstep

This is an abridged version of the special feature that was published in the March 2022 edition of the Logistics Insider magazine. To read the complete article, get your copy of the magazine.

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