As the industry expands, it becomes apparent that this area of the commercial world is filled to the brim with opportunities of growth and success for 3PLs – regardless of whether they are newer companies or established third party logistics services providers. 

If you are looking to gauge the exact extent of growth in the 3PL industry, you must turn to statistics. Statistics will help you understand the 3PL industry better as well as understand the areas within your own business that you need to work on the most in order to grow and expand. 

Here are the top stats for growth opportunities for 3PL companies in 2022 – and we hope they can help you take your business in the right direction.

3PL Industry Statistics to Always Keep in Mind

Write these on post-its, log them in your phone or email them to your teammates – make sure you know these statistics by heart if you plan on making your place in the 3PL world. 

• The current revenue for the global 3PL industry is USD 1,998.73 billion. In 2020, this figure was USD 961.8 billion, which means that the industry has significantly grown in the last 2 years. (Grand View Research)
• The global revenue for the 3PL industry is expected to reach more than USD 1.755 trillion by 2026. More and more 3PLs are popping up every single day, and soon it will be one of the biggest industries in the market. (Mordor Intelligence)
• Asia Pacific is the biggest 3PL market, at USD 483.6 billion revenue. This particular region has experienced a dramatic increase in its logistical infrastructure in the past decade and continues to grow. Asia is the most populous area in the globe – China and India make up the major chunk of eCommerce transactions all over the world, hence the APAC region is considered to be the safe haven for 3PLs. (GlobeNewswire)
• The largest share in the 3PL market is held by the roadways segment, closely followed by the seaways and the railways segments. The smallest share is held by the airways segment. This segmentation can be explained by the fact that roadways have seen significant improvement in the past few years. This, paired with advanced transport management systems as well as warehouse management systems makes it easier for businesses to rely on roadways as the primary mode of transport. (Fortune Business Insights)
• DHL is the top 3PL provider in the world. In 2021, DHL announced record revenue at USD 30 billion. The operating profit, free cash flow, as well as the dividend witnessed monumental improvements. It is reported that these improvements and the profitable growth of DHL are only increasing as we move forward into 2022. (DHL)

3PL Order & Outsourcing Statistics for Setting the Right Standards

Don’t shoot in the dark when it comes to order processing and outsourcing… have a look at these stats that will let you know the real deal as it is. 

• A decade ago, only 46% of companies that worked with 3PLs were Fortune 500s. Today, reported 90 percent of companies that choose to work with 3PLs are Fortune 500s. (Shopify). It’s important to remember that this year, the revenue threshold for the 2022 Fortune 500 list was $6.4 billion, up 19% from last year. This means that there is a huge influx of orders Fortune 500s get that 3PLs are entrusted to deal with. (Cision PR Newswire)
• In 2021, 85% of 3PLs experienced growth in order volumes – and by the time 2022 ends, we are likely to witness an increase in these figures. More orders means more customers, which means that 3PLs can expect a relatively smoother journey towards success (DC Velocity).
• 45 global corporations reviewed by NTT Services plan to increase outsourcing after the pandemic (DC Velocity). These figures include outsourcing for logistics, since logistics is the most impacted aspect of order fulfilment when it comes to Covid.
• According to BCG, 62% of companies are willing to renegotiate outsourcing contracts (Findstack). This means that there is a boost in customer retention, and more businesses are satisfied with outsourced services. 
• 54% of the companies surveyed by a report from PA consulting have stated that they have witnessed no change to service quality with outsourcing initiatives. The report also sheds light on how 96% of all cloud-based outsourcing relationships are rated positively today (Findstack). This means that the trust in outsourcing as well as logistic outsourcing to 3PLs has increased, and will increase even further in the future. 
• Gartner reports that at least 85% of logistics leaders expect to see an increase in outsourcing budgets. This is because according to 70% of those surveyed, logistics outsourcing improves end-to-end supply chain processes and helps companies meet their end goals. For 3PL, this means the cash flow for 3PLs is going to increase, considering that businesses are now willing to invest in outsourced logistics (Findstack).

3PL Growth Challenges Statistics to Help You Prepare Better

There’s no fun without a little challenge. Go through the following statistics and help them to prepare you for any problems that may hinder the growth of your 3PL activities. 

• According to Deloitte, 32% of companies believe they will outsource less after the pandemic (Findstack). Although Covid is still apart of the picture and pushes businesses to rethink their strategies, it is likely that the chaos will ease even more than it has in the coming years. Would this prove to be a challenge for 3PLs? Only time will tell. 
• Currently, the world is facing a global price hike for fuel – in June of 2022, the BBC reported that the UK had seen the biggest daily jump in 17 years for petrol prices. It is predicted that soon, filling a typical family car will exceed well over £100 (BBC). This situation is just as bad for many other companies in the world who are experiencing similar rises in fuel prices. While on one hand this means that businesses will be more willing to trust 3PLs with their delivery and transportation needs, it also means that the fulfilment process is likely to become more expensive for 3PLs. 
• According to a report by City & Guilds, the labour market crisis in the UK is set to worsen in future years – only 23% of people said they would consider working in the logistics sector, which is expected to have worker shortages of at least 400,000 people by 2026 (CIPS). Not only that, but the Labour Market Outlook Summer report states that the transport and storage sector, which involves 3PLs, is one of the worst affected fields when it comes to chronic staff shortages (Think Vertical). Given then, 3PLs may struggle with having sufficient workforce onboard, and employee retention should be one of top priorities when it comes to moving towards success. 
• 76% of clients will switch to a competitor on the basis of just one bad experience (Martech Alliance). Customer expectations are hard to satisfy in 2022, and this may prove to be a hurdle for 3PLs. 
• Customers expected connected journeys – at least 76% of customers will expect to see consistent, integrated interactions across multiple areas within a business (Martech Alliance). For 3PLs, this puts the focus on making experiences more integrated, and ensuring that there is proper connection between all the different departments within the 3PL. 
• 66% of customers want and expect companies to understand their unique needs. However, 66% also feel like they are not special to the company and are more or less treated like numbers (Martech Alliance). 3PLs will have to step up their personalisation game if they want their customers to feel valued, which can often prove to be a hard thing to achieve. 
• When asked if delivering an amazing customer experience provides a powerful competitive advantage, 78.5 CMOs in the UK, France, and Germany strongly agreed with the statement (Martech Alliance). This means that many businesses now understand the worth of customer experience and a huge majority of them are striving to be better at customer services, so 3PLs should watch out for their competitors!

Logistics and 3PL Growth Statistics to Make Moves that Matter

Just how lucrative is the logistics industry for 3PLs and anyone looking to establish a business in the 3PL world? These statistics paint out the whole picture for you. 

• The global logistics market is expected to reach USD 6.55 trillion by 2027, based on a CAGR of 4.7 during 2022 – 2027 (Businesswire). 3PLs that are looking to join the industry and even those who are already apart of it have a lot to look forward to, as the following years are predicted to give way to awesome growth and opportunities for logistics providers. 
• Participants in the 3PL market generate an economic value exceeding USD 961 billion (Statista). By being apart of the 3PL spectrum, you become an asset to the economy and will get the fruits accordingly, which is the perfect opportunity and can aid your growth as a 3PL to a great extent. 
• The size of the freight forwarding market worldwide is EUR 161 billion (Statista). Such figures prove that the logistics industry worldwide is vast and is only growing every year. 
• 3PLs are expected to reach US dollars 2114 billion from 2022 to 2032, with a projected CAGR of 7.6% (Fact.MR). Again, this is amazing growth and makes 2022 the perfect year for 3PLs to start making scalable changes that work towards long-lasting success. 
• Key players of the third party logistics market include. Kuehne + Nagel, BDP International, FedEx, DSV, DB Schenker Logistics, XPO Logistics, Inc., Yusen Logistics Co. Ltd., Burris Logistics, CEVA Logistics, United Parcel Service of America, Inc., C.H. Robinson Worldwide, Inc., Nippon Express, and J.B. Hunt Transport, Inc (Fact.MR). With these giants developing the 3PL industry and making it more advanced than ever before, it can be safely stated that the future seems bright. 
• Based on the service segment, transportation management is anticipated to have procured a 32% of the market share in 2022 (Fact.MR). This essentially means that 3PLs that incorporate transportation management in the third party logistics they offer are actually setting themselves up for success, and incorporating this aspect in your services can help you make just the right moves. 
• 42% of 3PL businesses are looking to improve demand forecasting in 2022. 40% are looking to improve capacity forecasting, whereas 38% are looking to improve international transportation logistics. 36% want to improve supply chain network design or redesign, and 33% expect to improve data analysis and visibility (Locus). Essentially, the 3PL industry is becoming increasingly advanced and hence, is turning more lucrative by the day. Any business that chooses to join this area in the upcoming years can expect to get the full support, resources, technology, and tools that will aid their growth properly. 

Remember:

These statistics are here to help you understand that the 3PL industry is a great place if you are looking to establish a business that grows consistently into the future. Dependence on 3PL logistics is increasing day by day – thanks to different reliability factors that have been introduced to the scene. 3PLs are the go-to choice for businesses that don’t want to take the headache of dealing with their logistics, and since all businesses get to at least once in their journey, it can be said that the concept of logistic outsourcing is here to stay for a long, long time. The landscape for 3PL growth and opportunities seems to be considerably ideal – all you have to do is play your cards right and get the right tools to help you, and you will be witnessing yourself become a 3PL maestro in no time whatsoever. 

The post Growth Opportunities for 3PL Companies – Top Stats for 2022 first appeared on canary7.

The supply chain industry is not what it used to be. Today, it is much easier for businesses to improve their processes – thanks to commendable technology, the supply chain world has progressed beyond what could even be perceived as possible a few years ago. 

Considering that supply chains are an integral component of the success of any business, it makes sense that they are increasingly being focused on when it comes to development. With the help of various technologies such as warehouse, inventory, and order management systems as well as labour management and warehouse control software, businesses can smoothen the logistics progress today to a very great extent. 

If you are looking to bring yourself up to speed with the latest technology stats, then have a look below: we have curated a massive list of supply chain technology stats that cover advancements in technology, logistics technology, and 3PL technology that you can refer to if you are looking to considerably increase your knowledge about your industry. 

General Supply Chain Statistics

The supply chain is often referred to as the life-blood of a company – and these statistics prove the truth in that statement.

• The global supply chain market size value is $15.85 billion (Zippia). This means that the supply chain industry is huge – there is a lot of investment that goes into this part of the commerce world, mainly because investing in your supply chain procedures means that you are investing in a successful future for your company.
• The global supply chain is predicted to have a CAGR of 11.2 percent from 2020 to 2027. Mainly, this means that it will be increasing from $15.85 billion to $37.41billion (Procurement Tactics). These numbers not only show that the supply chain industry is already monumental to the economy, but also that it will only grow in the coming years. 
• The size of the global logistics automation market was valued at USD 55 billion in 2021, and is predicted to exceed that mark by reaching USD 133 billion by 2030 (Acumen Research and Consulting). This means that there is a lot of potential in the logistics industry, especially when it is connected with automation. With automation, it becomes even more lucrative which is exactly why it has such a huge chunk of investment being put towards it.  
• 45.1 percent of members in the supply chain management industry are investing in warehouse management software and identify that automation within supply chain processes to be a key feature (Procurement Tactics). This is a good sign, because it shows that businesses are now recognising the importance of integrating the right technology in the way they run their supply chain, and it will help them with quite a lot of things including but not limited to cost cutting, 10 times speedier processes, and even more employee retention. 

Supply Chain Problems Statistics

There are some challenges that the supply chain industry still has to face; at least according to the following statistics.

• Only 6% of companies report full visibility on their supply chain, whereas a whopping 69% don’t have total visibility on their supply chain processes (Zippia). This shows that there is a gap that causes companies to not fully be in control of their supply chain processes. Lack of visibility and not investing in technology that improves visibility is a major setback because it can result in more delays, errors, and problems. 
• In the US, the Covid-19 pandemic led 38.8 percent of small businesses to experience supply chain delays (Zippia). Covid-19 has an impact on everything – including supply chain processes. The Covid upheaval has caused major delays, and as problems ease down, businesses are still trying to smoothen out their supply chain processes to ensure that they don;t have to face major problems with their supply chain management as a whole. 
• It is reported that only 22 percent of companies have a proactive supply chain network (Procurement Tactics). This means that almost 80 percent of businesses are not well-equipped to deal with sudden shifts and transitions in supply and demand. Considering that the market is not predictable at all, this could prove to be a major drawback for businesses, especially those that are planning to improve their customer service and expand their sales – which, more or less, is every business. 
• The percentage of small businesses that don’t track their inventory is 43 percent – out of these, 21 percent say they don’t have an inventory to begin with (Procurement Tactics). These statistics are quite shocking. Almost all businesses that deal with goods should have an inventory, and that inventory must be well-managed. The fact that almost 50% businesses don’t have any mechanisms to track their inventory shows that businesses are not well prepared to deal with the complications that are more than likely to occur during any supply chain process.
• Surprisingly, 63 percent of managers report that they primarily use Excel spreadsheets to manage their supply chain (Procurement Tactics). Although Excel is one of the most trusted ways to keep records of supply chain processes and manage warehouses, it’s just not enough for warehouse and fulfilment management in today’s time and age. This is because it is not efficient enough, and it is also prone to inaccuracies. Most importantly, it’s just tedious – who wants to scroll through boring spreadsheets? Replacing Excel with top-notch technology that is not only advanced enough to tackle all supply chain problems but is also easy and fun to use and integrate with in the warehouse is an absolute must. 
• 12 percent of retailers all over the world reported Covid-19 to have caused heavy disruptions to their supply chain processes (Procurement Tactics). This is true for many businesses – no matter what the industry is, almost all businesses and supply chain managers will agree that Covid-19 has caused disruptions in the supply chain.  
• Supply chains are vulnerable to a range of factors. 66 percent of supply chain disruption all over the world is mergers and acquisitions, whereas 41% are caused by extreme weather (Procurement Tactics). These aspects cannot always be controlled, which means that the only way to ensure they don’t result in a loss for your business in any way, shape or form is to connect the supply chain to the kind of technology that brings flexibility and adaptation to the supply chain.

Technology Advancement Statistics

Robots have not taken over the world yet – but they sure have been providing us with unparalleled convenience the past decade or so. The stats on technology advancements as listed below will blow your mind away. 

• It was in the last 2 years alone that 90 percent of the world’s data was generated (Leftronic). With the whole world shifting to online interactions for almost two whole years, this is no surprise. But for the purposes of logistics businesses, these statistics prove that there is an indubitable increase in people’s dependence on technology and the Internet. So, if they want to ensure that everything is sorted out, they will level up their technology game. 
• AI augmentation is likely to hit $2.9 trillion in business value (Gartner). AI augmentation is essentially a form of AI that focuses on an assistive role. The fact that in terms of assistance, AI is going to even improve further and provide even more convenience to people and businesses means that the top priority for everyone should be transition to the use of AI as soon as possible. Jumping on the bandwagon earlier means you will have more experience and the right skills to navigate these aspects. 
• By 2024, AI in retail is predicted to hit a stunning figure of USD 4.3 billion (P&S Intelligence). Retail is one of the most logistics-centred businesses and the main aspect that improves logistics is AI. This is part of the reason why AI in retail is all set to hit these figures by 2024. 
• Artificial intelligence will generate 2.3 million jobs in the US alone (Gartner). On one hand, it goes without saying that artificial intelligence will replace humans in at least some roles. However, on the other hand, it will also be producing more jobs for us to venture into. In fact, supply chain logistics is an area that cannot work well without the human element, which is why it is important to improve your labour force in tandem with the automated processes. It can easily be presumed that as time goes by and artificial intelligence becomes an even more integral part of supply chain processes, humans will be needed even more. 

Logistics Technology Statistics

The world of warehouse, inventory, and fulfilment will benefit the most from technology. Here, have a look: 

• 87% industry decision-makers hope to expand their warehouses by 2024 (Zebra). This is largely a good thing because this means that these industry decision makers feel like they are ready to take on the challenges that come with running a warehouse. However, in order for such ventures to be successful, it is necessary to integrate technology into warehouses and make the expansion process easier. This is especially true for 3PLs, since third-party logistics providers need technological support if they want to move forward. 
• The global warehouse automation market is predicted to go past USD 30 billion by 2026 (G2). The automation market is expanding, which means that the dependence on automation is also expanding. With these figures, it goes without saying that now is the right time to start rethinking your processes. Third-party logistics providers need to invest in automation tools like warehouse management systems and other software that streamlines fulfilment if they want to build a safer future for their business. 
• By 2025, it is estimated that about 4 million commercial warehouse robots will be installed in 50,000 warehouses (G2). This will make warehouse, inventory, and order management easier to take care of, and to a great extent. This also means that any logistics business that hasn’t already moved towards integrating technology in their processes should step up and do that now, otherwise they will be left behind struggling to keep up with their competitors. 
• A 25 percent to 30 percent reduction in average manufacturing and labour costs can be expected with the increased use of robots and artificial intelligence (G20). The best part is that this is not the only way automation and artificial intelligence will help businesses. It is also great because it helps businesses create a customer-centred experience with the help of reliable, trustworthy data and when it is the customer who decides whether your business succeeds or not, this is very important. 
• 54% of organisations report to have increased supply chain and technical training to retain more workers (G2). Labour shortage is one of the top concerns for logistics businesses, especially 3PLs who need more manpower to sort things out. Technology can help you improve employee retention and ensure that you can create a career path for your employees that they greatly value. 

Remember:

The fool-proof way of ensuring your success in the world of supply chain as a logistics provider is to invest in technology that can greatly simplify your job for you. Thanks to advancements in artificial intelligence, some tools available in the market such as Canary7 can really help you streamline the fulfilment process. 

Some 3PLs may hesitate from depending on technology – afraid that it is costly and hard to maintain. However, this is not the case. If you play your cards right, you can sort out the supply chain experiences and ensure that you are on the right track to success. 

The misconception is that technology is foe, and artificial intelligence exists to replace our jobs. Although the latter is more or less an inevitable reality, it must be acknowledged that if used the right way, the sole purpose of artificial intelligence and technology today is to help humans, including those in the logistics industry! 

So, now is the time to make technology your friend and in turn, make your life better by miles. 

The post Technology Advances Stats first appeared on canary7.

One such thing is the ongoing warehouse space shortage. Any business that is looking to make their break in the logistics world should be aware that there is a warehouse space shortage going on all over the world right now, which means that any space that you do get will be expensive. For 3PLs, this a double-edged sword – the rise in costs of storage motivates businesses to entrust them with the logistics of their operations but it also means that 3PLs have to be smart about the warehouse space they have and utilise it properly. In short, in order to succeed, your warehouse should be optimised from top to bottom so that you don’t fall victim to the shortage!

For more information, refer to the statistics below because they will give you a better idea about how the warehouse space shortage could play into the overall trajectory of 3PL businesses, including yours. 

General Warehouse Statistics

Warehouse statistics to warm you up for the real deal.

• Due to the boom in eCommerce, the number of warehouses all over the world is predicted to reach 180,000 by 2025 – maybe even more. This would be an increase of almost 30,000 warehouses from 2020, when it was recorded that there were 151,000 warehouses globally (Statista). This means that the demand for warehouse space is only going to increase in the future, as more and more businesses are added to the mix and have to invest in storage options. This is more than likely to boost up the prices of whatever warehouse space there is ultimately available. 
• The size of the global warehousing and storage industry will reach US$ 654920 million by 2028, from US$ 528320 million in 2021, at a CAGR of percent during 2022-2028 (Absolute Reports). This shows that there is a lot of money and investment involved in this industry, and the stakes are high. If you get your warehouse space sorted before the market reaches its projected peak, you will be setting yourself up for indubitable success.
• 181,130 sq ft is considered the average size of warehouses (G2). Every year, this number is increasing as more businesses aspire to expand their warehouses. This is because the larger a warehouse is, the better storage facilities you can expect from it. 

Warehouse Space Statistics

The warehouse space globally is going through a crisis of sorts. Here’s everything you need to know about it. 

• In Jan 2022, CBRE reported the previous year i.e. 2021 to have produced a record demand for mega industrial facilities. According to the report, the demand for industrial buildings such as warehouses in 2021 surpassed 2020 totals (CBRE). The leasing transactions associated with industrial facilities in 2021 totals to 105.3 million sq. feet – which was above 2020’s total, and is reportedly the highest amount noted by the CBRE in this areas since 2017. There is more competition when it comes to buying industrial space, and as we move forward into 2022, it becomes clearer that this competition is only going to increase. 
• Almost all industries in the US took part in some sort of industrial leasing in 2021. Out of these, the most transactions are done by the general retail and wholesale sector, closely followed by eCommerce only and food and beverage industries (CBRE). Yet, there was some transaction for almost all industries including third party logistics, automobile tires and parts, medical, manufacturing, and construction. This further shows the surge in the demand for industrial space. 
• The warehouse vacancy rate in the USA is below 4%, which is a record low in the country’s history (GlobalNewsWire). Vacancy rate refers to the percentage of all available units in a rental property such as a warehouse – and with the vacancy rate in a globally influential market like the USA being at such a low level, there is much for logistics providers to worry about. 4% means there really is not much space in the USA to ensure a seamless warehousing process. 
• The warehouse is not a USA problem – it is going on all over the world. The UK is also witnessing a supply of warehouse space, especially due to the sudden surge in logistics needs in 2021 (Independent). This has resulted in rents for logistic centres and warehouses rising by a 61% (Logistics Manager). 
• The demand for logistics and industrial space in England has been severely underestimated in the relevant areas of policy planning (British Property Federation and Savills). In fact, the future demand for logistics space is likely to be 29% higher than past levels. This is problematic since 3.8 million people are employed in the logistics sector – if there is not enough space to give way to the seamless operation of the fulfilment process, the sector and the people who work within it, including 3PLs, cannot thrive. It is also noteworthy that the logistics sector in England accounts for 14% of the economic output in England, and hence warehouse shortage should be addressed properly within the logistics space. 
• In some areas of the West Coast, storage rates have driven up from 10% to a whopping 50% (Ware2Go). This is only going to increase in upcoming months, making it more or less non-feasible for businesses to get their hands on a lot of storage space. This can have an adverse impact on the success of your business as it is more than likely to cause an overall increase in your costs. 
• Industrial real estate demand is expected to increase by 850 million square feet to 14.8 billion square feet as soon as next year i.e. 2023. (Deloitte). These monumental figures are a cause for concern and without proper intervention, it isn’t completely out of the question that businesses may have to suffer in terms of storage due to this shortage.
• The rise in business inventories has led to an exponential growth in the ratio of eCommerce retail sales (Deloitte). With real business inventories resting at about 12%, eCommerce sales to retails sales has reached about USD 11 billion. This proves that there is a connection between inventory management and storage and the growth of eCommerce businesses. This means that the rise in eCommerce sales is expected to drive warehouse demand, perhaps even beyond a point where warehouse space will be readily available for business. 

Third Party Logistics Statistics

For businesses that don’t want the headache of looking for warehouse space amidst a global shortage, third party logistics providers i.e. 3PLs are the best option: 

• The global third party logistics industry is projected to reach $1,789.94 billion by 2027, which would make it’s CAGR value of 7.1% from 2020 to 2027 (Allied Market Research). Given these numbers, it can be understood that more and more businesses are shifting towards 3PL logistics. This makes sense considering the warehouse space shortage and the subsequent rise in prices – businesses are finding it more reasonable to shift to 3PL instead of having their own warehouses. 
• Today, 90 percent of the 3PL market consists of Fortune 500s (PMS Newswire). This is a significant increase from the 46 percent Fortune 500s that worked with 3PLs in the past. Again, this proves that 3PLs are becoming the go-to choice for big companies, one of the reasons behind it being the warehouse shortage. 
• According to 54 percent of companies, there has been no change in service quality with their outsourcing initiatives (PA Consulting). This represents the fact that 3PL services are more likely to be preferred since there is no difference between the services they provide and the services businesses are used to. As a result, 3PLs will be trusted even more and warehouse storage space can be catered to accordingly. 
• 62 percent of companies will renegotiate their outsourcing contracts (BCG). On this basis, it can be observed that outsourced logistics are becoming the new norm, and will soon take over other forms of logistics services. 3PLs are just the right area to invest in right now, considering that they take a considerable chunk off of your shoulders and streamline the whole logistics process for you without you having to worry about factors such as the warehouse shortage. 
• 80% of the warehouse activities are outsourced (G2). As compared to the 20% that remains in-house, the warehouse activities that are outsourced become more efficient and are streamlined in a much better way. 

Warehouse Automation Statistics

Another thing that can help you get rid of the warehouse blues is warehouse automation. These statistics prove that warehouse automation is certainly something you should consider: 

72% of businesses believe that a warehouse management system is the popular warehouse management software as of 2020 (G2). This shows that warehouse management systems are an integral part of the logistics journey for many businesses. If you consider the level of optimisation they provide to businesses, it makes sense that they are such an important part of so many strategies. With the help of an efficient warehouse management system, you can optimise your storage space in the best possible way. 

The global warehouse automation market will surpass USD 30 billion by 2026 (G2). As more businesses develop in this direction, it can be assumed that existing warehouse space will be adequately optimised and we may even be able to see a decrease in the warehouse shortage based on this. 

77% of organisations claim they are serious about utilising automated warehouse systems to maximise data-driven performance and boost efficiency within these fulfilment centres (G2). If things keep going this way, most businesses will be able to counter the problem of warehouse shortage and not suffer from the various issues that may come with it.

Remember:

Warehouse space shortage is a serious problem that cannot be fixed until it is tackled from the root. Essentially, there needs to be some policy changes in industrial and warehouse real estate, so that warehouse space cannot be hoarded and that all businesses get the chance to comfortably sort out their fulfilment and storage needs. 

However, until the problem is fixed, businesses can work their way around it. One way is to hire 3PLs and get logistics services. This way, it is easier to save money and also to ensure that their logistics are being sorted out by the best of the best – people who actually experience in smoothing out the fulfilment procedure. 

Another thing that can help businesses is warehouse optimisation with the help of a warehouse management system. Warehouse management systems like Canary7 are designed by 3PL professionals and have the primary goal of streamlining fulfilment activity in a way that saves space, cuts down costs, streamlines order management; all while not compromising on the speed and efficiency of your operations. 

If you take these two hand in hand, you can avoid having to experience the warehouse shortage at least upfront, and can instead have a wonderful, error-free warehousing experience. 

The post Warehouse Space Shortage Stats first appeared on canary7.

There are multiple drivers behind the labour shortage in these markets. One of the most prominent ones is Covid-19. As of July 2022, there have been almost 6.37 million Covid related deaths globally (WHO). In addition to the deceased, there are millions of people who are still grappling with the long-term effects of the Covid-19 virus. These include health complications, but also other facts such as immigration disruptions and a change in worker expectations.  

Yet, it is important to remember that Covid-19 is only one of the many reasons that have caused labour shortages in most regions. These reasons contribute towards making growth for 3PLs and the logistics industry in general harder, considering that the logistics industry is one of the worst hit industries and is struggling with a serious shortage of warehouse workers. This shortage is more than likely to impede the efforts of businesses to try and achieve new heights of success. 

On this page, you will find the top labour shortage insights for 2022, and these can help you understand the current situation of the logistics market better, so that you can prepare yourself for even the most difficult of challenges. 

Reasons for Labour Shortage Stats

There are 4 main reasons behind the labour shortage: Covid-19, low wages, ageing population, and technology skills gap. There’s so much to learn about each of these, and the following insights will help. 

Covid-19 Labour Statistics

• Covid-19 has resulted in exactly 6.36 million deaths ever since its outbreak (WHO). Needless to say, this caused a shortage of workers in the labour market that can take up labour jobs. Due to Covid-19’s high death rate, there are currently more jobs than people and this causes friction in the logistics and supply chain industries. 
• The pandemic did not only impact the physical health of millions of people, but also the mental health of many. One half of the 400,000+ employees that stopped being a part of the workforce between February 2020 to November 2021 did so as a result of mental health issues (The UK’s National Office of Statistics). With so many people struggling with their mental health, there are less workers that are willing to take up the burden of logistics and supply chain jobs, considering that they can often be stressful and draining. 
• The gender gap in hours worked in the first quarter of 2022 was 0.7 percentage points greater than the pre-pandemic findings in 2019 (International Labour Organisation). The gender gap has increased, which may make women more hesitant to join the labour market. If women are given more opportunities to take up jobs in the labour market, the labour shortage would improve, but the post-pandemic landscape that increases the gender gap may not present a lucrative enough opportunity for women. 
• In the UK, the outbreak of Covid-19 paired with Brexit led immigration rates to fall by 90% in 2020 (Reuters). Considering that immigrants make at least 5% of the global labour force and that 1 in ever 20 workers worldwide is a migrant worker, (CNBC) the disruption caused to immigration rates as well and as the complications that migrant workers have had to deal with as a result of the pandemic has caused a drop in the amount of people in the workforce. 
• According to a recent study 95% workers are open to changing jobs, whereas 92% are willing to change industries (Monster) – a phenomenon that has largely been dubbed as the “Great Resignation”. Due to burnout as well as the need to accelerate their career growth and make up for time lost because of the pandemic, workers in the pre-pandemic worldwide are much more likely to leave their jobs and get new ones. Many of them demand flexibility and if they don’t get it, they will change their jobs and as found in research, even their industries. 
• Work from home was the norm that gained traction during the pandemic, and even though the worst of the Covid-19 virus seems to be over now, there are many people who actually prefer to work from home now. 77% (CoSo Cloud) of remote workers say they’re more productive when working from home, whereas 74% workers say that having the option to work remotely would make them less likely to leave a company (Owl Labs). With more people preferring to work from home, logistics jobs and being a part of the labour force which, for the most part, requires you to be on site seems to be much less preferred. 

Low Wage Labour Statistics

• Money is important to all workers. 62% workers rank wages as the biggest motivator for changing jobs (Randstad Employer Brand Research). This means that to the majority of people, the prospect of earning less money than they would in other jobs is not acceptable – so the fact that the labour market is associated with lower wages proves to be a major deterrent for potential workers. Especially in connection to inflation that has now become a global problem, low wages are the most important factor when it comes to labour shortages and the general hesitance of people to join the labour force. 
• More than 51.9 million workers that make up more than 31.9% of the US labour force make less than $15 per hour (Oxfam). With salaries that are not very attractive, the premise of being apart of the labour force becomes a lot less favourable for potential employees and they are likely to gravitate towards alternatives that enable them to earn more money.
• In the UK, around 7% of all workers which means almost 2 million workers are paid at or below the minimum wage as of April 2020 (House of Commons Library). Although this is an improvement from 2015, 7% is still a considerable number which is affected by earning minimum wage, and even below that and hence could be considered as a contributing factor in the recent increase in labour shortages. 
• Inflation rates have doubled in 37 of 44 advanced economies over the past two years (Pew Research Centre). Although most economies depend on the labour force for many jobs, the state of their economies don’t allow them to increase minimum wages or offer employee benefits that urge the labour force to continue being apart of the industry. For example, US and UK inflation rates have almost quadrupled over the past two years (Pew Research Centre) whereas the inflation rates of countries like Greece and Italy has increased anywhere between 15 to 20 times. 
• In 2020, 885,000 workers had a wage that fell below the federal minimum. In 2021, about 44.3% of wage and salary workers were paid hourly or below the federal minimum (Statista). That is almost half of the workforce. In today’s economy, surviving on minimum wage let alone below minimum wage wouldn’t be the ideal choice for anyone. That’s why there has been a general hesitance by workers to join the labour market and make a contribution. There are efforts in place to improve this situation, but nothing extensive enough is being done to ensure that the job market is actually lucrative for more people to gravitate towards it. 

Ageing Population Statistics 

• In the United States, over about 10,000 people reach the retirement threshold by turning 65 years old (AARP). This means that a considerable chunk of the population belongs to the retirement segment, and hence cannot be apart of the labour force – which further contributes to the ongoing labour shortage crisis. 
• Today, almost 1 in 10 people are over 60 years old all over the world (HelpAge). Not only that, 1 in 5 people will be over 60 by 2050 and it is even predicted that people aged over 60 will outnumber children aged 0-14 by 2050 (HelpAge), which means the proportion of older people in the population is only going to increase over the next few decades. Essentially, what we have is an ageing population, which comes about when there is an increase in the proportion of older people. An ageing population comes with increased costs for the economy, and when paired with slow labour force growth, it can have an adverse impact on the state of it. This is why these statistics are concerning, especially when considered in conjunction with efforts to improve the availability of the labour force. 
• Asia, the biggest and most populated continent in the world and Europe, which is the third most populated continent in the world are the homes of the world’s oldest populations – meaning that a large proportion of their populations consist of those aged 65 and above. Japan tops the list, with 28.2% of its total population being over 65. Italy is close behind in this regard, with a total percentage of 23% old people. Finland, Portugal, and Greece also make it to the top five, with a percentage that falls just below 22% (PRB).
• The labour force participation rate for people aged 16 to 24 is projected to decline about 4.3% in the period between 2020 – 2030 in the US. On the other hand, the labour force participation rate for people aged 75 and older is projected to increase by about 2.8 percent during the same period (US Bureau of Labour Statistics). This means that the labour force is likely to be more accommodating towards older people, considering that younger people are likely to move even further away from working in the labour force in upcoming years. 

Technology Skills Gap Statistics

• 87% of employers all over the world are reported to have admitted that they are struggling with a skills gap issue (McKinsey & Company). More and more businesses are integrating advanced technology in their operations such as warehouse management and order management systems. Although this technology helps to a great extent, not all AI and automation can be used to the best of its potential by the labour force, considering some of these tools are too complicated to work with. The skills gap, therefore, creates a rift between the technology that is important to bring efficiency to work processes and the workers that are important to ensure that the technology is making an improvement to existing processes. 
• It is predicted that by 2030, the skills gap paired with talent shortage will cause a loss of $8.5 trillion for the USA’s economy (PwC). Ultimately, the labour shortage is not just that – it is also a skills shortage. Not only do companies need workers, they need workers that have the right skills needed to navigate the challenges associated with being a part of the workforce: whether it is digital knowledge or technological skills. 
• According to 56% of hiring managers, technological interventions like AI and other forms of automation will cause a change in the kind of skills they need workers to have (Salesforce). Again, this means that they need people who are trained and have experience with particular technological interventions, which is not easy to find and hence, may contribute towards labour shortage in general. It also means that the needs of companies that require labour force is constantly evolving, making it considerably hard for people to make the cut going forward. This is further reflected by looking at the 46% of people who admitted to being anxious about the widening skills gap (Degreed). This shows that workers themselves are doubtful of whether they can meet the rising expectations of employers, which may lead to a resistance towards taking up jobs that put them outside their comfort zones. 
• Only 34% of workers feel like they are adequately supported by their company’s skill development opportunities (McKinsey and Company). This means that there is not much trust in companies when it comes to skill growth and expansion, which leads workers to believe they will not be able to do the job properly. It is only when employees see professional growth in the labour force that they want to put in the effort and take on the responsibilities of working as an active part of it. 
• 46% of companies have no strategic plan to address the skills gap internally (ICIMS). Essentially, this means that there is not enough effort from the end of these companies to improve the work done by members of the labour force and hence they offer them no major opportunities to grow and expand their skill set. If we want to ensure this aspect does not affect the labour market in the long term, companies must step up their game and start providing people with the training they consider to be useful. This can be done through talent management systems, and will prove to be beneficial to the company’s 

Labour Shortage Warehouse Workers

The warehousing industry has to constantly struggle with labour shortage for various reasons. Here’s what we mean: 

• 73% of warehouse operators can’t find enough labour (Instawork). This means that well over half of the warehouse world has to bear the brunt of the ongoing labour shortage. 75% of light industrial businesses don’t feel fully prepared for 2022, whereas 60% have been unable to keep pace with the dramatic rise in demands starting from 2021. All of this means that there is a need for them to have more workers available to help them, but with the labour shortage going on, it seems impossible to do so.
• 58% of warehouse and distribution businesses have witnessed an increase in fulfilment volume in 2021 and onto 2020 (Instawork). This means there are more orders that these businesses have to deal with, but less workforce. Paired with the fact that many of these warehousing businesses don’t have the right technology such as warehouse and order management software means that they are simply not well-equipped enough to tackle the problems they face, especially in light of the labour shortage.
• In the USA alone, warehouse jobs rose by 13,4000 positions to a total of 1,728,200, which is a large number and definitely a cause of concern for many warehouse operators (Bureau of Labour Statistics). This is mainly because although businesses are aware of the ongoing labour shortage, they fail to address many problems faced by members of warehouse workforce, which is definitely not ideal if you want to make sure that you have enough workers available to help you complete your fulfilment processes. 
• In 2021, the British warehouse worker shortage led to warehouses having to pay up to 30% more to recruit staff (Reuters). This means that companies that don’t focus on employee retention and have a strategic employee management tactics in place may end up incurring monetary loss by trying to bridge the gap with new employees or even keep hold ones. 

Labour Shortage UK Stats

After the pandemic, the UK has been on an uphill battle to try and help the labour market recover – an effort that has proven to be successful in some areas, but is still a cause of concern in others. These stats will help you understand what we’re talking about.

• Employment rate in the UK, although improving, is still at least -1.0pps or 122,000 people below pre-pandemic rates. From March – May 2022, the employment rate was up from 75% to 75.9%, which means that there has been improvement (House of Commons Library). However, the fact that the employment rate is still less than it was before the pandemic shows that the UK is still struggling to return to the “normal” state of affairs when it comes to the labour market. The fact that the employment rate is less than it was before the pandemic can also be linked to the fact that there are not enough workers available who want to join the labour force, mainly due to the reasons listed above. 
• There has been an increase in economically inactive people in the UK as well. In the second quarter of the year 2022, it was found that about 8.75 million people aged 16-64 were economically inactive and the inactivity rate was 21.1. These levels are 302,000 above their pre-pandemic level (House of Commons Librar). Again, this means that the adverse impact Covid-19 had on the market has still not reversed and continues to contribute towards economic activity in people of the working-age. Whether it is because of health issues or burnouts, economic inactivity in one very prominent driver of the labour shortage. 
• On the other hand, the amount of vacancies has now considerably increased over and above the pre-pandemic levels. From April-June 2022, the increase of vacancies reached 1.29 million, which was 498,000 more than pre-pandemic levels (House of Commons Library). So, while employment rate is struggling and economic inactivity is concerningly high in the UK, the need for workers to join the labour force is increasing beyond pre-pandemic levels. UK companies need labour that can be retained, and they are struggling with that. 
• In the UK, average wages fell in the three month to May 2022. The annual change is that of -3.7% excluding bonuses and -2.0% including bonuses (House of Commons Library). This shows that people are being paid less than they were at the start of the year. Wages are an important part of the job experience for all members of the labour force, which is why salaries that are not fulfilling are the biggest hindrance between people and labour jobs. 

Labour Shortage USA Stats

The USA is struggling with one of the worst labour shortages in its history. These facts and figures will give you a better understanding of what’s going on. 

• The pandemic proved to be a great hit for the American labour market. In 2022, more than 47 million workers quit their jobs. This situation in America is essentially what gave rise to the term “The Great Resignation,” and has proven to be a great impediment to its labour market health. 
• Currently in the US, there are over 11 million job openings but only 6 million unemployed workers. This huge gap between supply and demand shows just how bad the situation is. Like the UK, the USA also has more jobs than it has workers, and if things don’t improve soon, the labour market will have to struggle even more to make it in the economy (The US Chamber). 
• Comparing trends between 2020 and 2022, it can be observed that the labour force participation rate in the later months of 2022’s first quarter sat at about 62.2%, which presents a decrease from the 63.3% in January 2020. The reasons behind this are varied. 33% women believe that they can no longer be an active part of the labour market because they have to stay at home and look after family members, whereas 28% men think that their industry is still suffering which is why no good jobs are available to get into (The US Chamber). Whatever the reason is, the decline in labour force participation is apparent – despite the number of jobs available out there, the amount of people who can realistically fill those vacancies is at a low. 
• For America, one huge factor that contributes to the labour shortage is an increase in savings. Because of lockdowns, unemployment benefits, and stimulus checks, Americans were able to collectively add USD 4 million to their savings accounts in 2020. This means that about 68% claimants were able to earn more on unemployment than they were at their jobs (The US Chamber). With unemployment working out for them and adding to their bank account, it makes sense that the labour force participation for many Americans has witnessed a decrease and is struggling with a labour shortage. 

The Future of Labour Shortage

What does the future hold when it comes to labour shortage? Let’s have a look. 

• 85 million jobs could go unfilled due to the skills gap without intervention. Such statistics make it obvious that the issue is very concerning (Korn Ferry). There are simply not enough humans to take the amount of jobs there are all over the world. This has ceased to become simply a commercial issue – if not paid due attention to, labour shortage can quickly turn into a huge problem for countries on a national scale. This is why governments and organisations that help governments are urged to become apart of the discourse; so that enough people can be educated on the cons of a labour shortage and steps can be taken to fix it on a larger scale. 
• The global unemployment rate in 2020 was 6.57 percent. Although this has improved now and dropped down to 5% in 2022, it is still higher than previous years and hence, concerning (OECD). In countries like the US and UK as well as some other countries in Europe and Asia, this doesn’t mean that there aren’t enough jobs available – in fact, contrarily and as discussed in different stats above, this means that the jobs that exist don’t attract people enough to actually result in employment, which is ultimately what makes the difference. 
• Yet, not all hope is lost when it comes to talent and labour shortage. Many countries are making the effort to attract more workers into the labour force. This is reflected in minimum wages around the world. For example, in the UK, the National Living Wage that was introduced in the UK for workers aged 25 and over was extended to those aged 23 and over instead. This means that more people can benefit from the national wage, and hence acts as an incentive to bring more people into the labour force. In addition, there has also been an increase in the amount of the wages. Before the pandemic, the national wage was £8.21. During the pandemic, it was raised to £8.72 and after the pandemic in 2021, it was bumped up to £8.91 (NiBusinesInfo). It’s better than before – but maybe still now as attractive to boost up economic activity for many individuals. 
• According to the education platform Coursera, digital skills are the language of the modern economy (Coursera). 21.7 million Coursera learners are focusing on digital skills in North America, with 19 million of them being located in the USA. In the United Kingdom, there are 2.6 million Coursera learners who focus on digital skills and technology-based education. This effort could translate into a very successful approach to fix the labour shortage. With more and more people being at par with industry standards and knowing to operate technology that is integrated within their particular industries, the skills gap could be greatly minimised and may even result in fixing the labour shortage for a long period of time. 

Remember:

The labour shortage all over the world is a real issue that can cause economies to collapse if not paid attention to. There are more jobs than there are people in most parts of the world, and this is enough chaos for all actors of the economy. Therefore, businesses, especially those that require the human element more than anything such as 3PLs and other companies that have to work with logistics, it is important to invest in resources, methods, and technology that not only simplifies processes but also helps them retain warehouse workers. 

All of the factors discussed in the statistics give rise to the labour shortage, which extends especially to warehouse workers. Yet, warehouse workers are important when it comes to running any logistic services, and hence you must do the most in terms of ensuring that you can hire the right people and keep them on board. 

If you want to ensure that the job experience you offer keeps your warehouse workers happy and prevents you from becoming a victim of the labour shortage, it is important to make sure that you are taking care of them. Being concerned about their mental and physical health is an absolute must, and you should also make sure that you are doing everything in your power to make their jobs easier for them.

With the help of tools such as warehouse management systems and labour management software, the task of hiring individuals and keeping them in their jobs for a long period of time may prove to be beneficial, considering that these tools are especially designed to take the burden off of your employees’ shoulders. 

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