Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
Once regarded as a souless back-office function, supply chain management has emerged as one of the hottest fields in American busi- ness. Thought leaders and industry gurus point to the supply chain as a pow- erful competitive differentiator, while corporate titans like Wal-Mart, Dell, and Toyota brandish their supply chain capabilities like swords. Given the climate of the times, it's no wonder the executive suite has finally woken up to the value of the supply chain.
For evidence of the profession's growing stature, you need look no farther than DC VELOCITY's 2007 Salary Survey. The median salary for the 876 survey respon- dents was $90,000, with the mode (or most frequent response) being $100,000.
The mean or average salary came in even higher at $140,533. This number, however, may be skewed by the 11 people who reported earning over $1 million. All of these millionaires were senior vice presidents, corporate officers, or presidents at companies with more than 5,000 employees.
Given DC VELOCITY's diverse readership, it's no surprise the responses ran the gamut, ranging from over $4 million to $23,000. But there were plenty of responses that fell between these two extremes—a little more than half of all respondents earn between $75,000 and $149,000.
Logistics and supply chain professionals' salaries appear to be on a par with those of their peers in other parts of the organization. Purchasing professionals, for example, earn $78,470 a year, according to a recent survey by the Institute for Supply Management (a similar survey conducted by Purchasing magazine put the number at $83,205). IT professionals and accountants earn salaries in that range as well. Janco Associates Inc.'s 2007 IT Salary Survey reports a median salary of $78,652 for IT professionals. The Institute of Management Accountants' 2005 salary survey put its members' median salary at $91,823.
DC VELOCITY readers also indicated that their salaries have, for the most part, increased from last year, although not significantly. According to the results, 78 percent of survey respondents saw their salary increase. (Another 17 percent say their salary remained the same, and 5 percent say it decreased.) Of that 78 percent, however, 66 percent say that their salary increased by 5 percent or less.
Other signs of respect
Salary size is not the only indicator of logistics and supply chain management's growing stature. Some 69 percent of respondents say that over the past three years, the number of functions that they manage has increased, while only 5 percent say it has decreased. The remaining 26 percent say there has been no change.
Furthermore, 54 percent report that they have direct or indirect management control or influence over the typically broad and strategic area of supply chain management. With this broad reach comes more money. The survey results show that those who have control or influence over supply chain management earned more than those who did not. Those in supply chain management had a median salary of $100,000 and an average salary of $183,026. Those not involved in supply chain management had a median salary of $80,000 and an average salary of $90,197.
That's not to say that DC VELOCITY readers have abandoned their traditional distribution focus; 61 percent of readers have influence or control over logistics management, and 69 percent have influence or control over warehouse/distribution center management.
Of course, what they're called has a lot to do with what respondents earn as well. Exhibit 1 shows median and average salaries salary by number of years at companyby title. As the table illustrates, when it comes to median salaries, the average senior vice president earns more than 2.5 times the salary of the average supervisor.
Does experience count?
The fast-changing nature of supply chain management—and the information technology that supports it—would seem to favor younger managers. The survey results, however, indicate that the picture is slightly more complex.
If you look at median salary by age (see Exhibit 2), the results indicate that after 45, the median salary increases only gradually with age. (There does seem to be a leap in salary after the age of 60, but the sample size for this group is small, with only 38 respondents.) Even this slight age advantage disappears if you adjust for title. Exhibit 2 also shows the median salary for managers (who represent the largest group of respondents). As the table shows, there's little correlation between the age of a manager and median pay. Likewise companies seem to value an employee's experience in a logistics-related job only up to a point. After 15 years of experience in logistics-related jobs, median salaries rise only slightly for all respondents and actually drop for those whose title is manager (see Exhibit 3).
However, if you look at average salary, it's a different story. Across all titles, average salary grows significantly as the age of the respondents goes up. The significant difference between median and average salaries after the age of 56 indicates that there may be a few people in these age groups in high-level positions who are earning very large salaries. In fact, nine of the top 10 earners are over the age of 56 and all are over the age of 45. This discrepancy is not seen with managers. Just as with the median salaries, average salary drops after age 45, until respondents reach the age of 60, when the average rises to $93,182. (The sample size for this age category, however, is only 11 respondents.)
Average salaries for all respondents also continue to grow substantially as the employee's number of years in logistics increases. Again of the top 10 earners, all had more than 15 years of experience. Salaries for managers also rose steadily until they reached around 20 years of experience. Then the rate of increase levels out, rising only 1.2 percent from the average for those with 16-20 years of experience to the average for those with more than 25 years of experience.
In short, title is much more important than experience when it comes to salary. However, a high percentage of those perched on the top rungs of the corporate ladder are in their 50s and early 60s and have over 15 years of experience in logistics. This result implies that experience is a factor in who gets promoted or hired to those highly compensated upper management positions.
What about number of years at the current company? The survey results showed no clear connection between loyalty to the company and salary. Across all titles, average salary rises steadily as the years of service at the company increase—or at least up to 25 years (see Exhibit 4). Median salary, however, shows no predictable pattern, with salaries rising for the first 15 years of service, holding steady from years 16-20, then jumping up at year 21, only to fall back down again after 25 years of service. Similarly, there seems to be no clear correlation between number of years of service at the current company and the average or median salaries for managers.
What accounts for higher pay?
We also took a look at some other key factors with the potential to affect pay—education level, location, size of the company, and gender—to see how they correlated with salary. The clearest results are for education level. As the level of education increases, so do the average and median levels of pay (see Exhibit 5). Interestingly, even those readers whose education ended with a high school diploma (26 percent of all survey respondents) are still earning high salaries, with a median salary of $72,000 and an average salary of $86,597.
Working in New England can also bump up the pay you receive. Based on both median and average salary, DC VELOCITY readers in New England earn more, on average, than their peers in other regions of the continental United States (see Exhibit 6). This proves true even if you hold the position constant, as is seen by looking at the median or average salaries for managers. In most other regions of the continental United States—the West, Middle Atlantic, South, and Midwest— salaries remained pretty much consistent, although average salaries in the Southeast lagged slightly behind the rest.
Size of company can also have an impact on pay. Average and median salaries generally tended to rise by number of total employees both for all respondents and for managers (Exhibit 7). The one exception is companies with 501-1,000 employees, where median salaries for managers dipped.
A look at the results broken down by gender yielded some interesting findings (see Exhibit 8). Women make up roughly 10 percent of all survey respondents; yet they earned five of the top 10 salaries reported in the survey. As a result, when you look at average salary, women seem to be earning significantly more than men— $303,695 vs. $112,691. Median salary, however, tends to be less susceptible to outliers. These figures show women earning significantly less than men—$70,000 vs. $91,500. In fact, if you look only at the manager level, it's clear that the average female manager doesn't earn as much as her male counterpart. Female managers earn a median salary of $60,000 and an average salary of $65,774, while male managers earn a median salary of $75,104 and an average salary of $80,225.
No matter what your gender, education level, location, or level of experience, one thing remains consistent: Logistics is a lucrative field. And as recognition of the strategic role of logistics and the supply chain grows, compensation is likely to follow suit.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.