Looking for warehouse workers you can rely on? Older folks can be highly reliable and productive, provided you give them the support and benefits they need.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
If you have anything to do with staffing warehouses and distribution centers, then you've probably given some thought to the subject of demographics lately.
Demographics? That statistics-heavy stuff you read about in social studies? Yes, indeed—and let's hope you paid attention in class that day. That's because any long-term strategy for staffing warehouses and DCs has to consider the changing demographic profile of the American workforce—or else risk being caught shorthanded.
Most likely, what you've heard on the topic has focused on today's multilingual workforce. That's something virtually all warehouses and DCs are dealing with, whether they're located in urban or rural locales. (See "¿habla warehousing?" DC VELOCITY, September 2007.)
Important as that is, it's not the only demographic issue you need to be aware of: Age should also be on your radar screen. The U.S. population is getting older; people are living longer and working longer. According to "65+ in the United States: 2005," a National Institute on Aging report compiled by the U.S. Census Bureau, the number of senior citizens in this country is expected to double by 2030, when nearly one in five Americans will be 65 or older.
Right now, that trend may not be apparent in many warehouses (youthful immigrant workers still dominate the average DC's workforce). Yet it's a big enough worry that the Council of Supply Chain Management Professionals (CSCMP) annual conference in 2007 included two sessions on "disruptive demographics," including lengthy discussions of the impact of an aging population on supply chains. At last year's Material Handling Logistics Summit, moreover, a group of business executives, material handling equipment vendors, and academics identified the impact of demographics on distribution and logistics as their top concern.
The graying of America is a trend that will affect most, if not all, warehouses and DCs. The downside, of course, is the inevitable loss of knowledge and experience when large numbers of baby boomers retire. But there is an upside, especially if you're willing to think of an aging population as an opportunity instead of a problem: Employing "over 50" workers can actually boost warehouse productivity.
16 steps to a safer workplace
The American Society of Safety Engineers (www.asse.org) suggests the following steps to make industrial workplaces safer for older employees. Though the list was created with older workers in mind, the group says the changes will benefit workers of all ages.
Improve illumination and add color contrast.
Eliminate heavy lifts, elevated work from ladders and long reaches.
Design work floors and platforms with smooth and solid decking while still allowing some cushioning.
Reduce static standing time.
Remove clutter from control panels and computer screens, and use large video displays.
Reduce noise levels.
Install chain actuators for valve hand wheels, damper levers, or other similar control devices. This brings the control manipulation to ground level, which helps to reduce falls.
Install skid-resistant material for flooring and especially for stair treads.
Install shallow-angle stairways in place of ladders when space permits and where any daily, elevated access is needed to complete a task.
Increase task rotation, which will reduce the strain of repetitive motion.
Lower sound-system pitches, such as on alarm systems, as they tend to be easier to hear.
Lengthen time requirements between steps in a task.
Increase the time allowed for making decisions.
Consider necessary reaction time when assigning older workers to tasks.
Provide opportunities for practice and time to develop task familiarity.
Older achievers
That older workers should be more productive than the young 'uns may sound counterintuitive. After all, everyone knows that as people age, they think and move more slowly, and their eyesight, hearing, and muscle strength decline. That's true, but medical researchers, gerontologists, and safety engineers all agree that it's no reason to write off the over-50 crowd in a warehouse setting. In fact, research cited by the American Society of Safety Engineers and federal health agencies shows that workers 55 and older have fewer accidents on the job than do younger people. (When they are injured, though, they often take longer to recover.)
As for why older workers outperform their younger counterparts, there are a number of possible explanations, says Brian R. Sherman, director of ergonomic services for The Ergonomics Center of North Carolina at North Carolina State University. "They have more experience, and they may have moved up in their jobs so that now they're managers, or they may be leveraging support within their group," he suggests.
Another factor in their favor: Mature workers tend to subscribe to the "work smarter, not harder" philosophy. Forty-five percent of productivity increases in warehouses and DCs comes from more effective use of time, says Jeff Boudreau, a partner at workforce productivity specialists XCD Performance Consulting. In his experience, older employees excel in this area. "They are less easily distracted, and they know how to stay on task," he says. "The more senior warehouse associates usually are at the top of the list in terms of productivity, quality, and consistency. I've never found somebody who's not been able to achieve performance incentives due to age."
That's significant, because performance standards are not adjusted for specific groups of employees, says Evan Danner, president of TZA Consulting, which develops engineered performance standards and labor management systems. "You set specific standards for different functions … but in a world of engineered standards, you cannot set different standards based on age," he explains.
What about positions that require working with technology, such as highly automated material handling equipment? Boudreau says that seniors may not always be as tech-savvy as their younger co-workers, but he strongly disputes the notion that they can't be successful in technology-related jobs. "We've tracked all different types of [warehouse] workers on training curves. Even when we have set up moving goals, we have always found that older workers progress up the training curve the same as anyone else," he says.
Sherman agrees that older folks can make the grade when it comes to mastering tasks. "A number of studies on worker performance, including research papers that compare job performance and age, generally have found no correlation—either positive or negative—between the two relative to technical competence," he says.
Hiring mature workers can be an antidote to one of warehousing's most intractable problems: employee turnover. Danner has found that older workers tend to stay in their jobs longer, particularly in a unionized environment with good pay and benefits. They usually care more about benefits than 20- somethings and are more rooted in their communities. As a result, they're less likely to change jobs when something new comes along—like the oil companies that Boudreau says are "literally poaching people in the parking lot" of a West Texas warehouse operated by one of his clients.
Not ready to hang it up
The advantages of hiring mature workers seem clear enough. But do they actually want to work? Apparently, they do. A 2004 survey of 2,300 baby boomers conducted by Merrill Lynch, pollsters Harris Interactive, and the consulting firm Age Wave found that 76 percent of the respondents planned to continue working after retirement. In an earlier study of 1,000 people aged 55 and older, conducted by Age Wave on behalf of insurance giant AIG SunAmerica, about 95 percent of respondents said they expected to work at least part time after they retire, either by choice or by necessity.
Add those findings to current worries about the future of Social Security and the state of the U.S. economy, and you can't help but expect more mature workers to be knocking on your door looking for work. That could well happen, but they won't all be looking for a 40-hour week: Only 6 percent of the respondents to the Merrill Lynch study said they would want full-time work.
Flexible scheduling and good benefits are the biggest lures for mature workers. Adjusting work flows and scheduling to accommodate part-time workers takes some effort, of course, but the benefits often make up for it. Boudreau tells of one retailer who went to high school PTA meetings to recruit middle-aged and older mothers to work in a DC during school hours; the company also gave the part-timers a discount on merchandise and made the work environment as pleasant as possible. That strategy netted the retailer a number of reliable long-term employees, he says.
Another example is that of a company that moved its DC from northern New Jersey to a rural community in the southern part of the state because of the availability of large tracts of land. It soon found that the labor pool in its new location was too small to fully staff the DC with fulltime workers. Instead, Boudreau says, the company found the reliable—mostly part-time—workers it needed among the retirees in the "55-plus" communities that were springing up in the area.
Safe and sound
Although mature workers easily match (or outpace) their younger counterparts when it comes to productivity, there's no denying that their reactions may be a little slower, their eyesight may be a little fuzzier, and they may tire a little sooner than their younger colleagues. There are some basic steps you can take to help older workers consistently perform at high levels in the safest possible environment. For a quick rundown, see the sidebar titled "16 steps to a safer workplace." Here are a few additional recommendations:
Consider each person individually, and screen carefully (in accordance with labor laws, of course). Be alert for potential problems, such as a decline in memory or eyesight, but don't assume that everyone over a certain age is unfit. "It's kind of like an upside-down funnel," explains Sherman of The Ergonomics Center. "Young children's strength capabilities don't vary much, but as we get older, capability can differ greatly among people in their 50s and 60s." Boudreau, too, cautions against stereotyping: At one client's DC, a woman in her 70s is among the most productive trailer loaders.
Pay special attention to ergonomics. Workers of different ages may be prone to certain types of injuries; read up on the research and take steps to prevent those injuries from occurring. Of particular concern: hazards that could cause a loss of balance, trips, and falls.
Take the "vision test." Look around your operation. Does it present any obstacles for someone whose vision is no longer 20/20? Better lighting and clearly readable signage improve visibility, as do uncluttered screens and larger characters on terminals and scanners.
Match employees with the right jobs. Since engineered performance standards can't be adjusted for individuals, the smart route is to place people where they're most likely to be successful, says Danner. "If a worker is over 60, I would question whether you want to put him in a pick module where he has to handle 400 cases an hour," he says. "But he could probably be very successful in a piece-pick area where weight is not a big factor and there is more emphasis on dexterity and skill."
Offer health and wellness programs for mature workers. Making those programs available is an effective way to help them stay in the workforce longer, agree all of the experts consulted for this article. Health is a major concern for even the halest and heartiest of this generation; by supporting older employees' health needs, you'll not only keep them working longer but will earn their loyalty, too.
Respect for all
Health and safety considerations aside, there are a few other factors that come into play in managing an older workforce. For instance, it's important to keep in mind that boomers and their elders have a very different way of looking at work, authority, and personal development than do the current crop of young professionals. In some DCs, there now are four generations working together— and that creates some managerial challenges.
Danner notes, for example, that friction sometimes occurs between young people with degrees in logistics or supply chain management and the older, more experienced workers they may supervise.
Yet for all their differences, workers from the various generations have this in common: they want respect. Regardless of their age or experience, they want to be treated as individuals with valuable ideas and knowledge that can be tapped for the benefit of all.
That's not something older workers can always take for granted. In some companies, there's still a tacit assumption that older folks are inflexible, uncreative, and generally less capable than younger co-workers. Therein lies an opportunity to make your DC stand out from the crowd. Give older workers what they want and need—including respect—and you could gain some of the most reliable, self-directed, and productive employees you've ever had.
CVS puts demographics to work
To see what the DC workforce of the future might look like, just go to one of the DCs run by CVS Caremark, the Woonsocket, R.I.-based drugstore chain. In 2007, 10 percent of new hires in the company's distribution centers were over 50 years old. Currently, 25 percent of the DC workforce is over 50, and in 10 years that figure is expected to top 33 percent, says Kevin F. Smith, the company's senior vice president-supply chain and logistics.
Though that wasn't planned, Smith says he's not alarmed by the trend. He believes that having older workers on the job is an asset. "Older workers are more experienced and knowledgeable, and this helps in creating a safe and productive workplace," he says.
Over the past eight or 10 years, CVS has been automating more of its operations and making ergonomic enhancements to its DCs. Smith says the retailer made that decision to improve processes, boost productivity, and lessen the likelihood of repetitive stress-related injuries in the workforce in general, but those measures have proved to be especially helpful to older workers.
The combination of efficiency and more mature workers has produced a steady increase in productivity and improvements in customer service. Smith believes that CVS's distribution centers are safer and more productive than ever. That's a tribute to all of the company's associates, both young and old, he says. But older employees have played a big role in that success. "We believe that our current mature workers add to that productivity, rather than detract from it, because of their experience, knowledge, and expertise," Smith observes. "These are associates who know our business and continually help us to fine-tune processes that help us to serve our customers better. These individuals understand the processes they work with better than anybody else and therefore are more apt to recognize ways to improve those processes."
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."