If the results of our annual salary survey are any indication, the economy is indeed bouncing back—and bringing logistics professionals' compensation along with it.
We may be in a "jobless recovery" and the 2013 holiday shopping season may have been a disappointing one for many retailers, but with the housing market gaining traction, industrial production on the upswing, and the U.S. economy improving in many other respects, it's not surprising that U.S. consumer confidence is up—way up. In fact, the monthly average for the Reuters/University of Michigan Consumer Sentiment Index for 2013 was the highest since 2007.
Readers of DC Velocity have their own reason to feel upbeat about their economic circumstances: In 2013, the average compensation for respondents to our annual salary survey was $119,538—up 10 percent over last year's average. The median, or the midpoint of all salaries reported, was $102,000, up from $90,000 the previous year. While the mix of respondents who participate in the survey in any particular year will have a big impact on the average numbers, there's no question that the majority of survey takers are better off than they were a year ago. Well over two-thirds (69 percent) of the 443 qualified respondents said their annual compensation increased last year. In terms of size, those raises remained flat, though—a little above 6 percent on average, slightly higher than the previous year. Meanwhile, about one-fourth (26 percent) said their salaries had stayed the same. And just 5 percent said they were making less money in 2013 than they did the year before, the smallest percentage since before the Great Recession.
All of those numbers are an improvement over the previous survey's responses. Last year, 62 percent of respondents said they had received raises in 2012, 31 percent said their salaries had stayed the same, and 7 percent took pay cuts. That continues a pattern we've seen since 2010: more respondents reporting raises, and fewer and fewer reporting stagnant or declining salaries. The steady drop in respondents who suffered pay cuts suggests that fewer readers are out of work or are being forced to take lower-paying jobs these days.
PUTTING IN THE TIME
Their compensation may be on the way up, but readers certainly are not sitting back and enjoying their raises. In fact, they seem to be working harder than ever. Only 20 percent of those who took part in the survey said they worked 45 hours or less during the average week. Another 70 percent said they typically worked 46 to 60 hours a week (including time spent working outside the office). A no-doubt-exhausted 10 percent said they're devoting more than 60 hours a week to their jobs. And it doesn't seem to matter much what your title, industry, or location may be—with 92 percent of respondents reporting that their work hours had increased or stayed the same over the previous three years, it's clear that almost everyone is putting in their time, and then some.
One possible reason for the long hours is that most of the respondents have more responsibilities than they did in the past. Sixty-four percent of the survey participants reported that the number of functions they manage has increased over the past three years. Another 32 percent said their responsibilities had stayed the same, and just 4 percent reported a decrease. It's rare, moreover, for a reader to be responsible for a single function. Fewer than two-dozen of the survey takers said they have one functional responsibility, and more than half said they are responsible for three or more of the six functions mentioned in the survey. The greater the number of functions you oversee, of course, the more people to manage. No surprise, then, that nearly two-thirds (64 percent) of the survey respondents said they had five or more direct reports.
Another reason why DCV readers work so hard is that on average, 18 percent of their compensation is based on their performance. Vice presidents, directors, and managers in the third-party logistics, wholesale, and transportation businesses are most likely to have 50 percent or more of their pay based on performance.
With respondents reporting a wide range of titles and responsibilities, it's inevitable that our survey would show a significant range in salaries. Which titles pay the most on average? Corporate officers were at the top of the salary ladder. The average salary for C-level respondents was $250,364—considerably higher than the average salary of vice presidents, who at $181,077 were better paid than presidents and directors. They reported average salaries of $146,892 and $124,630, respectively.
From there, it's a big drop down to the lower levels. Managers made over $37,000 less than directors, and supervisors earned approximately $23,000 less than managers. Exhibit 1 shows the average salary for each title.
EXPERIENCE, EDUCATION COUNT
Job title may carry the most weight, but many other factors influence how much an individual logistics or supply chain professional makes. The region where you work, which industry you work in, your level of education, and how long you've been in the business will typically play a big role in determining your salary.
Let's start with education. Did your parents advise you to go to college so you'd make more money? They knew what they were talking about. Exhibit 2 illustrates the strong correlation between earnings and education. The average salary for respondents with only a high school diploma was $97,450. It was a big step up from there to a bachelor's degree—the highest level of education for nearly half of the survey respondents; those respondents took home an average salary of $121,113. A master's degree (either in the field or in business) was worth an additional $24,000.
Experience in the field also influences earnings (see Exhibit 3). The average salary of newcomers to the profession (those with five or fewer years of experience in logistics) was $85,620, while the median for that group was a respectable $77,000. Once you get up in the range of 16 years or more of logistics experience, both the average and the median salaries climb to well above $100,000. With an average salary of $148,675 and a median of $120,000, those who have been in the business longest (respondents with more than 25 years' experience) command a hefty premium for their expertise.
As Exhibit 4 shows, which industry you work in can have an enormous impact on your salary. Since nearly half of respondents are at the director level or above, it's not surprising that most of the industry averages exceed $100,000. The highest-paying industries include such high-growth sectors as third-party logistics ($160,357), pharmaceutical and health care ($136,526), and apparel and footwear ($136,569). On the opposite end of the scale are the perennially lower-paying industries like furniture and fixtures, at $87,222, and government and military, at $69,605.
There have always been significant differences in pay scales among the various geographic regions, and that continues to be true, as Exhibit 5 makes clear. The highest average pay, $141,981, was in the Southeast, home to some of the fastest-growing manufacturing and distribution areas in the country. The Midwest—still America's industrial heartland, with 38 percent of survey respondents—was next, at $123,846. New England reported the lowest average salary, the only region that came in at less than $100,000.
AGE HAS ITS REWARDS
A potpourri of other factors can have an influence on salaries. Our survey found that a respondent's age and gender, and the size of the company he or she works for can also make a difference.
Take age, for example. It's logical that salaries should increase with age, and that's exactly what the survey results showed. Younger folks—those in the 26-35 age range—averaged a respectable $88,730. Middle age has its rewards, though. Respondents aged 36 to 45 reported average salaries of $103,022, and the next bracket (46-55) made about $16,000 more. Those who stick with this profession for the long haul will be rewarded: Elder statesmen (and women) age 56 and older, the majority of whom have higher-level positions, earned average salaries of $133,650.
For as long as logistics industry salary surveys have been around, women have lagged behind men in terms of their compensation, and this year was no different. Female respondents earned an average of $84,601, while male respondents reported an average salary of $123,489—a difference of nearly $40,000, or 32 percent. That difference can be attributed in large part to less education, lower positions, and fewer years of experience than their male counterparts. One-third of female respondents had a high school education only, and just five of the women survey takers held vice president titles. Sixty-one percent of the women who responded to this year's survey had 15 years' experience or less, compared with 28 percent of the men.
The size of the company you work for makes a difference in your salary. As you might expect, small businesses—those with fewer than 100 employees—pay the least, an average salary of $92,277. Working for a larger company will get you a larger salary—at least $20,000 more for this year's respondents. Working for the largest corporations (those with more than 5,000 employees) does not guarantee the highest salaries, though. Respondents who worked for companies with between 500 and 1,000 employees did best, with an average salary of $157,350.
UPWARD BOUND?
As anyone who's ever undergone a salary review well knows, there are countless variables that might influence a person's compensation—not just the many factors mentioned above, but also such considerations as job performance, departmental budget, internal politics, and perks and benefits, to name a few.
But it's also clear that salaries reflect overall economic conditions. As orders and shipping volumes continue to climb, e-commerce expands, and more manufacturing returns to North America, demand for capable, knowledgeable logistics and supply chain talent will also continue to grow. And that means the size of their paychecks is likely to stay on an upward trajectory for some time to come.
What makes you happy ... or not?
As part of this year's annual salary survey, we asked respondents how they feel about their profession: Are they satisfied with their choice? Would they recommend it to others? What do they like most about their jobs? What do they like least? Here's a quick look at what they had to say.
The vast majority of respondents—88 percent—are satisfied with their career in logistics. Just 12 percent regret their choice. The same percentages said they would recommend the profession to a young person (or not).
Respondents like the logistics profession's fast pace; the variety of responsibilities, projects, and challenges; and its dynamic and flexible nature. "There's always a new challenge, and what worked yesterday may not work tomorrow," said one survey taker. Another likes "the ability to effect change, set strategy, and impact decision making."
There were plenty of complaints, too. Compliance with constantly changing regulations, being stretched too thin with inadequate resources, bureaucracy and politics, corporate roadblocks to efficiency and productivity, and the failure to understand logistics' contributions were among the things respondents like least about their jobs.
What would make survey takers happier in their work (besides a raise)? Some responses were specific to the individual, such as more vacation time, less travel, and more reasonable work hours. "Either give me additional headcount or put me and my team on fewer projects," said one respondent. But many focused on broader concerns, such as having clear and achievable key performance indicators (KPIs); having access to more training—not just on functional responsibilities but also to enable upward mobility; improving internal teamwork and collaboration; and having upper management understand and value logistics and its contributions. One respondent would like to see his employer "focus more on long-term improvements and less on hitting quarterly numbers," while another wants "transparency as to strategy, vision, and communications."
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."