In a bid to shorten their supply chains, companies are looking to bring manufacturing back to U.S. shores. But are we ready? Rosemary Coates answers that question and more in the last of three interviews on workforce issues.
Diane Rand is Associate Editor and has several years of magazine editing and production experience. She previously worked as a production editor for Logistics Management and Supply Chain Management Review. She joined the editorial staff in 2015. She is responsible for managing digital, editorial, and production projects for DC Velocity and its sister magazine, Supply Chain Quarterly.
The past year revealed many kinks in our supply chains—particularly our far-flung global supply chains. That has managers rethinking the wisdom of sourcing products so far from their end-users, with all the complications that entails, and exploring the idea of bringing manufacturing back to U.S. shores.
But that raises some questions: Are we ready? Is the U.S. prepared to rebuild the broad manufacturing base—and the supporting workforce—it lost to Asia decades ago? And what will it take to get us there?
To find out, Diane Rand, managing editor of DCV’s sister publication,Supply Chain Quarterly, recently spoke to Rosemary Coates, executive director of the Reshoring Institute, a nonprofit that provides resources to companies looking to bring manufacturing back to the U.S. The interview, which was conducted for “Supply Chain in the Fast Lane,” a podcast coproduced by Supply Chain Quarterly and the Council of Supply Chain Management Professionals (CSCMP), concludes our three-part series on finding and retaining a first-class workforce.
Q: Given the supply chain disruptions we’ve experienced over the past few years, more and more companies are considering reshoring manufacturing and production. But that has raised concerns about labor—specifically, whether the U.S. can provide enough skilled workers to support those operations. How valid a concern is this?
A: I think that is very valid. In the early 2000s, we started moving production offshore to China, and with it went the entire supply chain—so all the suppliers and so forth ended up in China as well. Because we lost so much production during that period, we also lost skill levels in things like tool and die making along with trained electricians and welders. These are trades that were minimized during this period, so now, as we are bringing manufacturing back and rethinking how we manufacture, we need to retrain people for these specialized jobs. I think we’re going to limp along for a couple of years until we get that done.
Q: How can we overcome these labor-related challenges and make reshoring a reality?
A: I think there are needs and opportunities across the board, from entry-level manufacturing jobs all the way up to executive-level positions in manufacturing and supply chain. I believe part of the problem, though, is that politicians—and a lot of our policies—are focused on jobs, jobs, jobs, when actually the problem is training and education. We need to focus more on education so that we’ll have a trained workforce that can step into a manufacturing environment. I think that [burden] is going to mostly land on the shoulders of community colleges throughout America.
We have a wonderful system of community colleges that now offer courses that are a crossover between basic manufacturing and engineering. Most manufacturing jobs now require mathematics skills, expertise in computer operations, and an understanding of robotics. They’re not fully engineering jobs but they’re not basic manufacturing jobs either—they’re somewhere in between. The community colleges are smack dab in the middle of that space, and I think they’re going to pick up the burden and get people trained over the next couple of years.
Q: Beyond working with community colleges, what are some best practices you’ve seen in terms of training potential workers?
A: We know there were a few disasters that occurred because companies decided to bring manufacturing back but didn’t give much thought to where they’d find the skilled labor they’d need. They limped along until they could develop a trained workforce.
I think the best practices are to focus not just on training but also on planning ahead: What skills am I going to need for my specific operation, whether it’s a factory or a warehouse? How do I work with my local educational institutions to produce workers who can fill those roles?
Then the other thing is that many cities and states are now providing educational incentives and will reimburse companies for getting people trained.
So, we are all moving in the right direction. It’s just that you can’t just snap your fingers and expect it to be done. It is going to happen over time.
Q: Can technology and automation alleviate some of these labor shortages in the near term, and are they viable alternatives in manufacturing and distribution?
A: Absolutely. Automation is the key because through automation you can extract labor costs. As you know, we have high labor costs in the U.S.—if we were to go head to head [with other countries] on labor costs, we couldn’t compete. To solve that problem, you have to implement technology and extract that labor cost.
You can get capital investment money, and there are ways to automate and re-engineer your production line, but you have to train the workers so that instead of putting pegs in holes, they’re now running robots that put pegs in holes. Those are different skill sets. Learning to run robots and operate machine tools and so forth requires higher-level skills. These are also higher-paying jobs and essential to rebuilding the middle class in America.
Q: Let’s say someone wanted to switch careers and find a job in the supply chain. They need training. On average, how long does it take to develop the needed skills?
A: I think of it as a continuum. If you are looking to fill, say, a warehouse job, it’s no longer going to be just carrying boxes around. In today’s environment, a warehouse job is more likely to entail running the robots that go and pick items off the shelves and place them in line for shipping. That is a different level of skill. For that type of job, it’s probably an 18-month to two-year training and career path at either a community college or a technical training school.
But if you looked up the continuum at jobs for supply chain professionals who help run the global business, that typically requires a four-year degree. There are many great programs out there, and they’re offered at universities all across America.
Then on top of that, we also have a need for strategists—typically MBAs or people with a master’s degree in engineering—who can think globally about the strategic aspects of supply chain management.
Q: Thank you. As a mom of kids who are heading off to college, I’m always telling them about this industry, how amazing it is, and the many opportunities it offers.
A: It’s funny you should say that. I have a grandson who just graduated from the University of Kentucky. While he was in business school working on a management and marketing degree, I kept urging him to take a supply chain class, but he was reluctant. Finally, he did, and he was like, “Wow, this is really interesting, Grandma.” Now he is looking for a job in supply chain.
I would agree that supply chain is interesting. It’s also very global in nature and often provides opportunities to travel around the world. Plus it’s complex and technology-driven. It’s got all the kinds of goodies that you would look for in a new job.
Q: What are some common misconceptions about the current labor pool in North America?
A: I think companies understand that there’s a labor shortage. We can’t find skilled workers, and it’s particularly difficult in rural areas.
I think the bigger divide that we have to cross is more instructional—that is, making politicians understand that this is not just about creating jobs; it’s about developing a skilled, trained labor force. The money and emphasis should be put on training to fill those open jobs now and in the future.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
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.”