Logistics Hiring Slowed in May Amid Shifts in Retail Sector

Trucking and warehousing companies added 31,000 jobs last month as pandemic-driven e-commerce growth appears to be waning,

Companies on the front lines of supply chains pulled back hiring in May amid signs that the boom in e-commerce demand is waning and consumers are shifting spending from goods to services.

Trucking, warehousing and parcel-delivery companies added a combined 32,900 jobs last month, according to seasonally adjusted preliminary employment figures the U.S. Bureau of Labor Statistics released Friday, down from 44,700 jobs added in April.

The pullback came as the broader U.S. economy added 390,000 jobs in May, in the slowest pace of growth in more than a year but still far above employment expansion before the pandemic.

The expansion in the trucking and warehousing sectors suggests logistics operators are continuing to staff up in a tight labor market as they work to unscramble supply chains.

Trucking companies added 13,300 jobs last month and have boosted employment by more than 70,000 jobs over the past year as operators have tried to keep up with strong freight demand. The figures suggest trucking companies are having success in recruiting efforts that have included higher starting salaries and sign-on bonuses, said Cathy Roberson, president of research and consulting firm Logistics Trends & Insights LLC.

“I think we are seeing some independent [owner-operator truck drivers] taking jobs with the larger trucking companies,” Ms. Roberson said.

Parts shortages and production delays still appear to be hindering further growth. FTR Transportation Intelligence said Friday that preliminary North American orders for Class 8 heavy-duty trucks fell to 13,300 big rigs in May, down 43% from the same month last year and the lowest level for orders since November 2021.

Don Ake, FTR’s vice president of commercial vehicles, said demand for trucks remains strong but that manufacturers are holding back adding to their lengthy backlogs with new orders because they “are not confident they can increase production in the second half of the year” due to parts shortages.

Warehousing and storage companies have added 176,700 jobs over the past year, according to the BLS figures, including some 17,700 in May, despite a tight labor market that has wages rising rapidly and operators competing to hire and retain workers.

Amazon.com Inc., which has driven much of the hiring and competition for workers in the logistics market, recently said it was pausing its aggressive expansion of its network of distribution centers and delivery operations.

Courier and messenger companies, including the package carriers that deliver e-commerce orders to homes and businesses, added 1,900 jobs in May, according to the BLS data, down sharply from the nearly 15,000 jobs added in April.

Employment in the parcel sector has been driven by the strong growth in online shopping during the Covid-19 pandemic that has pushed many more packages into distribution networks. Consumers more recently appear to be returning to stores, with major retailers including Amazon reporting online sales growth retreating from historic highs.

Still, that shift isn’t triggering major employment changes in the logistics industry, said Nick Bunker, economic research director for North America at job-search marketplace Indeed.com.

“Transportation and warehousing continues to be a real strength,” Mr. Bunker said.

Written by:  Liz Young, Writer, for The Wall Street Journal.