COVID-19’s Impact on the Demand for Distribution Center & Logistics Industry Workers

by Josh Bays, on May 20, 2020 12:07:04 PM

A similar report adjusted for the manufacturing sector can be found here.

If you are anything like me, reading or writing the word “COVID” causes mental fatigue that seems to be exacerbated by the day. The entire world (but for the sake of this blog we’ll focus on the distribution center and logistics industry), is feverishly assessing how this pandemic is affecting their business so they can react accordingly. And when an event such as this pandemic is everchanging, assessing its impact in real-time is difficult, which makes it nearly impossible to proactively implement long-term strategic initiatives with confidence.

While many logistics companies are in strategic planning mode to optimize supply chains, there are quite a select few that are currently navigating site selection projects. These locationally active companies (and their consultants) are being forced to re-evaluate the process for assessing labor markets, and more specifically, determining how COVID-19 is impacting and will impact the availability of a qualified workforce. 

Assessing labor market trends in the ‘New Normal’

The long-term prognosis for any labor market is going to be heavily influenced by the industry composition of that specific community. Site Selection Group published a blog on this very topic last month. Although the latest cutting-edge data and analytical models can be used to peek into the crystal ball to make comparisons, many conclusions drawn today about the future are merely conjecture.

Assessing labor markets in the short term is proving to be challenging as most workforce data lags too long in this dynamic environment to accurately capture reality (e.g. unemployment data). While any workforce analysis should include a heavy dose of organic research such as interviews of existing employers, education institutions and workforce development partners, Site Selection Group leverages job posting data that can be informative in understanding competitive pressures in a market almost real time.

Job posting data for production occupations

Job posting data, one of the few almost real-time labor market data sources, is simply the volume of job openings being advertised by existing employers. This data can be categorized by time period, geography and occupation. Although there are a variety of relative measures that can be used with job posting data (i.e. posting intensity, unique postings, etc.), it is interesting to see how overall job postings has changed for distribution occupations over the last three months. The following map represents all metro areas with a population over 1 million shaded by percent change in unique job postings for distribution occupations over the last 90 days.  As one can see, the vast majority of metro areas have seen a significant decrease in job postings activity since the beginning of the pandemic.

Distribution Center & Logistics Industry Job Posting Change in Last 90 Days

Top 10, bottom 10 metro areas for change in distribution center and logistics industry job postings

The following table shows the 10 metro areas with a population greater than 1 million that had the least severe drop in unique job postings for distribution center and logistics related occupations over the last 90 days (in fact, one metro area actually saw an uptick). It appears that classic distribution center metro areas close to population centers have been impacted the least.

Top 10 Metro Areas with Least Change in Job Postings in Last 90 Days

Metro Area State % Change in Unique Postings
Denver-Aurora-Lakewood CO +3.9%
Oklahoma City OK -0.6%
Fresno CA -2.1%
Phoenix-Mesa-Chandler AZ -3.4%
Kansas City MO-KS -5.2%
Los Angeles-Long Beach-Anaheim CA -5.3%
St. Louis MO-IL -5.6%
Cleveland-Elyria OH -5.7%
Riverside-San Bernardino-Ontario CA -5.8%
Las Vegas-Henderson-Paradise NV -6.8%

On the other hand, the following table shows those metro areas that saw the most drastic drop in unique job postings for distribution center and logistics occupations over the last 90 days.

Top 10 Metro Areas with Greatest Change in Job Opening in Last 90 Days

Metro Area State % Change in Unique Postings
Pittsburgh PA -23.5%
New York-Newark-Jersey City NY-NJ-PA -19.5%
Philadelphia PA -17.5%
New Orleans-Metairie LA -16.9%
Louisville KY-IN -16.5%
San Antonio-New Braunfels TX -16.2%
Birmingham-Hoover AL -16.0%
San Jose-Sunnyvale-Santa Clara CA -15.8%
Rochester NY -15.7%
Detroit-Warren-Dearborn MI -15.3%
Topics:Distribution CentersEconomic IncentivesReal EstateSite Selection GroupSite SelectionLocation Advisory



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