Logistics has become a major driver of employment growth, led by the logistics of e-retailing. For example, numbers just published by the Wall Street Journal, based on data from SEC filings, suggest that Amazon has created 500,000 new jobs around the world over the past twelve months, with 400,000 of those jobs being in the US. This represented just under half of jobs created by all US Corporations listed on the Standard & Poors 500 Index over the past year. It is to be assumed that most of these new jobs at Amazon were logistics-related, although the Seattle giant does have very large operations in non-logistics businesses, notably in data centres, however, these businesses tend to have much smaller workforces.
The next largest employment generators after Amazon were the express carriers FedEx and UPS. They expanded their employment by 50,000 and 48,000 respectively. These over-shadowed the numbers from non-logistics companies such as Pepsico, Tesla, BorgWarner, Costco and Microsoft. The exception was TJX which has expanded its conventional retailing operations in the US considerably, suggesting that not all of the traditional retailing sector is collapsing.
It is important to note that such figures amplify trends in the US, where the shift to e-retail has been particularly violent. In particular, Amazon is a near-dominant retailer in the US, which is not true elsewhere. The US-style of ‘Big Box’ retailing has proved vulnerable to competition from e-retail and the US had existing capabilities for home delivery. Not all economies are like this.
Nonetheless these numbers suggest that logistics is growing in importance in advanced economies generally. It is a good question if this is reflected in overall spending on logistics or if one ‘industry vertical’ is just displacing another. Higher employment levels imply higher spending, yet the operations of Amazon, UPS and FedEx are characterised by increasing levels of automation and thus high levels of capital spending. What is probably true is that workers in retail are being replaced by workers in logistics organisations.
However, it is reasonable to suggest that these numbers support the suggestion that logistics is becoming a more prominent part of advanced economies at the domestic level.
Source: Transport Intelligence, April 6, 2021
Author: Thomas Cullen