Chat with a veteran at a container line, a forwarder, or a beneficial cargo owner long enough and the conversation will often turn to how hard it is to attract and retain skilled and younger workers. Scratch below the common forces testing many industries other than shipping and logistics — such as record low US unemployment and how so-called Millennials work differently — and a more existential and unique challenge reveals itself.
The lack of cross-training for various functions is creating an environment where fewer workers have the ability to solve problems creatively, according to conversations with more than a dozen industry veterans over the last year. In other words, the container shipping workforce may not have the same chops in managing the shipment of a container when scheduling, customs clearance, or a myriad of other factors go awry.
With container shipping increasingly commoditized, how carriers to forwarders respond to this challenge will determine the extent to which they can differentiate themselves in the market.
There are many reasons the industry has fewer people with the ability to problem-solve and look outside of their siloed responsibilities. Some blame an overdependence on technology, whether it’s the container line rep limited to reading a shipment status message from their screen or a cargo owner thinking logistics begins and ends with a transportation management system (TMS).
Shippers under pressure to reduce costs can cut resources too far in their supply chain functions, risking employee burnout and turnover, said Adriene Bailey, executive director of program development and curriculum at the Transportation Institute at the University of Denver.
“There is also this idea that, ‘Oh, we have a TMS system that does everything,’” said Bailey, formerly senior vice president and general manager of transportation at Yusen Logistics (Americas). “The reality is that when there is a problem — something out of the norm — it’s the people, not the system, that drives the ability to respond and recover.”
Container line executives gripe that their focus on cost cutting has made it harder to attract new talent, especially when it comes to those focused on technology. That carriers have moved their North American headquarters out of New York and California to third-tier cities hasn’t helped in recruiting members of the Millennial and Generation Z generations.
And while the proliferation of supply chain management degrees, both undergraduate and graduate, have provided a new talent pipeline, industry veterans complain many graduates enter the workforce understanding the theoretical but ill-equipped to actually manage freight.
“I’d rather hire a political science major than a supply chain MBA grad,” one senior logistics manager at a US importer said half-jokingly.
Some MBA programs find a better balance between the practical and theoretical, however. The Denver Transportation Institute’s master’s program, for example, takes a cross-modal approach focused on problem-solving and injects thinking from outside the industry, Bailey argues. That’s hardly to say that MBA programs are the industry cure-all; a multiprong approach is needed.
It is key that companies — especially at executive levels — create effective ways to develop leaders from internal talent. Companies should encourage cross-functional experience, including lateral moves; invest in training, even for senior leadership; and add to the team from outside the logistics sector to drive innovation and accelerate institutional learning.
“If you make a lateral move or even take an assignment at a lower grade level to gain experience, you can run into compensation policies that require your salary to be frozen or, in some cases, a pay cut would be required,” Bailey said.
Additionally, companies would do well to look internally and consider what they can do — or stop doing — to make themselves more attractive to women and minorities, both of which are woefully underrepresented, as well as younger people.
“From the outside looking in, companies need to figure out how they are going to engage and use talent differently than they did before,” Bailey said. “My perspective is that the industry is behind the curve. We are an old industry, and we tend to be slower to adapt than others.”