By: Tamara Bacovic, IB Sales Manager
As businesses transition into 2023, they still face ongoing challenges such as managing costs, finding and retaining workers, and operational efficiency. However, optimism has been reinforced as e-commerce order volumes continue to increase, businesses actively look for new carriers, and profitability gains made in 2022 have created a great foundation for profitable growth in 2023.
Labor Woes
Labor shortages, rising labor costs, and warehouse space shortages remain major challenges for the logistics industry as of May 2023.
Regarding labor demand and costs, finding and retaining qualified workers continues to be the second biggest concern heading into 2023, following closely behind managing costs. Hourly pay for warehouse workers has continued to rise compared to the previous year, despite organizations optimizing and automating their warehouses. The industry still relies heavily on these workers to meet demands.
Space Crunch
In terms of warehouse space and capacity, 2022 saw a record number of warehouses operating at or beyond capacity, and experts predict that businesses will continue to struggle to find additional warehouse space through the end of 2023. This is due to low vacancies and higher rent, with 60% of warehouses using more than 90% of their space and another 28% running between 80% and 89% utilized. As a result, businesses are at significant risk of not being able to keep up with client growth.
Optimistic Outlook
In a survey conducted by Extensiv, a SaaS company, industry leaders expressed continued confidence heading into 2023. Acquiring new customers, growth related to e-commerce, and automating warehouse processes were identified as the top three opportunities to drive growth. In terms of customer acquisition channels, industry experts suggest focusing on generating more inbound inquiries, such as through organized customer referral programs or industry-related company listings.
The Tech Factor
Technology automation and adoption are also key opportunities for companies responding to the survey, with growing consumer expectations for increased speed and visibility throughout an order/shipment’s lifecycle. On average, the companies surveyed indicated that 1.5 new technologies will be integrated into their business in 2023.
Tips for Navigating the Logistics Industry in 2023
To capitalize on these opportunities and overcome the challenges associated with them, industry experts recommend focusing on a few specific industries and fulfillment types to ensure that processes support the best practice workflows. Additionally, considering the career path for warehouse workers and helping them identify opportunities for growth and advancement, as well as reporting and focusing on leading indicators that could have the biggest impact on revenue and profitability, can also be beneficial.
Meet International Bridge, Your Logistics Partner for Success in 2023
To address the labor shortage issue, International Bridge has implemented programs to attract and retain top talent. We offer competitive pay, benefits, and career development opportunities to warehouse workers, recognizing their valuable contributions to the success of the business.
In terms of warehouse space and capacity, International Bridge is constantly looking for ways to optimize space utilization and streamline operations. We leverage technology and automation to improve efficiency, while also prioritizing the safety and well-being of our workers.
As businesses transition into 2023, it’s clear that there are many ongoing challenges in the logistics industry. However, International Bridge is leading the way in addressing these issues and driving growth. If you’re looking for a logistics partner that prioritizes innovation, efficiency, and employee satisfaction, consider partnering with International Bridge.
Contact us today to learn more about our services and how we can help your business thrive in the challenging logistics landscape of 2023.