Logistics Hiring Growth Slows on Industrial Weakness
Date: Monday, November 4, 2019
Source: Wall Street Journal
Truckers edged back into hiring mode last month as overall logistics-sector job growth remained muted ahead of the holiday peak.
Trucking company payrolls grew by 1,300 jobs in October, ending a three-month stretch of job losses, according to preliminary employment figures the U.S. Bureau of Labor Statistics released Friday. The trucking industry added 11,000 jobs between October 2018 and October 2019, the slowest rate of annual growth in nearly two and a half years, as carriers contend with weakening freight demand and a slow start to the fall shipping period.
“We have seen some seasonality and promotional volumes related to the traditional retail peak season but they are well below the frothy conditions of last year,” Mark Rourke, chief executive of Green Bay, Wis.-based trucker Schneider National Inc., said in an Oct. 31 investor call.
Courier and messenger companies added 2,400 jobs last month as hiring slowed among businesses that deliver packages to homes and businesses. United Parcel Service Inc. said it expects to hire nearly 50,000 seasonal workers on Friday, when the parcel carrier was scheduled to hold more than 185 job fairs across the country.
Hiring at warehousing and storage businesses added just 500 additional jobs in a sector that includes online fulfillment centers.
Auto manufacturing payrolls lost 41,600 jobs last month as thousands of GM workers took to the picket lines and some auto suppliers cut production. Excluding that category, manufacturing hiring expanded in October, when some measures showed modest improvement in the factory sector from the prior month.
Consumers have helped bolster the U.S. economy as industrial growth falters, with holiday sales expected to rise in a range of 3.8% to 4.2% this year, according to the National Retail Federation. Household spending increased heading into the fourth quarter, though at a slower pace than last year.
The divergence between the consumer and industrial sides of the economy is rippling through logistics networks that transport parts to factories and move retail goods from ports to warehouses and stores.
Several trucking companies have reported declining third-quarter revenues and profits, citing an oversupply of truck capacity and slipping demand.
Less-than-truckload carrier YRC Worldwide Inc. said the General Motors strike contributed to depressed volumes at its regional trucking units. YRC reported a 3.6% decline in quarterly revenue, to $1.26 billion, and said LTL tonnage per day fell 4% from a year ago.
“Our focus is on pricing for profit and using internal cost controls to weather the storm until we get back into a more normalized tonnage environment,” YRC Chief Executive Darren Hawkins said in a Thursday call with investors.