Operations and Logistics

Operations and Logistics

Industry Outlook

The coronavirus pandemic, which started in Wuhan, China, in late 2019, caused major disruptions early on to the operations and logistics industry. The disruption started in manufacturing in China, which then impacted supply chains around the world. A combination of factors contributed to this: backlogs of cargo at major container ports, travel restrictions that led to shortages of truck drivers, and cancellations of ocean carriers that would have transported the containers. The operations and logistics for various major industries were affected by this, including medical equipment and supplies, pharmaceuticals, automotive, electronics, and consumer goods. Lockdowns and border closures impeded the movement of goods, and freight bottlenecks occurred due to pandemic protocols such as social distancing requirements at warehouses. The rollout of the COVID-19 vaccine in 2021 will boost the economy and loosen pandemic-induced restrictions. As of late 2020, the U.S. freight packing and logistics services industry was valued at $3 billion, with 7,458 businesses employing 22,515 people. The research group IBISWorld predicts continued growth in this industry through 2025. Trade continues to expand and as the global economy finds support, consumption levels will resume.

The International Finance Corporation predicts that, post pandemic, logistics costs may increase due to more restrictions on cross-border processes. There will be more dedicated capacity for air cargo. Operations and logistics companies will invest further in technology such as cloud computing, automation, and data analytics; and down the road, the use of robotics, drones, and autonomous vehicles might bolster their workforce and prevent employee shortages. The pandemic highlighted the downfalls of having complex and extended value chains. Moving forward, many supply chains "may shorten or diversity through reliance on alternative partners (for example, nearshoring) or intensified efforts to bring home (such as reshoring) strategic value chains." Other trends in the future may be adding additional warehousing capacity or dry ports near demand centers, which would reduce the time needed to deliver goods.

Growth in the operations and logistics field will vary in the coming years depending on the industry. The Bureau of Labor Statistics (BLS) predicts a .5 percent decline in the manufacturing industry through 2028. A number of factors are contributing to the decrease of jobs in manufacturing. Many manufacturing jobs are still being sent overseas and more firms are outsourcing jobs to “contract manufacturing.” Contract manufacturing is when manufacturers contract other firms that specialize in creating components or products, for faster, more efficient production of goods. Also, many manufacturing plants are becoming automated, requiring workers who have more technical skills than those hired in the past. The transportation and warehousing industry, on the other hand, will have .6 percent annual employment growth through 2028. This growth is being driven by the increase in e-commerce, which has increased the demand for warehousing and transportation services.

A .2 percent decline in employment growth is projected for workers in the wholesale trade sector, through 2028. Wholesale trade services will continue to be needed, however, as this sector is part of the supply chain of manufacturing, retail trade, health care, social assistance, and other sectors.

Operations and logistics professionals who work in management, scientific, and technical consulting services will have good job prospects through 2028. Companies continue to seek the best ways to lower costs and improve business operations, which has resulted in a growing movement to retain consulting services for such tasks rather than hiring full-time workers.

Management occupations will have 7 percent employment growth through 2028, as predicted by the Department of Labor. General and operations managers will have 7 percent employment growth in that same timeframe. The states with the highest level of employment of general and operations managers are California, Texas, New York, Florida, and Illinois.

Industrial production managers will experience little or no employment growth the next few years. Many manufacturing companies are adapting leaner production models, which is helping them to increase productivity with fewer workers than needed in the past. Some manufacturing companies are sending work to other countries. There has been some recent activity in “reshoring,” however, which may offer more job prospects for industrial production managers. Reshoring is when outsourced personnel and services are brought back to the United States from other countries. There are also some companies that are locating manufacturing plants and businesses in lower cost areas of the United States as opposed to foreign countries. This trend of “domestic sourcing” may also offer opportunities for industrial production managers and related workers.

Purchasing managers, buyers, and purchasing agents will have a 6 percent decline in employment growth through 2028. Competition for jobs will be particularly keen so those with a master’s degree in business or supply management will have the advantage in the job market. Companies will still need buyers and purchasing agents to purchase goods and services for their business operations, but the growth of outsourcing this type of work will limit employment opportunities. Another trend that is negatively impacting the employment of buyers and purchasing agents, as well as purchasing managers, is the growing popularity of hiring third-parties for market research and supplier assessment.

Logisticians will have good employment opportunities in the coming years. The Department of Labor (DOL) predicts 5 percent employment growth, about as fast as the average for all occupations, through 2028. Most logisticians work in government and manufacturing, and will be needed to manage the transportation of goods in the global economy. Companies will need logisticians to manage increasingly complex supply chain processes. Employment opportunities will also arise due to the need to replace logisticians who retire or leave the field. Logisticians who are skilled in logistical software or who have experience in military logistical work will have the best job prospects. Logisticians earn the highest salaries in the following areas: oil and gas extraction; highway, street, and bridge construction; other specialty trade contractors; petroleum and petroleum products merchant wholesalers; and business, professional, labor, political, and similar organizations.

Material recording clerks will also have little or no employment growth through 2028, according to the DOL. The increased use of shipping technologies, including hand-held devices that read barcodes, has sped up the shipping process and reduced the number of shipping clerks needed. Production, planning, and expediting clerks, who are involved in the planning and scheduling of production and shipment processes, will continue to have employment opportunities because their work is not easily replaced by technology.