Will Logistics Provide a Good Career Path for Young Grads?

May 4, 2017

In this Presidential election cycle we saw surprising strength from both Bernie Sanders and Donald Trump in the primaries. While the Presidential election is the nastiest in living memory, one thing it has made clear is that there are a lot of Americans who feel they have been left behind. They see an economy where the rich get richer and the middle class is being hollowed out. Both Trump and Sanders pointed to global trade as an important reason for this. 

But the bigger reason for the loss of jobs is the growing power of automation. Martin Ford, in Rise of the Robots, wrote a book that was hailed as the best business book published last year.

The jobs lost to trade are primarily in the manufacturing sector.  And the fraction of workers employed in manufacturing in the U.S. has been falling since the 1950s. NAFTA, the first big trade deal, was enacted in 1994. Further, manufacturing jobs are disappearing all around the world, even in developing countries. Even in China.

One estimate is that for every 20 jobs lost to trade, 80 manufacturing jobs are lost to automation. Although to be fair, many economists say it is almost impossible to cleanly disentangle all the different factors leading to falling employment.

 

But logistics is not manufacturing. Even if goods are imported, they still need to be transported to the final customer. And most goods will need to be warehoused for part of that journey. Further, with the growth of ecommerce we are building more and more warehouses. And ecommerce is leading to smaller order lots. Direct-to-consumer shipments are smaller in size and greater in volume than traditional fulfillment, which increases the need for transportation.

Truck driving does pay a middle class income, although long distance driving is a tough job. While a job working on the warehouse floor does not pay a middle class wage, where there are many workers, there will be many managers.

 

So logistics as a career path is safe, isn’t it?

Not really. Just as automation has decreased the need for manufacturing labor, the same thing will almost certainly occur in logistics. We don’t know when the viability of self-driving vehicles will begin eliminating scads of driver jobs. However, it is clear that for someone just entering the job market, truck driving will not be a job they can do for the rest of their working life.

But in about the same time frame that truck drivers will be losing their jobs, warehouse jobs may become increasingly scarce. The story of Amazon buying Kiva, a warehouse robotics firm, is well known.  Back in 2009 I took a close look at Kiva. I estimated that a worker supported by Kiva bots was three times as productive as the more traditional advanced e-fulfillment methodology – zone picking to conveyor supported by Voice recognition. The productivity of these robots is probably even better today. 

 

But at least, Kiva does not completely replace the need for humans. But robots with arms that can actually pick items off of shelves could. The visual recognition issues associated with robot picking are quite difficult. But my colleague Clint Reiser, in his survey of autonomous robots in the warehouse, came across a company called Fetch Robotics with this kind of capability. And Google is known to have invested in 3D vision-guided robot picking technology.

 

When I first wrote about autonomous robots in the warehouse in 2009, I predicted that there would not be wide spread adoption for about 15 years. I was wrong by over a decade. Amazon bought Kiva in 2012 and began the process of replacing their workers with robots almost immediately.

Nevertheless, replacing workers with robots will be something that will occur incrementally and steadily. My colleague Clint did a survey on investment priorities in the warehouse for the next three years. Autonomous mobile robots were mentioned much less frequently than Labor Management, Warehouse Management, and other more traditional warehouse automation products. But despite the gradual pace of investment in robotics in the logistics sector, I don’t doubt we are going to be employing a whole lot fewer people in logistics in the years to come. 

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So is logistics a good career choice for new graduates? 

If you believe Mr. Ford, it is probably just about as good as most other careers. He foresees a future in which robots and advanced computerized automation replace jobs in sector after sector; A world in which there is almost no safe sector to work in.

I sure hope he is wrong.

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