Freight and Warehousing Firms Add Jobs in September, Bucking Downturn

By Jennifer Smith Features Dow Jones Newswires

The freight transport and warehousing sector defied the national downturn in hiring last month, adding 12,400 jobs as warehouse operators and package-delivery companies boosted payrolls at a rapid pace.

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The gains extended strong growth in sectors tied to e-commerce, as companies get workers and goods in place for another expected surge in online holiday sales.

Warehousing and storage companies, a group that includes the burgeoning business of managing distribution centers filled with online retail inventory, added 4,800 jobs from August to September, the Bureau of Labor Statistics reported Friday, pushing total employment in the sector to a new high of 961,000.

Courier and messenger firms, including the parcel carriers that deliver online orders, added 3,600 jobs last month, giving the sector 32,000 more jobs than the same month last year.

This holiday season Deloitte expects online sales to rise 18% to 21% compared with 2016, and the National Retail Federation forecasts that nonstore sales will rise 11% to 15%. Both figures are far stronger than the single-digit gains forecast for overall retail sales.

Low unemployment and a tight labor market have accelerated seasonal recruitment efforts, with some logistics companies and staffing firms posting job ads as early as July. Average pay for entry-level warehouse workers is expected to hit $13.68 an hour during this holiday season, up 10% compared with nonpeak wages and a nearly 5% increase from 2016, according to logistics staffing firm ProLogistix.

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This year United Parcel Service Inc. plans to add 95,000 seasonal workers, from package handlers and delivery helpers to drivers who run big-rigs loaded with packages from one facility to another, while FedEx Corp. expects to hire more than 50,000 for the peak.

The expansion came as the BLS reported that the U.S. overall shed 33,000 jobs last month. Two major hurricanes hit the U.S. mainland in September, slashing employment in the restaurant industry and ending the longest string of job growth on record. Including transit and ground passenger business, the transport and warehousing sector added 21,800 jobs last month, the strongest gain among the sectors that BLS tracks.

Trucking employment, meanwhile, slipped by 100 jobs as carriers riding a resurgent freight market reported trouble recruiting drivers.

The hurricanes could compound recruitment pressure on trucking companies if drivers leave for construction jobs spawned by rebuilding efforts, Stephens analysts wrote in a research note last week. "We believe carriers will start to announce new rounds of driver pay increases in the near-term and believe any discussions around driver wage increases will be an important topic on earnings conference calls," the analysts wrote.

Shipping prices for trucks soared in September as hurricane relief efforts in Texas and Florida diverted trucking capacity from other regions.

DAT Solutions LLC, an independent marketplace matching freight loads and trucks, said demand for a variety of trucking services jumped in September while capacity pulled back, sending prices on the spot market soaring. Average rates for truck vans, the most common truck transport, jumped 11% from August to September and were up 22% from a year ago.

"There's just not enough trucks to move all the freight that needs to get moved," said Mark Montague, a senior industry analyst with DAT.

Write to Jennifer Smith at jennifer.smith@wsj.com

(END) Dow Jones Newswires

October 06, 2017 15:16 ET (19:16 GMT)