It’s the one problem that seemingly unites companies across food services and logistics, a labor gap that just keeps widening. Here in the United States, that gap is growing at an alarming speed, compounding an already challenging business climate across industries, but for too long food services and logistics in particular have shouldered much of the pain.
Today, estimates show roughly 8 million open jobs in the United States, but here’s the crux of the problem: Only 6.8 million people today are unemployed and looking for work. That means we’re faced with a shortage of more than 1 million workers. If you compare the state of the workforce today to pre-pandemic February 2020, there are nearly 2 million fewer people in the workforce now vs. then.
This shortage of skilled talent didn’t just appear, it’s been building for years. An aging workforce, early retirements, and declining immigration have presented employers with the recruiting and hiring struggle of a lifetime.
President Trump’s proposed policies are causing further angst for the food logistics sector. While there’s certainly reason for worry, there’s also a unique opportunity standing before the incoming administration and Congress to implement improvements that could set up the industry for growth and success for years to come.
Rough stretch across food logistics
The labor shortage has had a far-reaching effect throughout the food logistics industry with warehousing and distribution, transportation, and cold chain in particular bearing the brunt. As these shortages have persisted, the trickle down across the operation can be rough. It means more of the daily burden is dumped onto those that are on the team.
For warehousing and distribution the disruption to business is deep, with a Descartes study showing that close to 40% of logistics and supply chain-related companies are faced with significant shortages in the labor force. In that same study, 61% said they experience disruptions in transportation because of understaffing, while 58% said the shortages are having a negative effect on customer service.
It has left leadership with little recourse, leaving many warehouses to adopt automation and AI technology so the operation can still realize some degree of efficiency in spite of the lack of warm bodies on the warehouse floor. The same solution has been considered within cold chain logistics as well, calling on these technologies to improve efficiency and cost-effectiveness. On the transportation side, the end result has been bottlenecked deliveries, including food products. Here too, companies have searched high and low for alternatives, exploring things like improved working conditions and competitive compensation as a way to attract and retain drivers.
It’s already a fraught situation to navigate and the last thing anyone wants are emerging factors that make this labor gap even worse, but that very well could be the story of 2025.
Trump 2.0: From mass deportations to tariffs
Campaign rhetoric and post-campaign policy musings by Trump have caused reason for concern as the already serious labor shortage persists and is about to overlap with his new administration. Whether or not he actually carries through with mass deportations and new tariffs is anyone’s guess, but just the threat of these scenarios warrants consideration and forward thinking. It should also be noted that some of these policies could be positive for the workforce, as long as areas like visas, for example, get the attention they need.
Immigrant workers are especially vital to warehouse operations, truck driving, and food packaging. Forcing immigrants out of the country via mass deportations would lead to a full-on staffing crisis in the food logistics sector, making existing worker shortages far worse, while also causing operational costs to grow, disruptions to the supply chain, and even food waste. Mr. Trump has also threatened numerous countries with new tariffs, which could have at least some positive effects on boosting domestic manufacturing. But this also would create even more jobs at the worst possible time.
Coupled with mass deportations, such action would make hiring exponentially more difficult. In food logistics, it means competition for talent would be fierce, with higher wages leading to deeper operational costs that would in the end erode profit margins. This all could have a direct impact on the businesses’ ability to remain competitive, not something anyone in the c-suite or business office wants to hear.
Streamlining immigration and visa processes
Regardless of whether or not these scenarios actually become reality, there is a growing need to address labor shortages, present and future, by starting first with work visas. Streamlining the immigration and visa process is a crucial first step that the new administration can take to compensate for any policy changes that could further upend hiring.
In particular, programs like the H-2B and EB-3 visas can help to bring in more foreign workers to fill these roles. Simplifying the process and increasing the number of visas that are available would be an important first step, enabling businesses to hire the workers they need without delay. Reform that is focused on attracting talent is vital to the industry’s resilience and sustainability.
Employer strategies to narrow labor gap
The greatest potential in turning this problem around lies within the ability of food logistics companies and leadership to take proactive steps on their own.
Offering signing bonuses, competitive wages and flexible work schedules are some of the golden keys in attracting talent from today’s workforce. These incentives go far in upping the ante when it comes to attracting talent. Benefits like childcare assistance, transportation allowances, and even educational opportunities can do wonders in breaking down the barriers to employment. Retention programs can be built around employee satisfaction and career development, reducing turnover in high-demand roles such as truck driving. Technology investment is also critical, helping to automate routine tasks, for example can ease the burden that’s been left on the existing workforce while also making operations more efficient.
There’s also high value in food logistics companies promoting apprenticeships and trade school partnerships. This can create a pipeline of skilled workers along with lasting relationships that can help companies not just find the right talent, but in developing them before they even come through the door. Partnering with educational institutions can help make available hands-on training in supply chain management, refrigeration, and transportation.
Collaboration is road forward for food logistics
Peeling back the layers, it’s clear that this is a complex problem that requires strong collaboration. No single solution is going to prove to be the silver bullet here. That’s why the food logistics industry must work with policymakers, other businesses, and trade schools as it moves into President Trump’s second term. While his policies could create opportunities like job growth via tariffs, they also present a great deal of risk, particularly concerning immigration.
The path to ensuring a resilient food logistics industry lies in taking a “head-on” attitude, recognizing what could come next and being prepared for it with a detailed plan of action. If the industry is going to continue meeting the demands of a growing populace, innovation and technology while fighting for supporting policies, benefits and incentives, will go a long way in helping the industry navigate the labor gap while securing its future.
