Paul Stewart Logistics Law

Why I Mentor Young People Toward Careers in Logistics

My son Austin is a junior at the University of Tennessee, majoring in the Supply Chain Program. Proudly, I also note that he currently has a 3.5 GPA (not an entirely subtle or unintended mention to those looking for 2018 graduates). He recently asked me why I consider such a career promising for those I occasionally mentor. Since I could offer nothing but generalisms, I thought it was time I took a more objective look, if I was to continue recommending such a course of study to other young people who from time to time ask my advice. Brief research, especially with reference to the 2015 and 2016 Annual Third Party Logistics Studies, gives further confidence in some of my past advice (or blind squirrel finds an acorn, perhaps).

The Lens Through Which I See U. S. Logistics Industry as Great Opportunity

In order to give the reader perspective on my comments, I must explain the nature of that portion of my professional life which overlapped being a lawyer within the logistics sector. In addition to practicing law during my 35 years in the logistics industry, I have been blessed with much executive business-side experience. That experience included being EVP of strategic development for a leading international 3PL; consulting on logistics venture capital projects; mergers and acquisitions; and CEO of a start-up 3PL, to point of sale.

Those years included numerous acquisitions wherein I was lead counsel, as well as responsible for integrating the acquired target within the logistics companies for whom I was employed. As general counsel, I also litigated many 3PL conflicts from the perspectives of shipper, intermodal provider, truck broker, carrier, 3PL and 4PL. I say all that to say I have been fortunate to know the logistics industry from many perspectives and thereby perhaps have a unique appreciation of the opportunities available to young people looking for direction.

When given the occasion to advise any young person as to why supply chain management (SCM) offers unique and unlimited opportunity, I usually start with how multi-faceted and relatively young all components of logistics management really are. Those of us who have been in this industry for more than 20 years know that within such time whole new career fields have originated. Just twenty years ago SCM was a more simplistic, dyadic, static and inefficient process, which rarely included the many services from what we now know as third party logistics management (“3PL”).

It was as late as 2001 when industry professionals began to seek a common definition of what this “new” discipline might fairly be said to include. Shortly thereafter, the Council of Supply Chain Management Professionals (CSCMP) offered the following distinction between overall SCM and those aspects of SCM which might be undertaken by collaboration with a 3PL, concluding that such separate 3PL processes,

“…typically include inbound and outbound transportation management, fleet management, warehousing, materials management, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers.”

As each of these elements of 3PL matured, they likewise called for more distinct processes (i.e., brokered transportation, sophisticated TMS, on-site planning and execution, analytics, effective collaboration, etc.) which required more innovation and brighter personnel with which to manage heretofore unknown processes. Such requirements intensify annually as the 3PL sector attempts to demonstrate sophistication of methods, processes and collaboration beyond the year before.

Opportunity as a Function of Innovation, Geometric Growth and Talent Shortages

By 2000, U. S. 3PL gross revenue amounted to $54B. Through 2016 is has grown to $195B, and is expected to grow by an average of 6-7% per year over the next five years. Very few industry sectors can claim such a growth rate, but perhaps more encouraging to a young person looking for career opportunities is the relative talent now employed in 3PL when considered against talent demands faced by 3PL companies. Simply put, 3PL functions must grow away from mere tactical processes into the more strategic and collaborative. This transition will require, for lack of a better term, more “brainpower”, new perspectives and a willingness to challenge the status quo. Simultaneous to the need for brighter talent, as reported in the 19th Annual Third-Party Logistics Study, 60 million employees were exiting the supply chain industry with only 40 million people joining the industry to fill the gap.

According to the 2016 Third Party Logistics Study (TPLS ), ‘the logistics industry is facing an unprecedented labor shortage, which will bring both challenges and opportunities.’ They also point to the lack of talent now employed by 3PLs, and that ‘79% of 3PLs feel they are unprepared for the labor shortage’s impact on their supply chain’, thus, ‘going forward, the demand for supply chain jobs is likely to increase, however the supply of labor is expected to shrink.’

TPLS also makes the obvious point that with such a labor shortage and the simultaneous need for new and creative approaches to 3PL services, all logistics companies must now compete vigorously for available talent, especially the “best and brightest”. These factors have already led to vigorous recruiting efforts for supply chain graduates, especially those from the better university programs in supply chain management.

3PL’s Need for Continuous Innovation, Along with Talent Shortage, Creates a Seller’s Market for Bright New Entrants

According to the 2016 TPLS, supply and demand for logistics talent has created a new model within which potential employees “…are seen as valued customers, with the job experience being the product they are buying”. With such an unusual disparity in bargaining power between potential talent and employers, it is now the employer who must be aggressive in improving their “brand”, or image, in the eyes of the available talent pool, if they are to answer both the qualitative and quantitative deficiencies in human resources.

Bringing an employer brand to the attention of top talent is vital when trying to attract the most sought-after candidates and new pools of workers, and a well-run talent community will provide companies with a strong pipeline of engaged talent.

When forming a brand, companies need to think strategically about the company’s position, reputation and brand impact in the talent marketplace. Employers can create a compelling employer brand experience by defining an employee value proposition and creating the messaging tools that deliver a consistent brand experience across the employee lifecycle. (2016 TPLS)

The competition for available talent from supply chain curricula has become so intense that many companies, both on the supply and provider side, have turned to paid internships, project sponsoring and consulting assignments, and employers are also offering on-site workshop sessions, professional monitoring and online courses to improve both their brand and workers’ skill levels. (2016 TPLS)

So it is that the evolution of the 3PL industry, along with shortages of appropriate talent, have created a perfect storm of opportunity for those who might consider a professional career within what is most likely to be a very long cycle of need for the best and brightest.

Under such circumstances, hopefully the reader can easily see why I find mentoring young people in such a promising direction to be both responsible and compelling. I can also now breathe a little easier that my “off the cuff” advice to several young persons, to include my son, has been validated beyond subjective pride in the industry I have so enjoyed for more than 35 years. Dads do sometimes get it right…even if by later shoring up generalisms, or seat of pants opinions.

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