EnThe situation in U.S. logistics employment worsened markedly in late 2019. Total U.S. non-farm payrolls rose by just 1.40% year over year in December, the slowest rate since Jul. 2011, Panjiva analysis of official data shows.
The logistics sector fared worse with a 1.0% growth being the slowest rate since Sept 2010. Only two of five sectors saw improved growth – warehousing and logistics – while the rollout of precision rail-roading led to a 9.6% slump in rail employment. Trucking also saw a decline of 0.1%, the first slip since the mini-recession of mid-2016.
Source: Panjiva
Waterborne employment’s steady downturn continued for a sixth month out of the past seven with a 1.9% drop. At 63,700 payrolls that was the lowest in absolute terms since Jun. 2012.
There’s a clear link to the downturn in seaborne shipping. Panjiva’s data shows seaborne imports to U.S. ports fell by 10.6% year over year in December.
In turn that decline has been due to the U.S.-China trade war, in large part. As outlined in Panjiva’s research of Jan. 9, a phase 1 deal may reduce the risks of further tariffs, but does little to alleviate existing pressures.
There’s also a risk of further cutbacks in activity. In the 2011 to Q3’19 period the average productivity of the sector – expressed as the change in average shipments less the change in average employment – improved by around 3.0% points annually.
In 4Q that figure may have dropped to an 8.0% drop as average shipments fell by 8.7% and employment only fell by 0.7%. The knockon risk is that ports and shipping firms aim to improve that ratio by cutting jobs. In turn that would increase the risk of strike action and further disruption to U.S. supply chains.
Source: Panjiva
