According to new government research, a critical labour shortage in the freight and logistics sector is set to widen from 4,700 to 18,000 workers by 2028 without immediate intervention.
Industry experts stated that unless addressed, the growing skills shortage will constrain the future growth of all sectors of New Zealand's economy.
The research commissioned by Hanga-Aro-Rau, the Manufacturing, Engineering and Logistics Workforce Development Council, found the highly fragmented logistics sector struggles to attract and retain workers and has lost thousands of employees to other industries and lucrative overseas roles over the past two years.
The report also uncovered evidence of discrimination and pay inequity within the sector, particularly creating barriers to career progression for women and Pacific peoples.
The study found while targeted training programmes have helped boost the number of Maori in higher skill level roles to 27 percent, the equivalent proportion for Pacific workers grew by 3 percent over the past decade.
The report's authors also found that the logistics workforce gap was widening faster than the manufacturing and engineering sector and that an exodus of over 4,600 workers (or 3.5 percent of the workforce) leaving the industry in the past two years was led by Generation Z (aged 15-24) and, almost a quarter (23 percent) of workers opted for opportunities offshore where wages are significantly higher.
The industry is now looking to attract gamers with the requisite skills to operate the new automation, robotic and drone technologies that are expected to be adopted.
Hanga-Aro-Rau is one of six Government-funded Workforce Development Councils (WDCs) tasked with aligning the vocational educational systems with industry needs and supporting Maori businesses and iwi development. The deputy chief executive of Hanga-Aro-Rau, Samantha McNaughton, stated that a functional freight and logistics industry underpins the growth of every sector of the economy.
Samantha McNaughton
McNaughton continued that the report identified several systemic issues facing logistics firms and called for the immediate introduction of an industry-wide strategic approach to reduce barriers to training.
"The logistics sector covers the movement of goods throughout our national and international supply chains - including order processing, inventory management and distribution across our air, sea and land ports," said McNaughton.
"This industry acts as a critical enabler and lynchpin in the economy - intersecting and supporting the growth of every other sector in some way."
The new report showed that the pandemic accelerated the adoption of automation within logistics firms as they attempted to mitigate the global impact of skilled labour shortages.
However, rather than reducing the size of the workforce, these new technologies have changed the nature of the roles within the industry, creating opportunities to grow through a more gender and culturally diverse workforce and facilitating the entry of more disabled workers into the sector for the first time.
Dom Kalasih, interim chief executive of road freight association Ia Ara Aotearoa Transporting New Zealand, stated that the growing capacity constraints in the logistics sector would ultimately lead to delays in meeting customer expectations, shortages, and price increases for consumer goods.
Dom Kalasih
As a result, the rural sector and food manufacturers would likely be among the first to see the impact of labour skills shortages.
"When you have a scenario where demand for services significantly outstrips available supply, such as that forecast for the logistics sector, then market forces will look to prioritise the allocation of resources," said Kalasih.
Those with perishable goods, such as live cattle or horticultural produce that need to get to market within a specific timeframe will likely see changes in the freight sector away from lower priority shipments to meet that demand.
There will be costs related to these changes, which will cost more every time a food product is moved to the manufacturer, wholesaler, and retailer.
Ultimately this will have a flow-on effect on the consumer's cost of goods and would also mean shipping delays for non-perishable products.
Lisa Tai, Pås Peau (Pasifika Services Group) lead at Deloitte, added that addressing the barriers to progression faced by Pacific peoples would be essential to mitigating the growing skills shortage within the industry.
Lisa Tai
Like many other sectors, it was a concern to see Pacific people poorly represented at senior and management levels within the freight and logistics industry, with many reporting a lack of clarity and information on development opportunities and career progression pathways.
"The report also shows that Pacific peoples make up an increasingly large proportion of the logistics sector and that the number of Pacific workers has grown by 48 percent over the past decade," said Tai.
Part of the industry's appeal may be that Pacific people are drawn to workplaces with existing networks and connections through community and family ties. However, more must be done to support this part of the workforce to grow into senior positions.
"Supporting Pacific peoples in the logistics sector is a key growth opportunity."
The research showed that 2,300 Pacific workers must be trained at the highest skill levels within five years to achieve equity. However, less than a third of companies have targeted Pacific initiatives to support the development of Pacific staff.
Tai continued that at least 17 Pacific nations and cultural identities were represented in New Zealand's workplaces, and many Pacific native languages were spoken in this part of the world.
"While developing Pacific-specific interventions and initiatives may be perceived as complex, the logistics industry is now facing a growing skills crisis and will need to identify new training methodologies to support better and develop the experience and skill set of Pacific workers."
Any solutions must be co-created and designed with Pacific workers.
The research will be presented at a summit on June 1st, where employers, industry stakeholders, government, and vocational education participants will collaborate on developing solutions to the sector's skills shortages and workforce development challenges.
