Joseph W. Kane
Fellow - Brookings Metro
Senior Fellow - Brookings Metro
From the beginning, COVID-19 has disrupted how people and places get goods. The immediate disruptions were obvious and widespread: hand sanitizer in short supply, nonexistent toilet paper, and empty grocery store shelves. The next disruptions, however, are just beginning to unfold as businesses, consumers, shippers, and others adapt to new demands throughout our global supply chains and infrastructure networks.
It will be hard to predict where and when COVID-19 will impact supply chains. These networks are complex, interwoven, and responsible for moving an enormous volume and variety of international and domestic goods. It’s difficult to gauge their ability to adapt quickly because we don’t know how demand and supply may transform, especially if specific metro areas or the entire country falls into a recession. How many more people will shop for food and other goods online, leading to heightened deliveries and major hiring by companies like Amazon? Could foreign products essential to manufacturing fail to reach our shores, similar to the loss of trans-Atlantic passenger flights? There are simply too many variables to control for.
But amidst this uncertainty, two points are clear: 1) Some places are more exposed than others when it comes to managing the movement of goods, and 2) millions of workers in those places will directly feel COVID-19’s effects. National and local leaders need to closely monitor impacts, while also helping people who have lost their jobs and facilitating new hires in industries with heightened demand.
Collectively, there are 9.2 million trade and logistics workers across the country—truckers, material movers, cargo agents, and other occupations directly involved in moving goods—that form the backbone of our infrastructure workforce. Although workers in metro areas with large ports such as Los Angeles and New York come to mind, many others are concentrated in smaller coastal and inland shipping hubs. Some of these workers are already losing their jobs, but new opportunities are emerging, too, including Amazon’s announcement to fill 100,000 more warehouse positions.
The country’s 192 largest, very large, and midsized metro areas combine to employ 7.2 million of these workers, or 78% of the U.S. total. The 10 largest metro areas alone employ 2.5 million trade and logistics workers. Again, many of them are the essential drivers, laborers, and technicians who keep goods moving through our ports, warehouses, and other facilities. They also include millions of administrative and support workers who process orders and keep operations running smoothly.
Note: Trade and logistics employment is based on occupations and industries involved in moving goods. For more information, see previous Brookings research on infrastructure jobs.
Note: The 192 metro areas shown each have populations greater than 250,000. Poughkeepsie, N.Y. is excluded due to data limitations.
But it’s not just the biggest markets that matter. The trade and logistics industry actually carries greater economic weight in some less-large and midsized markets, leaving them more exposed to shocks such as COVID-19. While trade and logistics workers make up 6.3% of the total U.S. workforce—or more than one of every 20 workers—they account for a much higher share in distribution hubs such as Memphis, Tenn. (14.2%), Stockton, Calif. (13.3%), and Allentown, Pa. (11.1%). Other land border crossings and ports of entry stand out as well, including Laredo, Texas (12.1%) and Savannah, Ga. (10.4%). Finally, there are several metro areas with a large global retail and manufacturing presence, including Fayetteville, Ark. (10.3%) and Spartanburg, S.C. (9.7%).
It’s important to acknowledge how these jobs fill an invaluable niche in each local labor market. From transportation departments to ports to warehousing and storage facilities, industries in this sector offer outsized opportunities in the skilled trades and other technical fields with transferrable skillsets. These workers can also earn higher pay relative to lower formal educational barriers to entry, which provides vital support across all income levels. Many of these workers may be unionized too; transportation and material moving workers have among the highest rates of unionization nationally.
The livelihood of all these workers will depend on how COVID-19 impacts trade. Which activities will effectively shutter, which will expand, and how will these changes alter the movement of goods? How will a national or local recession start to impact long-range durable goods orders and other supply chain components? Will the shift away from office work lead to a net decrease in courier and express delivery services? Statistical indicators will be essential, and it will demand cobbling together disparate sources—national and local unemployment data, container volumes at ports, truck miles traveled, local diesel fuel sales—to get a sense for what’s happening on the ground.
Policymakers, along with other infrastructure and economic development leaders, must track these patterns closely. Unlike restaurants, hotels, and other hospitality industries, it’s likely that trade and logistics will see a mix of massive layoffs, hiring sprees, and everything in between. Leaders should use their entire policy toolkit—from unemployment benefits to job placement services—to manage such uncertainty.
Fortunately for the industry and its workers, social distancing will not preclude the need to eat, to shop, and, for many businesses, to keep operating. We just can’t lose sight of all the people that get those goods to market, or overlook any interventions that can help them—and our economy—get through this uncertain time.