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Retail Buying Shifts to Online Boosting Logistics Sector Hiring

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The latest U.S. Labor Department data on sector employment shows a continued shift in retail jobs from brick-and-mortar stores to online shopping.

Retail industry employment declined by 18,000 jobs in October, while employment in the transportation and warehousing sector rose by 8,400 jobs from September, the U.S. Labor Department reported.

The rapid rise of e-commerce saw warehouse operators, parcel carriers and other transportation firms add workers last month to handle the increased flow of goods for the holiday shopping season.

Courier and messenger firms added about 5,700 jobs in October, continuing a six-month expansion, as big employers like United Parcel Service and FedEx Corp. ramped up seasonal hiring. UPS expects to ship 750 million packages this holiday season, an increase of 5.6% from last year.

In reporting third quarter financial results last month, UPS said its supply chain and freight segment produced double-digit revenue growth and near double-digit operating profit expansion, UPS Freight increased less-than-truckload revenue 9.3% on tonnage growth of 5.5%, as total segment operating profit improved 9.7% to $226 million.

[Read more about FedEx and e-commerce: FedEx Buys Research Firm to Upgrade Operations for E-Commerce]

Similarly, Old Dominion Freight Line Inc., one of the largest carriers that hauls goods for multiple customers on each truck, added 762 workers and raised wages in the third quarter. The company saw double-digit growth in shipping volume in each of the first three weeks of October.

The Labor report showed the warehousing and storage sector, including the expanding field of fulfillment centers, added 3,100 jobs in October. The industry has grown rapidly as Amazon.com Inc. and others set up vast distribution centers. Amazon.com plans to hire about 120,000 seasonal workers in more than 30 states.

Amazon recently announced plans to open its fourth Maryland fulfillment facility in Baltimore’s Sparrows Point, which will create more than 1,500 full-time positions. Amazon currently employs more than 5,000 associates at its sorting and fulfillment centers in Baltimore and fulfillment center in North East, Maryland. Amazon said it plans to open a new fulfillment center in Macon, Georgia that will create more than 500 new full-time jobs. The company currently has more than 2,000 full-time employees in the state at three fulfillment centers located in Braselton, Lithia Springs and Union City, Georgia.

While overall retail jobs were down in October, with declines in clothing and accessories stores, general merchandisers and department stores, Jack Kleinhenz, chief economist at the National Retail Federation, said, “There continues to be a significant number of job openings in retail, so the drop could reflect a difficulty in hiring given the low unemployment rate. Also keep in mind that retailers are on the verge of adding half a million or more temporary workers for the holiday season.”

Last month, Walmart Stores Inc. said it would slow the growth of U.S. store openings in the next fiscal year, in part to free up cash to invest in its e-commerce segment, while Target is opening smaller stores in cities and investing more to expand its delivery options, such as next-day delivery of a box’s worth of household essentials for a flat fee.

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