The U.S. transportation, distribution, and logistics (TDL) sector is grappling with a perfect storm: a shrinking talent pool and rising labor costs. A new UKG survey reveals that 79% of operations leaders say labor isn’t aligned with demand, while 35% report persistent understaffing on schedules.
Wages are climbing rapidly. Nearly 80% of TDL firms report higher labor costs over the past year, with 91% noting increased overtime. UKG’s Workforce Activity Report, which tracks over six million hourly employees, shows real hourly earnings in TDL jumped 4.8% from July 2024 to July 2025—well above the 1.4% across all frontline industries.
Labor Costs and Turnover Top Concerns
TDL leaders rank rising labor costs, inflation, geographic uncertainty, supply chain disruptions, and productivity losses as the top pressures facing their organizations. Workforce strategies are weakest at addressing shortages, even as compliance remains relatively well-managed.
Turnover continues to challenge the sector: 22% of organizations report rates above 45%, while half of TDL firms cannot fill roles within 30 days. Leaders cite a lack of qualified candidates and unpredictable scheduling as top drivers.
Transportation Leads in AI Adoption
Transportation companies are outpacing distribution and logistics in staffing, retention, and scheduling—thanks in large part to AI-driven workforce management tools. Nearly 78% of transportation organizations increased hiring over the past year, versus 51% in distribution and 46% in logistics.
AI and predictive tools are helping fill shifts and reduce absenteeism. Among transportation firms using AI planning, self-service, and labor-forecasting solutions, 64% report fewer than 10% of shifts go unfilled, compared to 40% in distribution and 29% in logistics.
“AI-driven scheduling technology is helping organizations predict what’s ahead — even in periods of high uncertainty — to ensure they’re staffed at the right levels, at the right times,” said Robert O’Dwyer, logistics industry principal at UKG.
HR and Operations Collaboration Is Key
UKG’s report emphasizes that pairing HR strategy with operations leadership—and deploying AI tools—can help TDL companies manage labor costs, boost engagement, and maintain compliance. Data-driven workforce management empowers leaders to anticipate hidden labor expenses like overtime or prolonged hiring gaps while giving employees more control and flexibility over schedules.
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