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Home » Dollar-an-Hour Wage Increase Can Add $1M to DC Operation Costs, Study Says

Dollar-an-Hour Wage Increase Can Add $1M to DC Operation Costs, Study Says

March 22, 2016
Wall Street Journal

In a recent report, analysts with real-estate brokerage firm CBRE Inc. estimated a $1 increase in average hourly wages could add more than $1m in annual costs to a warehouse operation employing 500 people. For e-commerce facilities, which can be two-to-four times more labor-intensive than a typical warehouse - especially during the busy holiday shipping season - the impact could be even greater, the report said.

The growth of e-commerce is fueling greater demand for distribution centers close to densely-populated areas as retailers face increasing pressure to get goods to customers faster. But urban population centers also are where local efforts to raise minimum wages are the strongest, said Spencer Levy, CBRE’s head of research in the Americas.

“E-commerce and other businesses that are tied to these dense locations will see the greatest impacts” from rising wages, Levy said.

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KEYWORDS All Warehouse Services Business Strategy Alignment distribution center operations E-Commerce Fulfillment Global Supply Chain Management HR & Labor Management Labor Management Logistics Logistics Outsourcing supply chain jobs supply chain management: human resource and labor management Technology Transportation & Distribution Transportation Management Wall Street Journal Warehouse Management Systems warehouse workers
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