About 76 million Americans that were born between 1946 and 1964, the so-called baby boomers, are reaching retirement age in increasing numbers. The resultant demographic shift will have a significant impact on the economy in general and on the Transportation industry in particular.

One segment of the aging population, truck drivers and the looming driver shortage, has been a topic of discussion for the past several years. The current economic downturn has reduced the focus on this issue. As the economy picks up, the driver shortage is almost certainly going to be a major issue in the years ahead.

The fact is that truck drivers represent only one component of the 76 million baby boomers who are set to retire. Looking at the big picture, what are some of the implications for the transportation industry?

According to Joe Coughlin, head of MIT AgeLab, a unit of the MIT Center for Transportation & Logistics, “today’s seniors are healthier than previous generations, youthful even though they are no longer young, and have a longer life expectancy.” The result is that many baby boomers will retire and will need to be replaced. “A declining birth rate is shrinking the pool of available talent,” commented Kevin Smith, senior vice president, supply chain and logistics, CVS Pharmacy. The challenge will be to:
a) find qualified replacements
b) mentor and train these replacements so they have the skills and knowledge to do the job
c) encourage baby boomers to stay longer in their current posts or to expand the length of the training period.

For some workers, 50 seems to be the “magic” age at which people are making the leap. As stated in a recent MacLean’s magazine article, “your new life begins at 50”. Many boomers plan to “re-career” in the for-profit or not for profit sectors.

One important statistic is that the world's population will grow substantially, largely as a result of the fast-growing less-developed countries. It will age significantly, too, especially in slow-growing more-developed nations. This means that the older and richer more-developed countries, such as in North America and Europe, will have the lion's share of the buying power for goods, while the less-developed will have the major share of the younger labor needed to supply them. Thus, an older, more affluent population than ever before will significantly drive the demand-side of future supply chains.

This begs several questions. What would this future demand look like? And how should supply chains change to satisfy this future demand? Who will do the work in these aged, affluent countries? One traditional answer for the developed countries has been immigration. Other parts of the solution might involve employing more older and semi-retired workers as well as the so-called “unemployables” with physical and mental disabilities.

The solutions to an aging workforce in developed countries signal the need to redesign supply chains to accommodate an older, language-challenged, and physically and mentally handicapped workforce. More automation will likely be needed in blue-collar manufacturing and distribution facilities. Trucks, especially their interiors, will need to be redesigned for older drivers. (Dr. Coughlin is already conducting research on dashboard ergonomics.)
A potential shortage of white-collar supply chain managers could be alleviated by hiring part-time semi-retired knowledge workers. Many healthy, active baby boomers will likely be interested in interim assignments and contract work.

This may not work in all cases. According to Bill Fello, managing director, Korn/Ferry International, the executive recruitment firm, the demands of the job also make it more difficult to recruit top managers who are looking to return to work. These are complex jobs and in many organizations, they “want somebody who has been in the saddle and is current with the contemporary issues.” It is not easy to stay up to date in these fast changing industries, even for someone out of the workforce for a short time.

As big an issue as this is, and will become over the coming years, many organizations have yet to address the problem of how to fill a growing number of vacant positions up and down their managerial ladder. For example, 60% of CEO’s indicate that their companies do not account for an aging workforce in their long term business plans, stated Ed Redfern, national program consultant, AARP, the Washington, DC-based nonprofit group for people who are 50 and over. In a typical company, 18% of the workforce is eligible for retirement.

These gentlemen suggest:
1. Make sure that junior managers, or the so-called “junior seniors” get the breadth of experience they will need when they get to the top.
2. Rotate these folks through multiple assignments.
3. Provide these managers with overseas experience.
4. Establish phased retirement plans that give the company time find replacements and train them properly.
5. Provide “high flyers” with attractive compensation programs so they remain with the company.

Clearly there will lots of opportunities in the transportation and logistics industry sectors for people who wish to work hard and broader their skills and experience. This will be one of the bright sides to the demographic tsunami that is unfolding.