It’s not surprising the top two issues facing the horticulture industry are labor and transportation, according to the the 2019 Top 100 Growers survey. These were the same two issues that topped the concerns of last year’s survey respondents.
By all accounts — and a quick Google search — most manufacturing industries are dealing with the same things. What also shouldn’t be surprising is 85 percent of the respondents said they would be raising prices for plants they offer to offset these increasing costs.
Purchasing annuals can quickly go from a staple of spring gardening to a luxury item if prices rise too high too quickly. “Why do I keep buying these petunias every year when I can just plant a couple of azaleas and be done with it?”
As ominous as that sounds, raising prices was mentioned by growers in only two paragraphs in the entire 11-page 2019 Top 100 Growers section of Greenhouse Grower magazine’s May issue. From most of the commentary and statistics, it looks like growers are looking to cut costs and get lean as their major focus.
Let’s take a look at how labor and transportation are affecting the 2019 Top 100 Growers and how technology can help the entire horticulture industry.
How labor is affecting the 2019 Top 100 Growers
It’s not surprising the top five issues affecting the 2019 Top 100 Growers survey respondents are similar to last year’s results, according to Greenhouse Grower. It’s also not surprising that the top two issues have to do with labor.
Labor costs were the No. 1 management concern for the 2019 Top 100 Growers survey respondents, with 79 percent checking the box for this issue. The next highest concern was availability of skilled labor, which checked in at 67 percent. The introduction to these statistics gives a look into where these two issues merge together.
The growers surveyed seem to think emerging horticulture markets, such as hydroponic vegetables or cannabis, will have an affect on labor within the ornamental markets. This year’s survey shows 45 percent of growers think emerging markets are taking away their labor or will happen soon.
In the recent past, immigration issues and the economy were the major factors hurting the labor force in the ornamental horticulture industry. Now the economy is rebounding and government regulation of immigration is stabilizing, skilled laborers who may have been unemployed until recently now have options instead of picking whatever’s available.
By their vary nature, skilled labor positions at hydroponic vegetable or cannabis operations need to attract the “best of the best.” All employees at these operations need to be held to the highest standards of accountability. Not only must skilled labor employees be trustworthy to handle these plants correctly; but also, they must be able to understand the complexities of this type of operation.
Today’s hydroponic and cannabis operations has technology touching every bit of it and every step in the greenhouse operation needs to be traced as per government regulations. This important work can’t be left to just any day laborer who has no loyalty to a business. Therefore, with great responsibility comes a greater pay rate, which attracts the better skilled laborers to these jobs.
So now the ornamental grower is in a position where they must increase pay rates for skilled laborers to keep up with the Joneses. Many of the 2019 Top 100 Growers are reducing staff and/or increasing automation to help balance the increased cost of labor.
How transportation is affecting the 2019 Top 100 Growers
While a smaller percentage of respondents to the 2019 Top 100 Growers survey than last year said transportation was an issue (57 percent as opposed to 71 percent in 2018), it’s still the No. 3 issue these growers say they face.
According to the American Transportation Research Institute’s Critical Issues in the Trucking Industry — 2018 survey, driver shortages are the No. 1 issue facing logistics industries. Michael Van Wingerden, who manages logistics for Metrolina Greenhouses (T-No. 5 in the 2019 Top 100 Growers), told me a few years ago a driver shortage was affecting their operations.
While there’s been some push back against the social stigma of skilled labor jobs, it’s still going to take some time for numbers to build back up in industries like transportation. Until then, growers will have to get lean in their logistics operations to ship product more efficiently.
There are several areas where growers can improve their logistics. First, growers need to make sure trucks are filled to maximum capacity to reduce the amount of trucks being used. Less trucks means less drivers to hire. Growers also can optimize truck routes to make sure drivers deliver to the maximum number of stores each trip.
How technology can help the 2019 Top 100 Growers
Many of the ways growers can help improve their labor and transportation issues is through technology. To attract more workers, whether it’s front-office personnel, greenhouse workers or drivers, online recruiting software or services can be used.
By investing in an HR product, like Sage HRMS, growers can stay on top of the changing landscape of government regulations. Whether it’s immigration reform, changing tax codes, OSHA requirements, or healthcare laws, this type of technology can help growers maintain compliance in many areas of their business. Interestingly, government regulation was the fifth-most common issue the Top 100 Growers survey respondents selected, so this would kill two birds with one stone.
To stay ahead of the game when it comes to what product to ship where, growers can utilize forecasting and replenishing software, such as the powerful DemandLink tool. With more than 50,000 points of data, DemandLink can more accurately pinpoint the variables that cause sales to go up and down than any other product on the market.
Dropping unprofitable offerings can help eliminate wasted space in the trucks for items that don’t sell. Proper forecasting can eliminate stops on routes when plants aren’t calculated to sell on a certain day or week.
To make sure you’re shipping product instead of shipping air, having a system like Scan by Cart for Grower Vertical can help make sure loadouts are done the most logical way. This can help drivers save time on the road and unloading at their stops. As for logistics, having a program like Truckstops, which helps your drivers plan the most direct and accurate route, can help reduce the number of total trucks needed to ship product.
We’re going to carry on this discussion at Cultivate’19 during our session “Shipping Air Costs Money: How Technology can Help Solve Logistics Issues,” scheduled for Saturday, July 13 from 10:15 to 11:15. We hope you’ll join us for this conversation.