SEED Plan for Transportation and Warehousing

This article explores various functions of the companies in the Transportation and Warehousing sector along with the recent employment and salary trends.

It is a known fact that the cycle of demand and supply drives the economy. But there is always a large geographical distance to cover between the site of production of the products in demand and the final destination of supply. This area is fulfilled by the Transportation and Warehousing sector. This market is growing at a good pace and expected to be valued at $86.41 billion by 2024. This sector covers all the services that involve transportation of goods and people along with scientific storage of raw materials and finished goods.

This article explores various functions of the companies in the Transportation and Warehousing sector along with the recent employment and salary trends. Employees being the backbone of this sector, this article will also look into the advantage of employee benefit schemes such as ESOP and how Eqvista’s SEED plan suits the same.

Transportation and Warehousing Companies

For a consumer, buying a product simply involves a trip to the nearest store. However, if we give this a thought, how did this product reach the store? How is the availability of this product ensured at all times? Where was this manufactured? How did that company procure the necessary raw materials? The Transportation and Warehousing sector is responsible for the planning and execution of all these processes.

What Transportation and Warehousing companies do? Why are they important?

The Transportation industry includes companies that are responsible for ferrying cargo and people. This involves not just the freight but all other auxiliary services associated with the entire process. Roadways, railways, airways, waterways, and pipelines are all various mediums of large-scale transport. Meanwhile, warehousing is all about the storage of raw materials and finished goods and acts as a stock buffer in the demand and supply loop. The Transportation and Warehousing sector is quite labor-intensive and expected to post job growth of 1.4% in the next decade.

Without the Transportation and Warehousing sector, the entire supply chain will cease to exist. Raw materials, finished products, and the people associated with these services will not reach their destination on time thus causing a breakdown in the market. The most important functions of this sector are:

  • Large scale inventory management
  • Storage and distribution hub for retailers and distributors
  • Helps reduce transportations costs for the company
  • Helps maintain buffer stock in case of fluctuating markets

Industry Forecast

The forecast for the Transportation and Warehousing industries remain uncertain, as many of the deciding factors for the industry depend on how fast the world can recover from the effects of COVID-19. Hubinternational predicted a 5-15% increase in commercial auto coverage in 2021, while an industry forecast by Interindustry Economic Research Fund predicts an increase of 16.9% in the transportation industry. However this industry still remains unclear, and any forecast also considers the major drop in business during 2020.

Types of Transportation and Warehousing

As one can imagine, managing the demands of a nation’s population is a massive task. The government and private sectors collaborate to make this work. Similarly in the Transportation and Warehousing sector, there are three broad categories of operations:

  • Private: To maintain a private Transportation and Warehousing operation, a company must be in the need to handle huge amounts of inventory and gather massive investments to operate this channel. But it is cost-effective for large companies such as retail chains to have their setup.
  • Public: These are available for the public on hire. Due to a competitive market, this type of infrastructure is regulated by the government.
    Bonded: These are specifically for imported goods. When goods cross borders into the country, they are stored in bonded warehouses until custom clearance.

Construction Industry Statistics

By number of firms:

# of employeesAverage20172016201520142013

Most of the companies in the Transportation and Warehousing industry operate with less than 10 employees. On average over five years between 2013 and 2017, 78.64% of the firms in this sector were operating with 0 – 9 employees. Companies with more than 10 employees make up only a small percentage, the ones with 500 or more employees being the least at 1.29%.

On the whole, the Transportation and Warehousing industry operates with small firms with a handful of employees.

By number of employees:

# of employeesAverage20172016201520142013

Whereas in terms of employee preference, 64.17% of the workforce in the Transportation and Warehousing industry preferred to work with firms employing more than 500 employees. The next two popular preferences were companies with 0 – 9 and 20 – 49 employees at 7.24% and 7.21% respectively. However, over five years between 2013 and 2019, all other firms displayed a decline in preference by the workforce except the large ones employing 500 or more personnel which showed a 2.35% growth.

Thus it is evident from this data that in the Transportation and Warehousing industry, employees prefer to work with large companies. Therefore these large firms should start to implement ESOPs in the Transportation and Warehousing industry to include their employees in the success of the company.

Top Jobs/ Average wages per job:

Sample SizeEmployment %Average SalaryAverage SalaryAverage Salary
All Occupations6,281,590100.00%$49,850$48,960$47,720
Transportation and Material Moving Occupations3,866,23061.55%$46,410$45,810$44,660
Motor Vehicle Operators1,786,94028.45%$45,380$44,140$42,980
Material Moving Workers1,465,68023.33%$34,850$33,580$32,310
Driver/Sales Workers and Truck Drivers1,413,94022.51%$47,890$46,860$45,850
Office and Administrative Support Occupations1,370,66021.82%$46,770$45,140$43,990
Laborers and Material Movers1,184,03018.85%$33,610$32,330$31,070
Heavy and Tractor-Trailer Truck Drivers1,076,95017.14%$47,700$46,600$45,630
Laborers and Freight, Stock, and Material Movers, Hand873,32013.90%$33,520$32,480$31,280
Material Recording, Scheduling, Dispatching, and Distributing Workers862,28013.73%$48,090$46,120$45,170
Postal Service Workers523,2108.33%$51,740$51,540$50,010
Postal Service Mail Carriers339,6405.41%$52,190$51,780$50,020
Installation, Maintenance, and Repair Occupations339,0805.40%$58,310$57,070$55,250
Light Truck Drivers319,2605.08%$49,140$48,110$47,050
Passenger Vehicle Drivers, Except Bus Drivers, Transit and Intercity283,8404.52%$34,820$35,760$34,290
Industrial Truck and Tractor Operators248,3603.95%$39,040$37,410$35,980
Air Transportation Workers226,4203.60%$104,100$101,760$95,740
Vehicle and Mobile Equipment Mechanics, Installers, and Repairers213,7903.40%$57,590$56,260$54,220
Information and Record Clerks206,2103.28%$42,520$41,210$39,520
Stockers and Order Fillers195,1503.11%$34,970$34,630$33,640
Management Occupations188,9903.01%$110,490$110,620$108,810
First-Line Supervisors of Transportation and Material Moving Workers175,1402.79%$59,650$59,300$57,750
Business and Financial Operations Occupations124,2701.98%$69,400$69,470$68,600
Flight Attendants120,0401.91%$56,270$56,680$52,720
Other Office and Administrative Support Workers109,5301.74%$37,250$36,320$35,240
Postal Service Mail Sorters, Processors, and Processing Machine Operators102,3901.63%$51,190$51,250$50,160
Business Operations Specialists101,7601.62%$68,260$68,030$67,140
Aircraft Pilots and Flight Engineers98,8601.57%$165,360$158,300$149,180
Customer Service Representatives96,4901.54%$40,040$39,490$37,360
Rail Transportation Workers95,6001.52%$67,640$64,670$63,020
Shipping, Receiving, and Inventory Clerks95,2501.52%$37,690$36,470$35,050
Dispatchers, Except Police, Fire, and Ambulance90,7801.45%$43,910$42,790$41,720
Cargo and Freight Agents87,1201.39%$47,000$46,190$44,960
Bus and Truck Mechanics and Diesel Engine Specialists87,1001.39%$48,570$47,660$46,510
Bus Drivers, Transit and Intercity79,8501.27%$38,800$37,990$36,640

The classifications for these occupations often overlap one another, so total employment size % may result in a larger number than 100% for all jobs.

This data mapped over three years for a sample size of 6,281,590 shows the prevalent trends in the most preferred jobs and their remuneration patterns in the Transportation and Warehousing industry. By 2019 there was a 5% growth in average salaries across all job profiles. The top five sought after jobs were:

  • Transportation and Material Moving Occupations
  • Motor Vehicle Operators
  • Material Moving Workers
  • Driver/Sales Workers and Truck Drivers
  • Office and Administrative Support Occupations

The Transportation and Material moving occupations provided 61.55% of the employment in 2019. In 2017 the average salary of this job was $44,660. By 2019, this posted a 3.92% growth and reached $46,410. The next four most preferred jobs were close in terms of employability and increasing salary trends. Here is a snapshot:

Job Profile% Employment in 2019Average salary in 2016Average salary in 2019% growth in average salaries
Motor Vehicle Operators28.45%$42,980$45,3805.60%
Material Moving Workers23.33%$32,310$34,8508%
Driver/Sales Workers and Truck Drivers22.51%$45,850$47,8904.45%
Office and Administrative Support Occupations21.82%$43,990$46,7706.32%

All other profiles in the Transportations and Warehousing industry posted positive growth. However, the ones which stood out were Rail Transportation Workers, Aircraft Pilots and Flight Engineers, Flight Attendants, Vehicle and Mobile Equipment Mechanics, Installers and Repairers, and Installation, Maintenance, and Repair Occupations. Over the three years between 2017 and 2019, these jobs posted a phenomenal growth of 7-9% in average salaries.

ESOP in Transportation and Warehousing

Equity is a powerful employee retention tool. Employee Stock Option Plans or ESOPs are a scheme specifically designed to offer company stocks to permanent employees. With this strategy, employees feel motivated to proactively contribute as they are part owners and have a share in company profits apart from fixed salaries. The National Centre for Employee Ownership (NCEO) states that ESOPs have the power to significantly reduce turnover and is strongly related to how employees perceive their companies as a ‘good place to work’.

Why is offering ESOP a better option for Transportation and Warehousing companies?

Apart from other non-traveling profiles, ‘Drivers’ are the lifeline of the Transportation and Warehousing sector. Considering the long hours and long-distance travels this profile demands, the job satisfaction of ‘Drivers’ has become synonymous with company reputation and customer satisfaction. ESOP is a reliable employee benefit plan that helps retain skilled resources.

Once a ‘Driver’ is invested in an ESOP plan, they find value in their contribution and stay motivated to serve the company eyeing their retirement benefits. Stock ownership is profitable in the long run as stock prices accelerate over the years resulting in a massive retirement benefit in comparison to sporadic employee incentives.

Besides, ESOP is a good way to handover company legacy to the next generation of skilled managers. It also provides massive tax advantages both for the company and the employee. ESOP also allows flexibility in structuring transactions. The owner can either choose to sell the entire company to an ESOP or a part of it.

SEED by Eqvista – Plan for Transportation and Warehousing

As mentioned earlier, the Transportation and Warehousing sector has companies operated both by the private and public sectors. Thus company size ranges from small startups to large established ones. SEED by Eqvista is a unique ESOP offering that has equity rewards provisions for companies at all stages of growth. Eqvista with years of experience in equity management across diverse sectors has designed this plan to include all equity needs of companies.

SEED or the Simple Employee Equity Development plan proposes 100% time based vesting for the entry-level staff of all companies. As the seniority grows, tune based can be offered in combination with milestone based vesting in varying percentages. The suggested vesting plan is 3 – 4 years with a 1 year cliff period. In the case of milestone schedules, it could be 3 – 6 years. The employee pool is suggested to be 10% for startups and can be extended to 20% depending on the company size. SEED is a functional guideline for labor-intensive industries and can be useful to create ESOP in transportation industries.

Ready to Start Using Eqvista’s SEED plans for your company?

The Transportation and Warehousing sector involves large amounts of human resources and financial investments. As a result equity distribution is integral to the proper functioning of this sector. Equity distribution at such a large scale is better to be automated than being handled manually. Eqvista is the leader in equity distribution software and a reliable option for a company’s equity needs starting with share issuance to dividend payouts.

Check out our entire range of services. These include our cap table software and 409a valuation for companies. For further information reach us today.

Interested in issuing & managing shares?

If you want to start issuing and managing shares, Try out our Eqvista App, it is free and all online!