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By Jennifer Smith 

Hiring in the transportation and warehousing sector soared in October as employers heading into peak shipping season added 24,800 jobs, the biggest monthly gain since December and accounting for nearly 10% of total U.S. job growth.

Parcel-delivery firms that bring packages to homes and business added 7,600 positions last month, as did warehousing and storage companies, according to preliminary figures the Labor Department released Friday.

The gains come as surging e-commerce sales are expected to test logistics networks' capacity this holiday season. Warehouse operations have expanded dramatically in recent years as Amazon.com Inc. and other companies open sprawling, labor-intensive fulfillment centers where workers pick, pack and ship online purchases. This year, consumers are expected to spend $124.1 billion online in November and December, up 14.8% from during the same two-month period in 2017, according to software company Adobe Systems Inc.

XPO Logistics Inc., one of the largest logistics and transportation providers in the U.S., said this week that strong e-commerce demand helped drive an 18% jump in its third-quarter logistics segment revenue in North America. The Greenwich, Conn.-based company is also ramping up a shared-space warehouse network to meet demand for flexible distribution, including additional holiday capacity.

"Most are e-commerce and retail customers. We also have some manufacturers, and expect volumes to accelerate into peak," XPO Chief Executive Brad Jacobs said in an interview.

United Parcel Service Inc., the largest private U.S. package-delivery firm, is adding 100,000 seasonal workers and building out more automated sorting hubs as it prepares for an expected 6.7% boost in package volume between Thanksgiving and Christmas.

Overall the U.S. economy added 250,000 positions last month, while the unemployment rate held steady at 3.7%, a 49-year low. Factory payrolls grew by 32,000, led by gains in the transportation-equipment sector, which added 10,200 jobs as truck manufacturers work to address a nearly 11-month backlog, though factory activity slowed in October.

Wages grew 3.1% year-over-year as employers raise pay amid steep competition for workers. Amazon.com Inc.'s new $15 minimum hourly wage went into effect Thursday, raising the stakes for warehouse operators that are already dangling raises and other incentives to attract scarce employees.

Hiring at trucking companies slowed after a two-month period of strong gains, with carriers adding 2,400 jobs in October. Fleet payrolls have grown by 36,000 positions over the past 12 months as companies add capacity to meet strong freight demand, though many report difficulty recruiting and retaining drivers.

This year Pitt Ohio, a less-than-truckload carrier based in Pittsburgh, Penn., began an apprentice program to bring recent high-school graduates into the trucking firm before they can qualify for an interstate commercial driver's license.

The company raised driver wages 2% in May and another 2% in October. "We get lots of responses even with the job market [so] tight, but a lot of those aren't qualified because of their driving records" and other reasons, said Chief Executive Chuck Hammel.

--Paul Page contributed to this article.

Write to Jennifer Smith at jennifer.smith@wsj.com

(END) Dow Jones Newswires

November 02, 2018 14:59 ET (18:59 GMT)

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