Workers Make Their Voices Heard in 2022

Date: Tuesday, January 3, 2023
Source: Sourcing Journal

Record carrier profits born out of the pandemic was more than just a headline in 2022.

The robust earnings served as the additional kerosene thrown on an already smoldering and overworked logistics workforce whose voices grew louder as the year wore on. That push and pull between employers and labor was seen across the transportation industry this year, from the nail-biting contract negotiations for the nation’s rail system or West Coast ports and all the way over to last mile delivery drivers and warehouse employees.

Worker demands were trending in 2022.

What some saw as black-and-white issues—related to, for example, pay increases or sick time—others said were far more nuanced.

“When you’re having negotiations between labor and management, it certainly helps if everybody agrees on how big is the pie and what are you splitting? And what measure are you using, even in terms of stock price level,” said Phil Levy earlier this month during a webinar hosted by digital freight forwarder Flexport, where he serves as chief economist.

Nowhere is the shifting landscape more apparent than in ocean freight where carriers, who were not too long ago seeing record profits, are now watching rates plummet as the pendulum swings in favor of shippers.

“I think the fact that there’s so much uncertainty that you’re seeing some companies that did very, very well over the last two years, but are facing very tough times going into the future. And we’ve seen some [ocean] carriers in this position,” Levy said. “It leads to where one side says the pie is huge and the other side says the pie is small. And then, for all of them, it’s well if you do a 5 percent pay increase is that above or below inflation? Are you getting a raise or a pay cut?”

The answer clearly depends on where one sits.

Logistics Workers Find a Voice

Discontent among Amazon’s warehouse ranks received a big shot in the arm in April when the Amazon Labor Union (ALU) successfully unionized workers in Staten Island, leading to questions of whether a major labor movement was underway within the company.

The vote marked the first group of U.S. Amazon employees to unionize. Although, Amazon has continued to challenge the vote and has also repeatedly stressed through spokespeople its stance that “we don’t think unions are the best answer for our workforce and our focus remains on working directly with our team,” one spokesman had told Sourcing Journal in September.

The company that same month said it would bump average hourly pay for its fulfillment and transportation workers from $18 per hour to $19 per hour, a move criticized by some.

“Workers are demanding a $5 increase and, expectedly, feel insulted by this announcement,” a spokesperson for the Warehouse Worker Resource Center, a non-profit established to support warehouse workers in California’s Inland Empire, told Sourcing Journal the day of the company’s announcement on wages.

Workers at the company’s air hub in San Bernardino, Calif., known as KSBD internally, had been urging Amazon for pay increases, enhanced safety measures—particularly during sweltering heat waves felt in the inland region—and an end to what it said were retaliatory moves by the company.

Similar demands were made by employees at other facilities and the discontent bubbled over into several staged walkouts in facilities such as Stone Mountain and Buford in Georgia; Joliet, Ill.; and the San Bernardino air hub in October. The efforts coincided with the company’s Prime sale as workers called for higher pay and better working conditions.

While much of the unionization efforts and petitioning has largely been handled by the workers who have leveraged social media, the 119-year-old Teamsters union joined the conversation in September with the launch of the Amazon Division, formed specifically to back the e-commerce company’s logistics employees.

The union clearly has skin already in the game, representing UPS drivers who deliver for Amazon and have a contract set to expire Aug. 1 of next year. The Teamsters made it clear they would be pushing for better wages and benefits.

“We won’t extend negotiations by a single day,” Teamsters general president Sean O’Brien said in August. “We’ll either have a signed agreement that day or be hitting the pavement.”

Rival FedEx saw a similar wave of unease hit some of its drivers earlier this year, led by the vocal Spencer Patton. The former contractor attempted to unite logistics workers under the Trade Association for Logistics Professionals (TALP), formed in August. The group aimed to serve as muscle in attempting to push FedEx to renegotiate contracts on better terms and change up some of its business practices.

The effort fizzled after FedEx sued Patton in Tennessee district court, with TALP abruptly folding in November by telling former members “better options exist” in creating an “effective dialogue” with FedEx.

Off the Rails

One labor situation whose ending was far from abrupt in 2022 was the rail negotiations.

The year saw multiple threats of a nationwide strike as a multi-year negotiation process was prolonged, partially due to the complexity of who was involved: a dozen railroad labor unions, some 115,000 workers and the country’s Class 1 carriers.

The drawn-out process to hammer out a 2020 through 2024 contract involved 11th-hour deals, nail biting across shipper groups and, ultimately, Congressional intervention.

The passage of legislation this month forced workers who had rejected tentative agreements with the carriers to accept those deals. At issue was paid sick time off as some unions’ members sought to go back to the negotiating table. However, carriers turned the idea of further negotiations away.

The legislation, which did not address the additional request of sick time, put an end to the possibility of a rail shutdown and any further disruption to a still fragile supply chain.

“I think a railroad strike at this moment would almost certainly cause a really severe recession in the United States,” Flexport founder and co-CEO Ryan Petersen said earlier this month during a talk reflecting on the year. “Something like 40 percent of all the goods is moved by rail and if you don’t have that, there’s not enough trucks to make up for it.”

The fallout from the contract forced upon some workers led to the announced retirement of Dennis Pierce from the Brotherhood of Locomotive Engineers and Trainmen—one of the largest unions at the negotiating table with 28,000 members—at the end of this year. Pierce announced his retirement after losing the election for national president to Edward Hall this month.

West Coast Stalemate

Shippers may have breathed a sigh of relief with the rail negotiations now concluded, but concerns remain over the outcome of the West Coast dockworkers contract.

While employers and the union representing workers, the International Longshore and Warehouse Union (ILWU), have repeatedly maintained their stance that there would be no disruptions to cargo movement, workers have now been without a contract since July 1.

One look at the ports of Los Angeles and Long Beach today paints an even clearer picture of what the ongoing talks have meant for trade.

The neighboring ports said Friday they would end on Jan. 24 consideration of a container dwell fee that was never imposed, citing a 92 percent decline in the amount of long-dwelling containers sitting on the docks.

The fee was originally floated in October of 2021 in response to the glut of cargo sitting at the ports as a result of the influx of imports during the pandemic. With the import slowdown now in full effect and shippers still routing cargo to alternative ports as they wait out negotiations between the ILWU and Pacific Maritime Association (PMA), scrapping the fee seemed a foregone conclusion.

“I said when we launched this program that I hoped we would never collect a dime because that would mean that containers were moving off our docks. And that’s exactly what occurred,” Port of Los Angeles executive director Gene Seroka said after the ports’ announced the end of the dwell fee program.

Instead, Seroka and his counterpart at the Port of Long Beach, executive director Mario Cordero, now face business being lost to the East and Gulf coast ports as a new reality emerged among some shippers this year: they have options outside of the West Coast and it’s giving way to the possibility of new dynamics in trade in the coming years.

“I think one of the interesting byproducts of the last two years is the dependence on the West Coast,” Vaughn Moore, executive chair and CEO of AIT Worldwide Logistics, told Sourcing Journal. “The West Coast ports, they do these strikes and they really cause quite the hiccup at times, and I understand they have a point. But the East Coast ports have caught up with money, technology and personnel that they are really now robust, well-performing players in the industry where the West Coast is not your only choice now. And I think that’s something to watch.”


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