Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The chairman of the Senate Commerce Committee said he will not support legislation that contains language reclassifying the air unit of FedEx Corp. under a different set of labor laws, comments that deal a blow to organized labor, FedEx's chief rival, and his counterpart in the House of Representatives—all of whom have been pushing aggressively for the change.
Sen. Jay Rockefeller (D-W.Va.) told Dow Jones Newswires late Thursday that there isn't enough Senate support to assure passage of the controversial provision and make it part of legislation to fund operations of the Federal Aviation Administration (FAA). The language, which would require most employees at FedEx Express to be governed by the National Labor Relations Act (NLRA) rather than the current Railway Labor Act (RLA), is contained in the version of the FAA funding bill passed last year by the House of Representatives. It is not included in the version that subsequently passed in the Senate.
"I know perfectly well if I put that in the bill ... it's not going to pass," Rockefeller was quoted by Dow Jones as saying. Rockefeller told the news service that he personally supports the provision.
Rockefeller's views are significant in that he chairs the Senate committee where the FAA funding bill originated. He is also a member of the political party considered to be more sympathetic to the agenda of organized labor. The Teamsters union has been a vocal proponent of the reclassification.
The controversial language, originally proposed in the House by Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, would require all FedEx employees except for pilots and aircraft mechanics to be covered under the NLRA, a law that governs labor-management relations in virtually every U.S. industry, including trucking. FedEx has been treated as an airline since its inception, and its express operations are governed by the RLA, which covers workers in the airline and railroad industries.
The reclassification would enable FedEx Express workers to organize at the local level instead of nationally as one bargaining unit. The change would make it easier to unionize portions of FedEx Express's workforce, which is a key factor in the Teamsters' support of the provision. Teamster officials did not return an e-mail request for comment.
Jim Berard, the chief spokesman for the House committee, said Oberstar and Rockefeller met on June 16 to discuss the FAA funding legislation. However, Oberstar did not disclose whether Rockefeller discussed the FedEx provision, according to Berard.
Up-Hill battle?
Despite yesterday's setback, there are no indications Oberstar is backing off from the fight. The two versions of the FAA funding bill are currently being reconciled by House-Senate conferees, with a final version expected sometime around July 4. Berard said that Oberstar will try to get the provision included in the reconciled version, and that his hand will not be forced by the possibility of a filibuster—a procedural tactic to block a vote—by Republican Senators Lamar Alexander and Bob Corker, both from FedEx's home state of Tennessee.
"Oberstar is not going to be deterred by threats from the Senate," Berard said.
Resistance from the Senate may not be Oberstar's only challenge, however. At this time, House support for the Oberstar measure does not appear to be unanimous. Rep. John L. Mica (R-Fla.), the committee's ranking member, was quoted April 4 on the C-Span television network as saying that "many in the House opposed [the provision] on both sides of the aisle. Let's take the controversial things and put them aside and move forward with this bill."
Mica's comments may reflect some lawmakers' concerns that the FedEx provision jeopardizes the passage of a "clean" FAA long-term funding bill and is preventing the federal government from moving ahead on appropriating badly needed funds to modernize the nation's air traffic control system.
Long-standing dispute
The labor issue has long been a source of controversy in the industry. UPS Inc., FedEx's chief competitor, supports the provision, arguing that workers like drivers or sorters who have nothing to do with airline operations should not be covered under a labor law reserved for rail and air carriers. UPS's own operations are covered under the NLRA; in the early 1990s, the Atlanta-based giant sought its own reclassification under the RLA, but its request was rejected by both the National Labor Relations Board—which oversees the NLRA—and then by a federal appeals court.
FedEx opposes any change to its labor classification, saying the courts have ruled that its air and ground operations are part of one fully synchronized airline, and that one could not exist without the other.
The Memphis-based company has warned that any local work stoppages could have an adverse ripple effect across its entire system, compromising the reliability of its delivery network and forcing it to spend billions of dollars to implement contingency plans, costs that would ultimately be borne by shippers and consumers.
FedEx Chairman and CEO Frederick W. Smith, who has little tolerance for organized labor, has made this a "line in the sand" issue. He has threatened to withdraw a multibillion dollar order for as many as 30 Boeing 777 freighters should the final bill contain language requiring the change in labor classification.
A question of equity
Meanwhile, the debate over the FedEx provision has extended beyond the transportation and congressional realms. The Leadership Conference on Civil and Human Rights, a group co-founded in 1950 by the legendary black labor leader A. Philip Randolph, has issued a report sharply critical of the status quo, saying it continues to deny FedEx Express employees their rights to organize.
In the report, titled "Railroaded Out of Their Rights," the group said, "what is at stake here is not simply the technicalities of federal labor law or competition between FedEx Express and other package-delivery companies. The issue is about equity—the right of almost 100,000 FedEx Express employees to be treated fairly and to have the same opportunity" as other express companies to seek appropriate union representation.
Maggie Kao, a spokeswoman for the group, said it has long-standing ties with organized labor. She added, however, that the report was produced with no input from any trade union or corporation.
This is not the first time the group has crossed swords with FedEx. A report released in 2009 attacked FedEx's policy of treating drivers at its FedEx Ground parcel unit as independent contractors, a strategy that the group charged excludes those workers from coverage under labor and antidiscrimination laws.
FedEx has been in legal and tax battles for years over whether its ground parcel drivers should be considered company employees or independent contractors.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.