Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
While voters are still awaiting firm results on election returns from yesterday’s presidential race, providers of ride-hailing apps and meal-delivery platforms are celebrating a different electoral victory, as California citizens approved a “Proposition 22” ballot measure that allows employers to compensate their gig-economy drivers as independent contractors, not full-time employees.
Opponents of the measure had argued that gig-economy employers such as the ride-hailing giants Uber and Lyft should be required to provide their drivers with benefits and protections including paid sick leave and unemployment insurance.
That sentiment was recently echoed by the California state legislature, which in 2019 approved Assembly Bill 5 (AB5), drafted to make it harder for employers to qualify employees like truck and cab drivers as independent contractors. At the time, that bill was applauded by union groups like the International Brotherhood of Teamsters, which said it would block companies from dodging the cost of providing benefits like minimum wage guarantees. However, a federal judge in January issued a temporary stay on AB5, to the delight of industry groups like the California Trucking Association, which said the regulation would have raised their operating costs and triggered tighter capacity in the freight sector.
According to public reports, the passage of Prop 22 now marks a defeat for labor unions and could undermine the recent appeals court decision that had sided with California’s state Attorney General Xavier Becerra, who had sued several companies for violating AB5.
The “Prop 22” rule opens a new chapter in the long-running debate, although it is focused on ride hailing apps as opposed to freight carriers. Despite that distinction, there is some overlap between the two sectors, since Uber and Lyft were joined in their support by firms like DoorDash, Postmates, and Instacart, whose drivers often deliver meals and parcels, as well as passengers.
Together, that coalition of app-based employers drafted Prop 22 as a compromise position, allowing employers to avoid reclassifying drivers as employees, but still requiring them to provide certain benefits, according to a statement released today by the Indianapolis-based transportation law firm Scopelitis, Garvin, Light, Hanson & Feary, P.C. For example, Prop 22 guarantees drivers minimum earnings (based off of 120% of the local minimum wage), full payment of tips to drivers, per-mile compensation for the use of the vehicle, a healthcare subsidy based on the average weekly amount of hours of “engaged time” a driver performs, and occupational accident coverage, Scopelitis said.
“The direct impact of Prop 22 is limited to true gig economy operations and does not translate to a larger win for the transportation industry. However, this victory is another indication of the overreach of AB5 and the value that voters place in being able to perform work as independent contractors,” Scopelitis said. “The gig economy companies have faced heavy pressure from the state (both legislatively and in court) to reclassify drivers as employees and in response have mounted the most expensive ballot initiative in the state’s history. This compromise marks the beginning of an alternate worker classification system (sometimes termed ‘dependent contractors') within the United States.”
Following the ballot measure’s passage, San Francisco-based Lyft said the compromise would provide drivers with flexibility, guaranteed minimum earnings, new healthcare benefits, and more insurance coverage. “Millions of people voted for Prop 22 to redefine what independent work looks like for drivers. Now that it has passed, we will be able to give drivers the new benefits they want and keep rideshare available for people around the state,” Lyft said in the statement.
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 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.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.