Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Stakeholders have 45 days to comment on a Biden administration independent contractor rule that could potentially reclassify millions of workers as employees. The rule was published in the Federal Register Thursday, with the comment period extending through Monday, November 28.
The proposed rule, announced earlier this week, could affect workers in a range of industries, including trucking, which relies heavily on independent contractors. Industry experts say the move represents a step away from the independent contractor model and that employers should pay close attention to how the issue may affect their business.
“I think [the proposed rule] is designed to lean toward eliminating independent contractor businesses under what [the current administration] considers to be the more noble goal of creating a protective employment environment,” said Greg Feary, president and managing partner at law firm Scopelitis, Gargin, Light, Hanson & Feary, a nationwide practice focused on the transportation industry.
The DOL’s proposal would rescind the 2021 Independent Contractor Rule, a Trump-era policy that is viewed as favorable to classifying workers as independent contractors. The proposal would replace that rule with one that is viewed as more likely to classify workers as employees, according to Feary and others. The current policy uses a five-factor test for employers to determine whether a worker should be classified as an employee or an independent contractor, with two factors receiving greater weight: the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss based on personal initiative or investment. The new rule proposes a six-pronged test with factors weighed equally, essentially loosening classification guidelines and favoring employee status, experts say.
Industry groups such as the American Trucking Associations (ATA), the national trade group representing the trucking industry, and the Owner-Operator Independent Drivers Association (OOIDA), which represents small businesses and professional truck drivers, are still reviewing the 184-page proposal, but expressed concerns this week over the government’s efforts to undo the existing rule.
“ATA is reviewing the new proposed rule and looks forward to providing feedback to the Department, but we are disappointed this proposal seeks to undo the current rule which has brought needed clarity to the issue of independent contractor status,” ATA Vice President of Workforce Policy Nick Geale said in a statement.
“We are just beginning to review this proposal, but any rule must recognize the owner-operator model if it is to be successful when applied to trucking,” added OOIDA President Todd Spencer, in a separate statement. “The administration’s stated desire to formulate a test that considers all aspects of a working relationship is promising, but we will carefully review every detail of their proposal and fight back against any provision that would unfairly stack the deck against true independent contractors.”
The National Retail Federation (NRF) weighed in earlier this week as well, calling the proposal unwarranted, unnecessary, and likely to cause confusion and spur litigation.
Feary echoed those concerns and said he expects the issue to linger into 2023.
“I wouldn’t expect an actual rule until late spring, early summer of next year, [and we] may see litigation over this,” he said. “I think you’re not going to see anything other than some legal machinations through the end of this year and early next year, and then probably start to see the manifestation of this rule.”
Timing and the political landscape will likely play a role as well.
“If this hits in June of 2023 … and if the US DOL enforcement body is trained on it and ready to enforce it by the end of 2023, now you’re into 2024 and you may have a new administration,” Feary explained. “Because of the politics of it, it’s hard to predict the long-term ramifications.”
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.