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.
Industry groups from every corner of the logistics sector are criticizing a White House policy released Tuesday that would swing U.S. Department of Labor (DOL) standards toward classifying many workers as employees instead of independent contractors.
The long-running debate over that topic could have a large impact on companies that rely on contractors, including supply chain and transportation companies that hire over the road truckers and gig workers to deliver freight loads. The new Biden Administration standard rescinds a policy known as the 2021 Independent Contractor Rule, a Trump-era policy that logistics experts have called favorable to classifying workers as independent contractors.
In its place, the new regulation creates a less predictable framework that increases the likelihood of determining that a worker has employee status under the Fair Labor Standards Act (FLSA), the federal statute that governs minimum wage and overtime pay, according to analysis by the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The regulation is slated to take effect on March 11, although it may be challenged in court before that happens. “We anticipate business groups will file suit(s) challenging DOL’s authority to issue this regulation,” Scopelitis said in an email. “From enactment of the FLSA in 1938 until January 2020, DOL had not issued a regulation on this matter. After issuing a regulation in 2020, DOL abruptly changed its view with a change in control of the White House. Given increased judicial wariness of deference to agency interpretations, it is unclear how the regulation will impact private litigation should it survive anticipated legal challenges.”
Although the regulation’s legal future is cloudy, its standing in the eyes of logistics industry groups is crystal clear. The groups lining up to oppose the new policy include the American Trucking Associations (ATA), Intermodal Association of North America (IANA), National Association of Wholesaler-Distributors (NAW), Owner-Operator Independent Drivers Association (OOIDA), and National Retail Federation (NRF).
The NRF said the new rule would be bad for both retailers and workers. “Retailers, along with countless other employers, maintain a wide range of business relationships with independent contractors, including billing, facility maintenance, data analysis, delivery, marketing and other critical services. These relationships have become even more important and common in a post-COVID-19 environment,” the NRF’s senior vice president of Government Relations, David French, said in a release. “The administration is repealing common-sense rules that clearly articulate the difference between employees and independent contractors. NRF vehemently opposes a change in this important area of law, which is both unwarranted and unnecessary. This decision will only foster confusion, endless litigation, and reduced innovation.”
American Trucking Associations President and CEO Chris Spear was even more cutting in his criticism, calling the new regulation “un-American” for its potential to reduce the freedom of workers such as the nation’s 350,000 truckers who work as independent contractors.
Similar criticism came from IANA President and CEO Joni Casey, who said the “burdensome” new requirement threatens to force the job reclassification of over 80% of intermodal drayage drivers that currently hold independent contractor status.
OOIDA President Todd Spencer was slightly more muted in his criticism, saying that he had concerns that some details contained in the rule may disregard specifics of the trucking industry. “Truckers are tired of the endless parade of classification rules that do not listen to their concerns. This constantly changing landscape has created uncertainty that makes it more difficult for them to operate their businesses. We are still reviewing all the details in the final rule, and it is too soon to know what the exact effect of this final rule would be,” Spencer said.
RJW Logistics Group, a logistics solutions provider (LSP) for consumer packaged goods (CPG) brands, has received a “strategic investment” from Boston-based private equity firm Berkshire partners, and now plans to drive future innovations and expand its geographic reach, the Woodridge, Illinois-based company said Tuesday.
Terms of the deal were not disclosed, but the company said that CEO Kevin Williamson and other members of RJW management will continue to be “significant investors” in the company, while private equity firm Mason Wells, which invested in RJW in 2019, will maintain a minority investment position.
RJW is an asset-based transportation, logistics, and warehousing provider, operating more than 7.3 million square feet of consolidation warehouse space in the transportation hubs of Chicago and Dallas and employing 1,900 people. RJW says it partners with over 850 CPG brands and delivers to more than 180 retailers nationwide. According to the company, its retail logistics solutions save cost, improve visibility, and achieve industry-leading On-Time, In-Full (OTIF) performance. Those improvements drive increased in-stock rates and sales, benefiting both CPG brands and their retailer partners, the firm says.
"After several years of mitigating inflation, disruption, supply shocks, conflicts, and uncertainty, we are currently in a relative period of calm," John Paitek, vice president, GEP, said in a release. "But it is very much the calm before the coming storm. This report provides procurement and supply chain leaders with a prescriptive guide to weathering the gale force headwinds of protectionism, tariffs, trade wars, regulatory pressures, uncertainty, and the AI revolution that we will face in 2025."
A report from the company released today offers predictions and strategies for the upcoming year, organized into six major predictions in GEP’s “Outlook 2025: Procurement & Supply Chain” report.
Advanced AI agents will play a key role in demand forecasting, risk monitoring, and supply chain optimization, shifting procurement's mandate from tactical to strategic. Companies should invest in the technology now to to streamline processes and enhance decision-making.
Expanded value metrics will drive decisions, as success will be measured by resilience, sustainability, and compliance… not just cost efficiency. Companies should communicate value beyond cost savings to stakeholders, and develop new KPIs.
Increasing regulatory demands will necessitate heightened supply chain transparency and accountability. So companies should strengthen supplier audits, adopt ESG tracking tools, and integrate compliance into strategic procurement decisions.
Widening tariffs and trade restrictions will force companies to reassess total cost of ownership (TCO) metrics to include geopolitical and environmental risks, as nearshoring and friendshoring attempt to balance resilience with cost.
Rising energy costs and regulatory demands will accelerate the shift to sustainable operations, pushing companies to invest in renewable energy and redesign supply chains to align with ESG commitments.
New tariffs could drive prices higher, just as inflation has come under control and interest rates are returning to near-zero levels. That means companies must continue to secure cost savings as their primary responsibility.
Specifically, 48% of respondents identified rising tariffs and trade barriers as their top concern, followed by supply chain disruptions at 45% and geopolitical instability at 41%. Moreover, tariffs and trade barriers ranked as the priority issue regardless of company size, as respondents at companies with less than 250 employees, 251-500, 501-1,000, 1,001-50,000 and 50,000+ employees all cited it as the most significant issue they are currently facing.
“Evolving tariffs and trade policies are one of a number of complex issues requiring organizations to build more resilience into their supply chains through compliance, technology and strategic planning,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “With the potential for the incoming U.S. administration to impose new and additional tariffs on a wide variety of goods and countries of origin, U.S. importers may need to significantly re-engineer their sourcing strategies to mitigate potentially higher costs.”
A measure of business conditions for shippers improved in September due to lower fuel costs, looser trucking capacity, and lower freight rates, but the freight transportation forecasting firm FTR still expects readings to be weaker and closer to neutral through its two-year forecast period.
Bloomington, Indiana-based FTR is maintaining its stance that trucking conditions will improve, even though its Shippers Conditions Index (SCI) improved in September to 4.6 from a 2.9 reading in August, reaching its strongest level of the year.
“The fact that September’s index is the strongest since last December is not a sign that shippers’ market conditions are steadily improving,” Avery Vise, FTR’s vice president of trucking, said in a release.
“September and May were modest outliers this year in a market that is at least becoming more balanced. We expect that trend to continue and for SCI readings to be mostly negative to neutral in 2025 and 2026. However, markets in transition tend to be volatile, so further outliers are likely and possibly in both directions. The supply chain implications of tariffs are a wild card for 2025 especially,” he said.
The SCI tracks the changes representing four major conditions in the U.S. full-load freight market: freight demand, freight rates, fleet capacity, and fuel price. Combined into a single index, a positive score represents good, optimistic conditions, while a negative score represents bad, pessimistic conditions.
The New Hampshire-based cargo terminal orchestration technology vendor Lynxis LLC today said it has acquired Tedivo LLC, a provider of software to visualize and streamline vessel operations at marine terminals.
According to Lynxis, the deal strengthens its digitalization offerings for the global maritime industry, empowering shipping lines and terminal operators to drastically reduce vessel departure delays, mis-stowed containers and unsafe stowage conditions aboard cargo ships.
Terms of the deal were not disclosed.
More specifically, the move will enable key stakeholders to simplify stowage planning, improve data visualization, and optimize vessel operations to reduce costly delays, Lynxis CEO Larry Cuddy Jr. said in a release.