September 25, 2023

Amazon’s Delivery Network is susceptible to labor unrest

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Is there a more familiar sign of corporate dominance than the Amazon delivery van?As recently as four years ago, the blue-gray vehicle with the smiley arrow was a relative novelty among fleets of brown and blue-and-white delivery trucks clogging the streets. Today, the Amazon vans are almost inescapable. Between 2020 and 2022, their numbers more than doubled, to roughly 100,000.But this symbol of Amazon’s strength may hint at something else: an underappreciated vulnerability.The vans are just the most visible piece of ‌the company’s vast delivery network. When you place an order for cat toys or razor blades or vacuum bags, Amazon employees typically pluck them off a shelf in a warehouse, then ship them to a succession of buildings, known as sort centers and delivery stations, where they are grouped by destination and loaded onto vans.The system, which also includes planes and air hubs, has enabled ever-faster delivery, according to data from NIQ (NielsenIQ). It has also made Amazon susceptible to a potent form of labor organizing — choke point organizing — in which workers threaten to hobble a company’s operations by shutting down key sites, known as choke points.In September 2019, workers at an Amazon delivery station in Sacramento began campaigning for paid personal time off, which many part-time employees in such buildings lacked. With no progress on their demands, the workers walked off their shifts just before Christmas, and the campaign gained momentum at delivery stations in Chicago and New York. In March 2020, Amazon announced that it was providing a paid-time-off benefit that affected more than 10,000 part-time employees at buildings nationwide.While it is rare for employees to pry loose costly concessions from Amazon, workers who threaten choke points within its delivery network appear to have won concessions multiple times.Following walkouts over pay and working conditions at two Chicago delivery stations just before Christmas 2021, hundreds of Chicago-area workers received raises of about $2 an hour. After about half of the roughly 1,500 employees at an air hub in San Bernardino, Calif., submitted a petition seeking higher pay last summer, Amazon raised hourly wages for night workers by nearly a dollar. The workers had discussed striking, and dozens later walked out.Amazon said it made changes to wages, paid time off and other policies on its own, unrelated to the activities of small groups of workers. “Nothing is more important than the safety and well-being of our teams,” said Lisa Levandowski, an Amazon spokeswoman.But experts argue that the organizing has gotten results. Choke point organizers “have had some success building worker power, challenging the boss, getting some gains,” said Jake Alimahomed-Wilson, a professor at California State University, Long Beach, and an editor of the book “Choke Points: Logistics Workers Disrupting the Global Supply Chain.”Amazon’s recent growth helped create the choke points that workers have sought to exploit. During its first two decades, the company stayed out of the delivery business and simply handed off your cat toys and razor blades to the likes of UPS, FedEx and the Postal Service.Amazon began transporting many of its own packages after the 2013 holiday season, when a surge of orders backed up UPS and other carriers. Later, during the pandemic, Amazon significantly increased its transportation footprint to handle a boom in orders while seeking to drive down delivery times. Hence all those new vans.The problem is that shipping networks are fragile.If workers walk off the job at one of Amazon’s traditional warehouses, the fulfillment center, the business impact is likely to be minimal because the sheer number of warehouses means orders can be easily redirected to another one.But a shipping network has far less redundancy. If one site goes down, typically either the packages don’t arrive on time or the site must be bypassed, often at considerable expense. All the more so if the site handles a huge volume of packages.“That’s truly a position of vulnerability,” said Marc Wulfraat, president of MWPVL International, a supply-chain consulting firm, referring to Amazon’s largest air hub, in Kentucky.And as Amazon’s chief executive, Andy Jassy, seeks to drive down shipping times further, the disruptive potential of this kind of organizing may be growing.“Part of the opportunity here to organize has to do with their airfreight operation being a real choke point,” said Griffin Ritze, a driver at the Kentucky hub, where workers have started a union campaign.Amazon said that its transportation network, including the Kentucky hub, could withstand short-term disruptions with little effect on customers, but that longer disruptions could create inefficiencies and higher costs. Ms. Levandowski added that the company had invested billions in raising pay and improving training, safety and benefits since the start of the pandemic, but that it knew “there will always be more to do.”

On the evening of Dec. 30, 1936, a local leader of the fledgling United Automobile Workers flashed a red light outside the union’s office, across from a massive General Motors plant in Flint, Mich., summoning the plant’s shop stewards. As plant conditions had deteriorated — not least, the grueling “speed-up” that required some workers to make thousands of hand motions per hour — the union decided it was time to strike for recognition. When the stewards returned to the plant, employees stopped working and refused to leave.The so-called sit-down strike at the Flint plant and another in Cleveland nearly paralyzed the company because they were known as mother plants: the sole producers of many parts for G.M. assembly plants. After several tense weeks, G.M., which had been hostile to unions, recognized the U.A.W.But it would not soon forget its vulnerability to strikes. As the sociologists Joshua Murray and Michael Schwartz observed in their book “Wrecked: How the American Automobile Industry Destroyed Its Capacity to Compete,” General Motors and other U.S. automakers spent the next few decades dispersing production across a much wider number of plants. Thereafter, Mr. Murray and Mr. Schwartz wrote, “even if the union mobilized enough workers to shut an entire plant down, the companies now had the option of ramping up production at one of the parallel plants.”Amazon has moved in a different direction from the automakers in the last century — in some ways making itself more vulnerable, not less, as its business has ballooned.According to data from MWPVL International, the consulting firm, a small portion of Amazon fulfillment centers ship an extremely high volume of goods — more than one million items a day during last year’s peak period — including JFK8, the Staten Island warehouse where workers voted to join the Amazon Labor Union last spring.If a union strikes and shuts down one of those buildings, “there will be penalties to pay” for Amazon even with its redundant capacity, said Mr. Wulfraat, MWPVL International’s president. He cited higher transportation costs and possible shipping delays. Amazon said the operational impact would be minimal.More precarious is the company’s delivery infrastructure, where such extensive redundancy is impractical.For example, Amazon also operates dozens of so-called sort centers, where often more than 100,000 packages a day are grouped by geographic area. Many metro areas the size of Albuquerque or St. Louis have only one or two such centers, and a metro area as large as Chicago has only four.If one went down, Mr. Wulfraat said, Amazon could be forced to reroute packages to sort centers in other cities, raising costs. “You couldn’t just call up UPS and say: ‘Tomorrow, we’re going to dump 200,000 packages into your lap. Is that problem?’ They don’t have the bandwidth.” To get a sense of what this could cost, consider that FedEx spent hundreds of millions of dollars on such rerouting in 2021.Some workers hope to take advantage. After organizers at a sort center on Staten Island lost a vote on whether to unionize last year, they focused on building enough support to force a shutdown at the building, which sorts packages for 15 delivery stations in the New York area.“It’s not enough to get someone to go and vote yes,” said Madeline Wesley, a worker involved in the organizing. “What we’re going for here is a fundamental shift in the power dynamics.”Delivery stations, where sort centers send packages so they can be loaded onto vans, can be similarly vulnerable. In the fall of 2021, the company declined to increase pay for many workers in the Chicago area.“We were told our pay was reviewed in September of 2021 and there would be no raise,” said Ted Miin, a worker involved in organizing at a delivery station there.But shortly after workers at two delivery stations in the area walked off the job that December, the company increased pay for workers in those buildings by about $2 per hour. “It was pretty clear to us that our walkouts were what won us the raise,” Mr. Miin said.Amazon said that the group was merely claiming credit for Chicago-area pay adjustments the company had begun making on its own, and that it had taken similar steps at locations where there was no organizing.There are several reasons a walkout at a delivery station can be effective.Unlike Amazon’s large fulfillment centers, which typically employ thousands, delivery stations range from a few dozen employees to a few hundred, and the workers tend to be in closer contact.“Work in a delivery station is more social,” said Charmaine Chua, an expert on logistics and labor organizing at the University of California, Santa Barbara. “That can overcome significant problems with fulfillment centers, of the work being isolated.”(One exception: fulfillment centers that draw workers from tightknit communities, like one near Tijuana, Mexico, and another near the Somali community in Minnesota, where workers appear to have won concessions in recent years.)While mobilizing hundreds of workers at a fulfillment center may be daunting, a walkout of several dozen delivery station workers could delay tens of thousands of packages that are supposed to end up on vans by late morning.And a longer shutdown at one delivery station could take a toll on other buildings.“It’s not like the I.T. world, where there are multiple redundant systems — one server goes down, and another pops up,” said Chris Freimann, a former manager at a St. Louis-area delivery station. “When one goes down, the others feel the impact of it. The margin of error gets very, very tight.”Amazon denied this, saying it had the capacity to reallocate packages to other delivery stations with little disruption.

On the last Friday in December, Amazon suspended a San Bernardino air hub employee, Sara Fee, who has helped organized co-workers at the site.The next week, workers wore “Hello, my name is” stickers on which they wrote, “Where is Sara?” They discussed plans to strike if Ms. Fee was fired. The company asked her to return to work by the end of the week.There is arguably no bigger target for organizers at Amazon than the company’s air hubs, which it uses to move more than one million packages each day across large distances. The San Bernardino hub is one of a handful that increasingly form the backbone of the company’s air transit system.This appears to have given workers leverage. In addition to asking Ms. Fee to return this winter, the company announced that it was raising the hourly wage for night shifts by nearly $1 last August — a significant bump in addition to last year’s nationwide pay increase. This was after about half the hub’s roughly 1,500 employees added their names to a petition seeking higher pay.Amazon said it had brought Ms. Fee back after investigating reports that she yelled at a manager. In response to that allegation, Eli Naduris-Weissman, a lawyer who represents Inland Empire Amazon Workers United, a group organizing workers at the site, said Ms. Fee was an outspoken leader who had suffered retaliation after complaining about being targeted by Amazon.The company’s facility at the Cincinnati airport in northern Kentucky, which is known as KCVG, is the largest of the hubs. At its 2019 groundbreaking, the company founder, Jeff Bezos, declared, “We’re going to move Prime from two-day to one-day, and this hub is a big part of that.” Then he exhorted, “Let’s move some earth!” and mounted a John Deere front loader.The number of employees at the Kentucky hub (now well over 2,000) and the number of flights has grown substantially since the facility opened almost two years ago. The Chaddick Institute for Metropolitan Development at DePaul University estimates that the number of Amazon Air flights in or out of KCVG on a typical day more than doubled between early 2022 and early 2023, to over 50. Amazon said the institute’s reports, which rely on public data, drew inaccurate conclusions but did not dispute the trend in Kentucky. The company said it also continued to ship some packages through UPS and the Postal Service.Labor organizing has accompanied the increased activity. In September, managers at KCVG told workers that they would receive a small raise — ranging from 50 cents to about $1 an hour, depending on seniority.Several employees said they had been expecting a “peak” season bonus of at least $2 an hour, which they received the previous year. Some who work on the ramp, where planes are loaded and unloaded, left in frustration after the announcement.“There are usually around 50 tug drivers,” said Mr. Ritze, a driver involved in the organizing, referring to the trucks that move large containers across the facility. “It went down to 20. Everyone else left, took P.T.O.”Not long after, a group of organizers submitted a petition with the names of roughly 300 workers asking the company to restore the peak bonus and make it permanent. Members of the group later announced that they were seeking to unionize.Management didn’t budge on the bonus, but canceled the first week of mandatory extra time, in which employees work up to 60 hours a week between Thanksgiving and Christmas.The site’s director of operations, Adrian Melendez, said that Amazon had opted for a smaller pay increase that was permanent rather than a larger increase that was temporary, and that most workers understood the rationale. The company said it had canceled a week of mandatory overtime because enough workers had volunteered.At their spare campaign office near the airport on a morning in February, a handful of union backers said that frustration over the small raise had initially gotten them involved, but that other issues, like safety, also loomed large.The effort, funded in part by members of the left-wing group Socialist Alternative, appears to have attracted more attention from Amazon recently. After the Amazon Labor Union president, Christian Smalls, appeared in Kentucky in March to offer the union’s support, the company began regularly holding meetings for workers in which it dwelled on the drawbacks of unionizing, according to a recording of one of the meetings.“Like many other companies, we hold these meetings because it’s important that everyone understands the facts about joining a union and the election process,” said Ms. Levandowski, the Amazon spokeswoman.Workers may not even need to win a union election in Kentucky in order to extract concessions from the company.During each shift, dozens of tug drivers move hundreds of package containers, known as cans, between the warehouse and the planes. If the tugs don’t move, neither do the packages.The company clearly understands the stakes: Workers say managers frequently urge employees who aren’t tug drivers to become “tug-trained” so they can operate tugs in the event of a driver shortage. Amazon said that it was common to cross-train workers and that managers provided support and coaching to employees if the tugs got backed up.The drivers are aware of their power, too. And many support the union effort.“Any time there’s a delay, it’s always blamed on the tug drivers — management doesn’t take any responsibility for it,” said Steven Kelley, another worker active in the campaign. “That’s honestly why most of them are in favor.”If enough tug drivers got fed up and simply refused to move, Mr. Kelley added, “it would shut the whole operation down.”

Introduction

Amazon has been leading the online retail industry for years now with its quick and efficient delivery network. However, the company’s delivery network is currently facing labor strife, which is making it vulnerable.

Amazon’s Gig Economy Model

Amazon’s delivery network operates on a gig economy model, where drivers are hired as independent contractors. These drivers are not classified as employees, hence they are not entitled to benefits such as health insurance, paid time off, and overtime pay. This model has made Amazon’s delivery network vulnerable to labor strife as the drivers have no job security.

Working Conditions for Drivers

The drivers in Amazon’s delivery network have to deal with harsh working conditions, which are becoming unsustainable. They have to work long hours, driving on tight schedules with no breaks. The drivers have to bear the costs of the delivery vans and fuel while earning low wages.

Labor Unrest and Unionization

The drivers in Amazon’s delivery network are increasingly organizing and protesting for better working conditions and higher wages. This unrest has led to unionization efforts, which could have severe repercussions for Amazon’s delivery network. A unionized workforce could increase labor costs, reduce flexibility, and make it difficult for Amazon to maintain its fast delivery network.

FAQs

Q: What is Amazon’s delivery network?

A: Amazon’s delivery network is a system of delivery drivers responsible for delivering products purchased by Amazon customers.

Q: Why is Amazon’s delivery network vulnerable?

A: Amazon’s delivery network is vulnerable due to the gig economy model which makes drivers independent contractors with no job security or benefits, as well as poor working conditions.

Q: What are the working conditions for drivers in Amazon’s delivery network?

A: Drivers have to work long hours, and there are no breaks. They have to bear the costs of the delivery vans and fuel while earning low wages.

Q: Why are drivers organizing and protesting?

A: Drivers are organizing and protesting for better working conditions, higher wages, and job security.

Q: What could be the repercussions of unionization for Amazon’s delivery network?

A: Unionization could increase labor costs, reduce flexibility, and make it difficult for Amazon to maintain its fast delivery network.
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