This Week in Logistics News (August 31 – September 4, 2015)

Would you rather spend almost 40 days on a remote island in the South China Sea, with very little food and water (just rice, rats, and the occasional stingray ), flimsy shelter that doesn’t protect you from the sun, rain, and biting insects, and no communication with friends and family back at home — or would you rather be a truck driver?

Over the years, there’s been a lot of commentary (discussion, debate) about the driver shortage in the trucking industry — whether it really exists or if it’s just a ruse by carriers to negotiate higher rates. A common argument is that if a driver shortage did exist, the laws of supply and demand would kick in. As Yossi Sheffi from MIT put it in a thoughtful article published recently on LinkedIn (“What Price Truck Driver Shortages?”):

Based on the economics of supply and demand – when the former falls below the latter, prices tend to rise – if drivers are a scarce commodity, the market should adjust by increasing the price companies pay for this resource, thereby attracting more workers until the imbalance is corrected. Yet the American Trucking Associations estimate that the industry is short of 35,000 to 40,000 drivers.

I also shared my perspective on this topic back in July 2014 (“The Driver Shortage Problem in Trucking: Time for Plan B”), where I argued that paying drivers more, which some trucking companies have started to do, won’t necessarily correct the imbalance. As I wrote at the time:

If you can’t pay people enough to become long-haul truck drivers — if the pull of home (of sleeping in your own bed and being with your family every night) is indeed greater than the pull of money, even when unemployment was above 8 percent — then what’s the solution to the driver shortage problem?

In other words, for a large percentage of people in the labor force (and on the unemployment line), you can’t pay them enough to be a truck driver, which brings me back to the opening paragraph.

My wife and I are huge fans of the television show Survivor, and this summer we decided to watch the very first season again, which aired 15 years ago. The most memorable participant from that season, aside from the winner Richard Hatch, was Susan Hawk, a truck driver from Chicago who gave the infamous “rats and snakes” speech in the final episode. Susan made it to the final four, and when she was voted out, she made some brief comments about her experience on the island. Watch the video clip below to hear what she said:

“Outside of the weather and being cold and wet when it rained at night, and the sand fleas, this was a lot easier for me than driving a truck through Chicago every day of the week. That’s a lot worse than being out here in the bush.”

Just another voice in the truck driver shortage debate.

(For related commentary, see “Truck Drivers are Treated Like Trash with No Rights“)

Now, on to this week’s supply chain and logistics news, which I’ll keep brief because I’m sure many of you are heading out early for the holiday weekend.

There’s been a lot of acquisitions and partnerships this year related to B2B connectivity. In recent weeks, for example, we’ve seen Infor acquiring GT Nexus, and SAP and Descartes partnering on TMS connectivity. This week, HighJump extended its B2B connectivity network and capabilities by acquiring Wesupply, “a United Kingdom-based premier provider of supplier enablement and B2B integration solutions across multiple industries including retail, building, CPG, energy and manufacturing.” Here are some additional details from the press release:

Wesupply’s comprehensive electronic trading platform increases HighJump TrueCommerce EDI Solutions’ global reach to over 10,000 trading partners and 130,000 trading connections…Wesupply has successfully deployed EDI and e-invoicing solutions to leading UK hubs and suppliers such as the UK grocer, Sainsbury’s, and builders merchant Saint-Gobain. The company offers a fully managed service platform complemented by a best of breed application for B2B message tracking, order fulfillment and invoice processing.

For related commentary, see yesterday’s post, “Insights on the Power of Supply Chain Operating Networks.”

Earlier this week, I wrote about how workers in the logistics industry are challenging the traditional definitions of “employer” and “employee,” with the recent National Labor Relations Board (NLRB) decision in the Browning-Ferris case potentially disrupting 3PL-customer relationships. According to a Reuters article, the NLRB decision will drive unionization efforts across many industries:  

Union organizers see Thursday’s ruling as paving the way for gains across a range of industries given the widespread use of subcontracting by the manufacturing and service sectors to lower costs.

“It’s certainly a game changer,” said Teague Paterson, a partner at Beeson Tayer & Bodine, a law firm representing the union in the NLRB case. “Unions and workers have been frustrated by these triangulated relations that the board condoned in the past. It certainly opens the door to more organizing.”

Another potential game-changer is the decision on Tuesday by U.S. District Judge Edward Chen to grant class-action status to a lawsuit brought against Uber in California by three drivers claiming they should be treated as employees not independent contractors. As the article states:

The results of Uber’s legal battle could reshape the sharing economy…Uber and other companies, including Lyft and Handy, say the contractor model allows for flexibility that many see as important to their success.

An ultimate finding that drivers are employees could raise Uber’s costs beyond the lawsuit’s scope and force it to pay Social Security, workers’ compensation, and unemployment insurance.

Labor Day came early this year, and it looks like it will extend well beyond next Monday too.

And with that, have a happy weekend!

Song of the Week: “Happy Idiot” by TV on the Radio