As the logistics industry continues on the long road toward recovery from the COVID-19 Pandemic (how long? just ask the chicken wing), two issues continue to stand-out among all others: labor rights and logistics emissions. These issues represent not only some of the most vital components of the contemporary logistics industry, but are also two of the more public-facing segments of the industry as a whole. With media outlets watching, logistics providers spent the week struggling to establish themselves as both labor and planet friendly.
On August 1st, the International Brotherhood of Teamsters announced the launch of the UPS (United Postal Service) Teamsters contract campaign. The International Brotherhood of Teamsters–representing 350,000 full and part time UPS workers–is using this year-long campaign to inform and mobilize Union members ahead of Contract renegotiations in July 2023. The campaign is largely focused on job benefits and work-safety conditions. The contract, which cements the largest collective bargaining agreement in the United States, is set to expire in July 2023.
As shippers contend with high fuel surcharges and an ongoing capacity crisis, shipping giant FedEx is providing little relief in its announcement of 2022 peak season surcharges. According to SupplyChainDive, FedEx has "has pursued more profitability per shipment under new CEO Raj Subramaniam as demand has waned." However, the brunt of these costs will fall on large shippers who see skyrocketing demand during peak season, or deal primarily in bulky or oversized packages.
Pilots at UPS delivered a stand-out verdict on their current contract, with 91% of Union members voting in favor of a two year extension after 97% participation in voting. According to FreightWaves, "The new labor deal provides UPS and customers three years of extra certainty against possible labor disruptions," providing the fast-shipping giant with labor security in a high-stakes logistics marketplace.
In a sign that supply chain issues continue to rankle retail in the wake of the COVID-19 Pandemic, retail mega-player Walmart has cut 200 roles from its corporate offices, per reporting from SupplyChainDive.
As part of their initiatives to push back against persistent supply chain issues, the Biden White House is doubling the size of the Freight Logistics optimization Works initiative, expanding to 36 members, including ports, terminal operators, and major carriers like BNSF and J.B. Hunt. According to reporting from SupplyChainDive, "The Department of Transportation expects the voluntary program to grow in the coming months and plans to hold listening sessions with small businesses and technology experts."
With Scope 3 emissions accounting for 90% to 98% of retailers' total greenhouse gas emissions, per the National Retail Federation, industry experts are increasingly recognizing the need to decarbonize, and fast. With retailers responsible for a quarter of global carbon emissions, logistics leaders are considering new pathways to a greener future.
Amidst rising air transportation emissions in the U.S. and abroad, the lack of suitable alternatives to jet fuel is proving to be a major setback for sustainable freight logistics. Despite a rise in carbon intensity from 2.51 kg to 2.55 kg, the carrier, according to reporting from SupplyChainDive, "aims to cut its carbon intensity in half from 2020 levels by 2035, the same year it wants 30% of its aviation fuel to be from sustainable sources."
As logistics providers large and small have learned over the past several years, survival often means change. With this attitude in mind, USPS is introducing temporary rate hikes during the peak season to abate the effects of a steep drop in package demand. With an $85 million drop in year over year revenue, more changes are sure to come from the package-handling giant.
While the difficulty of consistent, reliable temperature regulation is an important issue across the logistics industry, it costs some sectors more than others. According to recent reporting from SupplyChainBrain, the pharmaceutical industry loses over "$35 billion annually because of failures in temperature-controlled logistics." However, logistics experts inside and outside of the pharmaceutical industry hope that improved technology and streamlined logistics can help lower these losses as the industry takes steps toward a digitized supply chain.
Grocery giant Tyson Foods recently began work on a $180 million expansion of its prepared foods facility in Caseyville, Illinois. With the expansion of the plant, Tyson hopes to bolster production of Hillshire Farm and Jimmy Dean grab-and-go items. With construction finishing up sometime in summer 2023, Tyson is hoping to implement automation throughout the warehouse.
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With peak season approaching in a dynamic logistics industry, here is a weekly roundup of news and trends shaping global supply chains.
FedEx has suspended its money-back service guarantee on shipping services through the end of peak. Find out why and what to do about it today.