This Week in Logistics News (August 24 – 29)

Hey Rubber Ducky (photo by Bob Chamberlin / Los Angeles Times)

Hey Rubber Ducky
(photo by Bob Chamberlin / Los Angeles Times)

For those of you reading this post on Friday, August 29, I just want to “rub it in” by letting you know that I just began my vacation! If you are reading this post while you are on vacation, it’s time to improve your social life (just kidding). Actually, I believe this Labor Day weekend is a good opportunity to reflect on the advances and technological improvements of society that have (hopefully for all) improved our working conditions and living standards from those of our ancestors.

Now on to this week’s logistics news:

Reversing a lower court’s earlier decision, A US Federal Appeals court ruled that FedEx Ground drivers in California and Oregon are employees, rather than independent contractors. There are differences in labor laws and requirements for independent contractors and direct employees in many states, and this ruling opens up the possibility for workers to pursue claims for wages and  benefits.

I may have fallen prey to the allure of a contentious article title, but the Journal of Commerce, referencing Alphaliner’s recent newsletter, contends that the bundling of ocean transportation with value added services is experiencing sluggish development. The article, noting recent financial losses at Damso and Yusen Logistics, a potential sale of APL Logistics, and sales of  Hanjin Logistics Korea and Cosco Logistics, stated the following:

“These disposals point to the reduced relevance of logistics capabilities for carriers, as the bundling of 3PL services with ocean transportation has not yielded significant synergies,” Alphaliner said. “The affiliated 3PLs are also increasingly competing against the carriers’ own customers, the traditional freight forwarders and independent 3PLs, with some carriers de-emphasizing their links with 3PL affiliates.”

National Retail Services (NRS) published some results of a survey they conducted, that polled thousands of truck drivers nationwide to determine the factors that influence truck drivers’ employment decisions. The survey found that 79 percent of drivers indicated that salary was most important, with home-time ranked second. I know that past surveys of employees (not specific to transportation careers) have found that job satisfaction is often ranked more important than salary. However, when I was in my twenties, an executive of the firm at which I worked stated to myself and a number of other employees that financial compensation isn’t typically seen as most important. I wish I had replied, “Ok, then just increase our salaries and we can move on to discussing the next topic.”

Alibaba, according to Reuters, reported $2.54 billion in revenue for the second quarter, a 46 percent year-over-year increase. Alibaba is often referred to as the Asian Amazon.com, but with a distinctly different business model (for comparison and contrast, see Amazon.com vs. Alibaba: Omni-channel Competitor and Collaborator). The following text from the article provides insight into why this company’s pending IPO is grabbing the headlines:

Alibaba accounts for about 80 percent of all online retail sales in China, where rising internet usage and an expanding middle-class helped the company generate gross merchandise volume of $296 billion in the 12 months ended June 30…..Alibaba’s initial public offering, which could top $16 billion to become the largest-ever technology IPO, is expected after the company starts an investor roadshow next week.

Finally, for those of you in the Los Angeles area that have a soft spot for inflatable ducks, the LA Times reports that you still have more time to view the 54 foot inflatable yellow duck, as its stay has been extended to September 6.   Have a great weekend everyone! Enjoy this week’s video, “Hey Rubber Ducky” by Ernie from Sesame Street.

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