Supply Chain Matters has been continuously alerting our readers to the ongoing labor disruption incidents occurring at Amazon’s customer fulfillment centers located across Germany, with implications to other global regions. The last reported work stoppage involving German based fulfillment centers occurred at the height of the 2013 holiday buying period, obviously strategically timed to capture the attention of Amazon management. Labor union officials vowed to continue with protest efforts.

The Wall Street Journal reported that yesterday, hundreds of German workers again walked off the job and staged an all-day strike at the Amazon fulfillment centers in Liepzig and Bad Hersfeld. According to this report, at day’s end, Amazon estimated that less than 650 workers among both locations took part in this work stoppage and customers were not affected. This was reported to be the second work stoppage incident thus far in 2014.

The issue involves an ongoing dispute as to whether temporary or full-time workers at Amazon’s German facilities should be classified as retail and catalog workers, which garners a higher pay scale in Germany. German labor union Verdi has been targeting Amazon, and had previously organized a number of other work stoppages in 2013 which included four continuous weeks of work stoppages that occurred in mid-June. Verdi has since garnered solidarity support from a number of U.S. labor unions in this ongoing protest effort.

In early January, the first-ever union election was held among technical workers at an Amazon warehouse in Middletown Delaware, but was unsuccessful when election ballots were counted.

As we have previously opined, labor unions continue to target high visibility global B2C retail customer fulfillment firms such as Amazon or Wal-Mart. During the highly promoted 2013 Thanksgiving and Black Friday shopping days, workers at a number of U.S. based Wal-Mart retail stores staged an organized protest.

Because these firms operate within high volume, dynamic and seasonality driven environments labor requirements are often flexed based on volume, while a core group of workers is retained to support defined steady-state fulfillment needs. Supply chain operations and fulfillment teams in these B2C environments seek maximum flexibility in labor costs and workers are increasingly becoming more interested in seeking a more influential voice in such compensation and hiring practices. At the same time, Amazon’s reported initiatives in developing and deploying advanced robotics within fulfillment centers along with drones for delivery does not help in calming such agitation. That continues to attract the attention of organized labor and these types of incidents targeted to the most visible industry players will obviously continue.  At some point, there will have to be a meeting of minds since a pure anti-union stance does not bode well in today’s era of social media amplification of headlines.

The “Amazon effect” has many faceted dimensions.

Bob Ferrari