These past weeks, there have been a lot of not so flattering news concerning Amazon and its work-related management practices. As a supply chain management focused blog, we are compelled to highlight the concerning as well as positive trends.

Teachers of business and operations management can often remind us that a corporate culture drives employee and organizational behaviors. How a firm communicates, how employees are monitored, evaluated, or compensated, and how trust is demonstrated are all important signposts.

One of the darker sides of global supply chain environments also stems from how employees, independent contractors and suppliers are treated in day-to-day interactions and in setting expectations.

 

Independent Contractor Drivers

Supply Chain Matters recently highlighted Amazon’s announcement of the ordering 20,000 Mercedes parcel delivery vans to build-out its own independent contractor last-mile delivery fleet. Yet, there is another reported face to this strategy.  Amazon branded delivery vans

Site Business Insider recently published two eye-popping commentaries describing parcel delivery van drivers of Amazon’s independent contractors. In one article, the publication indicates speaking directly with 31 current or recently employed drivers over a period of eight months. Complaints voiced included a physically demanding work environment under strict time constraints, of not adequately being paid of overtime hours worked, and having to overlook common sense safety needs.

According to the publication, many driver accounts were supported by text messages, photo images, emails, and legal filings.

Noted is that Amazon courier companies pay drivers either a flat daily rate or an hourly rate. Four drivers among three different courier firms reportedly complained that employers promised health benefits that did not materialize. It describes incidents were drivers were denied scheduled following week work if they failed to show-up for scheduled weekend work shifts.

Drivers indicated that they typically are required to deliver between 250-300 packages per day, and volumes can typically spike to 400 daily packages during peak days. Drivers had indicated there was little tolerance to work breaks and some stated they were compelled to urinate in bottles in the vans they drive. Female drivers have to bring baby wipes. Drivers are expected to complete a daily route in 9 hours. Some indicated blowing through intersections and Stop signs to stay on-schedule claiming that delivery routing software does not factor traffic or weather conditions.

Similar to other parcel delivery firms, Amazon monitors drivers with handheld package scanners termed “rabbits.” The mobile devices serve as a means to update customers on package delivery but also can alert to drivers falling behind schedule. Dispatchers indicated frequent calls from Amazon who then in-turn, constantly pressure drivers.

A second Business Insider report indicates that more than 200 delivery drivers are suing Amazon over claims of missing wages.

In each of these reports, Amazon indicated to Business Insider that the online provider treats such reports very seriously.

For readers unaware, a stated investor in Business Insider is Jeff Bezos, the founder of Amazon.

 

Warehouse Workers

Supply Chain Matters has highlighted previous reports of alleged labor abuses and work stoppages that have occurred at a number of global Amazon warehouse and customer fulfillment centers. In 2014, a labor union attempted to organize workers at an Amazon warehouse in Middletown Delaware. In subsequent peak holiday fulfillment periods, a trade union in Germany has staged repeated one-day work stoppages to protest labor classifications and wage rates across Germany.

United Kingdom based author James Bloodworth, penned a column in The Guardian that accounts for his time working undercover in a 1200 worker Amazon UK warehouse. Work shifts were described as ten and one-half hours and in a single work shift, workers could walk upwards of 24 kilometers. Workers were paid a minimum wage, described as the equivalent of $9 per hour.

Having previously performed warehouse work, Bloodworth indicated shock at what he discovered: “This was a workplace environment which decency, respect and dignity were absent.” Workers were required to pass-thru airport-style security gates at the beginning or end of work shifts, or when having to take work breaks, including use of a bathroom. Described was admonishment for “idle time”, constant pressures for work productivity, and once again, evidence of workers urinating in receptacles in the warehouse.

While Bloodworth advocates support for Senator Bernie Sander’s “Stop Bad Employers by Zeroing Out Subsidies Act, from our lens, his commentary seems concerning and real.

 

Contracted Airfreight Operations

Two years ago, pilots working for Amazon’s leased air freight contractors Air Transport Services Group (ATSG) and Atlas Worldwide Holdings took to social media to complain about staffing, scheduling pressures and compensation. A Federal judge ordered pilots back to work on the second day of a work stoppage.

 

Employees Leaking Information for Alleged Bribes

The Wall Street Journal reports  (Paid subscription or metered views) this week that the online retailer is actively investigating data leaks and alleged bribes of employees to gain favor of offered products. According to the report, some Amazon employees, with the aid of intermediaries, were offering internal data and other confidential information that could provide a competitive edge for independent merchants selling on the Amazon platform.  The WSJ noted that the practice was especially prevalent in China and is a direct violation to stated Amazon policy. The report hints that the relatively small salaries being paid to China based workers might have embolden them to take such a risk. Actions reportedly included deletion of negative product reviews or sharing the email address of such negative reviews. The report indicates that the going rate for deleting such a negative review averages $300 in China, with a five-review minimum in most requests.

Implication

As Supply Chain Matters has noted in prior commentaries, the Amazon Effect takes on many different connotations and consequent behaviors, both from competitive retailers and merchants. It further includes Amazon focused workers, those that are directly employed or those that work for independent contractors to Amazon.

Huge success in the market comes with an increased looking glass for corporate social responsibility norms and practices. As noted in our opening, how a firm communicates, how employees are monitored and evaluated and how trust is demonstrated are significant signposts of corporate social responsibility and of corporate values. They drive worker perceptions and actions, and increasingly, customer preferences for conducting business with responsible retailers.

The darker side of Amazon’s work culture is indeed becoming more visible with each passing month and year and from our lens, the online retailer can no longer hide it under the rug. As those shiny new Mercedes parcel vans travail public streets emboldened with the Amazon Prime emblem, numerous dents and damage will be a visible sign.

 

Bob Ferrari

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