Outsourced: Amazon is reorganizing its logistics. Labour law and dignity play no role
Jörn Boewe is a freelance journalist at the Berlin press agency work in progress. He mainly deals with topics around union organising at the workplace as a response to the neo-liberal upheavals in the working world.
The interview first appeared in German in the weekly newspaper Der Freitag
You can read the full report by Jörn and Johannes Schulten here
“Machine, I am a machine,” says the driver of the white delivery truck. “Twelve hours, every day, for four years. But if I don’t work, I don’t get paid.” The man delivers packages for Amazon, the global number one online retailer. Every morning, he waits in line with his delivery truck outside the Frankfurt distribution centre.
But on this late summer morning, at the beginning of September 2021, something is different: A small group of trade unionists is handing out flyers in different languages to the drivers. They quickly strike up a conversation. The stories are similar: drivers tell of ten- or twelve-hour shifts, of work pressure, of daily tours with 250 deliveries. At the end of the month, often late, they receive 1,000 to 1,200 euros. Sometimes there are deductions, for example for a worn mirror or scratches on the vehicle.
If you take a closer look, much of this violates German labour law. But where there’s no plaintiff, there’s no judge. Drivers are often unaware of their rights. Many come from Eastern Europe, some from the Middle East. They depend on the job. The courage to take on their employer is not great.
The action in Frankfurt was organized by the service sector union Verdi and the DGB’s “Fair Mobility” advisory network. One hundred people in small teams are distributing information material to more than 8,000 drivers who are on the road for Amazon in parcel delivery on the “last mile” or in truck transport. However, none of them is employed by Amazon. From the beginning, the company has outsourced its entrepreneurial risk for delivery to a network of small subcontractors who compete with each other and pass on the pressure to their employees.
Amazon operates 14 large shipping warehouses in Germany between Hamburg and Munich. In a large part of them, strikes have been going on again and again for years. But in addition to mail order, the company is also developing other strategic fields:e One of them is logistics. Amazon has entered the container shipping business and operates its own cargo airline, now the fourth largest in the world. Last fall, the Group opened its own air freight hub at Halle-Leipzig Airport. In the middle of the Corona crisis, which was not a crisis for Amazon, but the biggest boom ever.
The “last mile” is considered the most critical part of the logistics chain. It is where the package makes its way to the end customer that the most can go wrong. Delivery vehicles are stuck in traffic jams or can’t find a parking space, recipients aren’t at home, address information is unclear, parcel carriers have to get to the front door on the fifth floor of the second back building or past biting dogs. And, most importantly for Amazon:
The last mile is where 50 percent of the costs are incurred.
Not surprisingly, Amazon has been trying to get the “last mile” under its own control for about five years. With its Amazon Logistics division, the company is building up its own delivery service and making itself increasingly independent of companies like DHL and Hermes. This is yet another precarious driver in an industry that is already under enormous competitive pressure. “Delivery Service Partners” is the name of the specially created subcontractor network. In addition, the company is experimenting with a platform-based employment model that is otherwise familiar from Uber or other companies in the gig economy: “Self-employed delivery people” can register via the app “Amazon Flex” and deliver packages in their own cars. In return, they are paid 25 euros an hour, from which they must pay not only living expenses, but also their operating costs and social security.
The main burden of the delivery business, however, lies with the “DSPs” – small companies with five to ten, sometimes 25 vehicles that line up every morning in front of the goods distribution centers together with the drivers of other equally small companies.
Together with the drivers of other equally small companies. Amazon has set up around fifty such regional four-part centers in Amazon has now set up in Germany. This is where delivery tours are planned and packages are loaded onto delivery trucks. Amazon did not invent the subcontractor system for parcel delivery – Hermes, DPD, GLS also rely on it, and more and more so the Deutsche Post subsidiary DHL. But Amazon combines the business advantages of such outsourcing with digital monitoring, control by algorithms and AI much more systematically than any of its competitors.
As an example, Tina Morgenroth from the Thuringia-based “Fair Mobility” advice center took a look at the distribution center opening in Erfurt-Stotternheim at the end of 2019. Not because she was targeting Amazon, but because more and more employees of Amazon subcontractors were coming to her at the counseling center with problems – by now there are around 150 who asked for support. They report working conditions that should not exist under current labor law. Ten- to twelve-hour shifts six days a week, no continued payment of wages in the event of illness, undercutting of the statutory minimum wage, work pressure that makes it impossible to take the legally prescribed breaks. Nevertheless, break times are automatically deducted – AI sends its regards.
Inspections by the relevant occupational health and safety authorities have not yet posed a serious threat to Amazon. It is difficult to hold the company responsible for the working conditions of its subcontractors. But they are often hard to pin down. In mid-July, for example, the Thuringia labor protection authority found violations at 21 Amazon parcel subcontractors. However, because 20 of these companies are based outside Thuringia, they are not responsible, according to an inquiry. Occupational safety is a state matter. However, the problem – the Amazon system – is global.
You can read the full report by Jörn and Johannes Schulten here