Working from the inside, Ken Paff has brought about reforms that give Teamster members more say in the running of their union. Now, he's working to eject the old guard and bring in new leadership.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Anyone affiliated with the International Brotherhood of Teamsters knows not to expect a neutral reaction when Ken Paff's name is mentioned.
To his supporters, Paff embodies an independent voice that holds the entrenched Teamster leadership accountable for actions that affect the 1.3 million-member union. To his critics, Paff is a nuisance whose importance is greatly exaggerated relative to the size of his group, the 10,000-member Teamsters for a Democratic Union (TDU).
Paff and the Detroit-based TDU are joined at the hip; he became the group's national organizer in 1978, a post he holds to this day. His tenure has been marked by such accomplishments as overturning the "two-thirds" rule, which had allowed contracts to be ratified with the approval of as little as one-third of the membership. Paff was also instrumental in helping Teamster members win the right to vote for its top leadership.
Throughout this year, Paff's voice will be heard. In the upcoming Teamster general election race, TDU has endorsed Sandy Pope, head of New York-based Local 805, who will challenge incumbent James P. Hoffa for the presidency. If Pope prevails, she will become the first woman to run the Teamsters. Lest anyone miss the significance of Paff's endorsement, consider that 20 years ago he backed another head of a New York local also considered a dark horse candidate. His name was Ron Carey.
In an interview with DC Velocity Senior Editor Mark B. Solomon, Paff, who turns 65 next month, spoke bluntly about Hoffa, the state of trucking labor, and why Pope is his choice. He also lashed out at leadership for allowing UPS Inc. to spend more than $6 billion to buy its way out of the Central States pension plan, a move he fears will, in the long run, cost the union dearly.
Q: One Teamster executive called you—with grudging admiration—a "pain in the ass." Do you think that's a reflection of Ken Paff's personality, or the nature of a dissident?
A: It's the TDU movement that the Hoffa administration finds threatening. It's not dissent per se, and it's certainly not about me. It's about an organized rank-and-file movement. These officials cannot stand it when members speak up and demand accountability. If there were no TDU, they would not have to worry about an alternative vision for the union, and members who want change would be isolated from one another. So the Hoffa administration spends a lot of resources attacking TDU.
They attack dissent, and they tend to support only those locals whose leaders march in lockstep. As a result, they weaken the union. In suppressing dissent, they are also undermining rank-and-file power and Teamster unity in action.
Q: TDU is supporting the campaign of Sandy Pope to be the next Teamster general president. What qualities do you see in her that convince you she is the most qualified to head the union? And how would her election affect both freight carriers and their employees? A: Sandy Pope is a Teamster. Hoffa is a celebrity. He is not involved in bargaining contracts, dealing with members' pension funds, aiding locals, or organizing—the lifeblood of the union. He spends his time at photo ops and golf outings, and with his inner circle.
Sandy Pope comes from the ranks and has experience in leadership at all levels of the union. Most of all, she has a vision for tapping rank-and-file power to build the union. To put the union's resources into building strength in core Teamster industries. And she's not going to be in bed with the corporations.
There is a great potential to draw Teamsters—who are by and large good unionists—into action behind union programs. We saw the beginnings of this in the 1990s, including during the UPS strike of 1997. That strike was not just won at the table. It was a full year of membership mobilization and involvement in [the] struggle. Sandy Pope was a part of that team. Hoffa and his people tried to undermine that struggle. They cozy up to UPS management and play "let's make a deal."
Q: How would you rate the job that Hoffa has done running the Teamsters? Where has he succeeded? And where has he fallen short? A: His specialty is working the media, which can be beneficial for the Teamsters and the labor movement. But as a strategy, it points in the wrong direction. When he ran for Teamster president, his slogan was "The Hoffa name means power," and for a while, he seemed to actually believe that by puffing himself up, it could somehow make the union strong. But the air is out of that balloon. He's fallen short in defending Teamster pensions, maintaining and strengthening national contracts, and helping local unions. He ran on "local autonomy" but runs the union top down.
Q: Trucking labor has been in what appears to be a long-term secular decline in membership and in influence. What, in your view, can re-energize the freight division, if indeed anything can be done? A: I start with this basic point: Transport and distribution are growth industries, and cannot be exported. It's not like manufacturing. So the Teamsters union should be in a growth mode in trucking, warehousing, distribution, rail, construction, waste, and public employment. In today's political and economic climate, that won't be easy, but it can be done with a long-term plan in place and a leadership capable of implementing it. It cannot be done trading Teamster power for short-term gains, like Hoffa's deal that let UPS bust out of the Central States pension plan. That was a crime.
UPS Freight is a critical piece of the plan. So is rebuilding the master freight contract. And organizing the non-union LTLs is another piece of the strategy. The present leadership has a short-term outlook—since it's a big challenge, they throw up their hands and head for the golf course, where they can meet up with trucking management. Can the union be rebuilt in freight and trucking? Absolutely. But it won't happen overnight, and it certainly won't happen with the present leadership.
Q: You have been skeptical of YRC Worldwide's efforts to survive through its series of restructured labor agreements. How do you assess its prospects? And have the rank and file sacrificed too much to keep the company alive? A: When the ship hits the reef, you can't blame the galley slaves. It's been poorly managed.
We're all hoping YRC will survive. It may depend on the pace of economic recovery. The working Teamsters have done far more than their share to make it possible. Right now, they are about $11 per hour under [National Master Freight Agreement levels] on pensions and wages, and they've lost additional contract protections that took decades of Teamster power to win. I'd be hard-pressed to name any other group of American workers who have taken such a big hit in their standard of living.
Q: ABF Freight System, YRC's chief union rival, sued YRC and the Teamsters on grounds the two negotiated their own agreements outside of the National Master Freight Agreement. But the suit was dismissed as having no legal standing. Do you believe ABF has a case? A: We said from the start that ABF didn't have a case, and the suit was promptly dismissed. But ABF management isn't stupid. They got a lot of press and reached a lot of Teamsters with their viewpoint. They also exposed that Hoffa approached them to offer them concessions, if they would acquire and merge with YRC. What genius was Hoffa listening to on that one?
Q: Legislation was introduced last year to reform multi-employer pension plans by requiring the Pension Benefit Guaranty Corp. (PBGC) to take over the pension obligations of retirees of bankrupt companies. However, bills in both houses went nowhere in the last Congress. Should this be a front-burner issue, and is there political will to change the system? A: This should be a front-burner issue. We are in danger of losing pensions in this country. Not just Teamsters, but millions of workers, from teachers to industrial workers.
The Teamsters should take the lead and make this a rallying cry. Sandy Pope has talked about organizing a march on Washington to defend pensions, to involve all of labor, coalitions representing seniors, and pension rights advocates.
The bill to strengthen the PBGC should be a priority. The Hoffa administration supports the bill, which is a start. It's time for the Teamsters union to put muscle behind it. It's time to build a movement, starting with Teamster members. The Tea Party has tapped people's anger and frustrations, but they point it all in the wrong direction. We need a movement to aim at real solutions. Defending Teamster pensions—and all pensions—is a good place to start.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.