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.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."