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.
The Teamsters union's long and colorful history has included its share of moments that transcend labor-management relations and find their way into cultural lore. The race to elect the union's next general president could become one of those moments.
Consider the candidates, whose intersecting story lines seem straight out of central casting:
The incumbent, a 70-year-old Detroit native whose last name is virtually synonymous with organized labor. Drawing on the power and resources of the office, he is vying for his third full term at the union his late father built into an entity as powerful as it was controversial.
A 54-year-old single mother of two with a black belt in Tae Kwon Do. A child of privilege who quit college at 21 for what became a 33-year Teamster career, she is running as a virtual one-woman band to become the first female president in the union's 108-year history.
A salty-tongued 59-year-old ex-Marine, a Wisconsin native with 39 years at the Teamsters. Currently an international vice president and a former ally of the incumbent before splitting off in 2010, he now mostly swears at him instead of by him.
About 1,800 delegates are meeting at the Teamsters annual convention in Las Vegas, where today they will nominate candidates to run in the general election. Barring an unexpected turn of events, James P. Hoffa; Alexandra (Sandy) Pope, and Fred Gegare will garner enough votes to qualify for the nomination. The ballots go out in October and will be counted in November. By then, the three nominees will likely be covered with welts from what is destined to be a bare-knuckled affair.
The Pope and Gegare teams have framed the election as a referendum on Hoffa's leadership, charging Hoffa runs the union from the top down and routinely ignores local concerns, and has jettisoned long-time associates in favor of high-priced consultants with little knowledge of labor.
"He doesn't want to listen to anyone who has experience," says Gegare, who in 1999 ran as a vice president on Hoffa's slate during his first successful presidential push. "You don't turn in your old friends for new ones."
Gegare, who among other positions is chairman of the board of trustees at the union's influential Central States pension fund, claims he brings experience and support that Pope lacks, as well as a change from the status quo represented by Hoffa. "When I look at my résumé, I don't see how anyone can beat me," he says.
Pope, who in 2006 was named number two on an opposition slate that was eventually defeated by Hoffa, hopes to gain traction this time by contrasting her years as a field representative and president for the past six years of Local 805 in New York with Hoffa's lack of in-the-trenches experience.
"I've been in the thick of it for quite a while, and I feel Hoffa has been above it all, always," she says. "He was never a shop steward or a local officer, and he has totally removed himself."
The Hoffa camp, which is blanketing the Internet with campaign ads (a website for hiking trails in Georgia shows a campaign ad with Hoffa's name adorning the side of a 53-foot trailer), argues its candidate brings unmatched qualifications from his background as a labor lawyer, the knowledge base gained from growing up in a prominent union family, and his 12 years' experience as Teamster president. They dismiss Pope's candidacy as a pipe dream fueled by little more than human interest. They claim that she has virtually no funds to conduct a serious campaign and that she is unqualified to run the Teamsters after mismanaging her local's finances to the point of near-insolvency.
Hoffa's supporters acknowledge Gegare's level of experience but say his vitriolic comments about Hoffa ring hollow given that he supported the general president on almost every issue before breaking away from him.
"Gegare never spoke out against anything," says Richard Leebove, a senior adviser to the Hoffa campaign. The campaign did not make Hoffa available for an interview.
The Hoffa campaign points to such successes as his role in keeping less-than-truckload (LTL) carrier YRC Worldwide Inc. afloat—and preserving 25,000 to 30,000 Teamster jobs—as the company teetered on the abyss through 2009. The campaign also touts the organizing of 10,000 to 12,000 members of UPS Freight, which was known as Overnite Transportation prior to UPS's 2005 acquisition of Overnite.
Gegare and Pope argue that UPS Freight was not organized as part of the National Master Freight Agreement (NMFA), which covers unionized LTL carriers, and that its union members' wages started as much as $11 an hour below NMFA carriers like YRC and ABF Freight System Inc. Leebove declined comment on the specifics of any wage gap, but says he doesn't believe the UPS Freight wages were "significantly different" from its rivals'. Leebove adds that UPS Freight workers will receive wage increases in 2011, 2012, and 2013.
Fading relevance
The campaign will play out against the fading relevance of Teamster labor in the transportation industry. While overall Teamster membership has dropped from 2 million to 1.4 million, the freight division's rolls have plummeted from about 500,000 in the late 1970s to about 50,000 to 60,000 today. The division, once considered the union's core, has been weakened by hundreds of bankruptcies among unionized carriers and the growing reliance on non-union labor. About half of the division's members work at YRC, a company that remains financially fragile.
The candidates have all vowed to re-energize the freight division. However, they have so far pledged to do little more than step up organizing efforts at non-union carriers like FedEx Corp.'s ground parcel and LTL divisions, a strategy that has gone nowhere in the past. There is talk about organizing the thousands of owner-operator independent drivers operating around the country, especially at the nation's ports, where they have strong drayage operations. However, with no large employer to focus on, such organizing efforts would be fragmented and perhaps futile.
Pope says she would examine the expanding relationship between UPS and the U.S. Postal Service, under which UPS turns over shipments to the post office for deliveries to mostly remote destinations. The agreement, made possible by the requirement that USPS serve every U.S. address, allows UPS to reach more customers without the expense of dispatching its own drivers. However, Pope says the compact violates the Teamster contract and threatens traditional Teamster jobs in regions of the country already hard-hit by the recession.
Ace in the 'Hall'
Unlike Hoffa and Gegare, who are running with a slate of candidates, Pope is going it alone. She has no slate of officers, and relies on a staff that, as recently as May, consisted of two part-timers and staff time donated by Teamsters for a Democratic Union (TDU), a dissident group that supports her candidacy. Pope says she has a large grass-roots volunteer network and holds conference calls at nights and on weekends with Teamster members nationwide. She says that she will rely on social networking tools to build critical mass.
In 1991, TDU backed the candidacy of the late Ron Carey, who was elected president in a stunning upset. While Pope and TDU hope lightning can strike twice, Leebove of the Hoffa camp says the comparisons between the two eras don't stand up to scrutiny.
For one, Carey ran against a splintered field after the incumbent at the time, William McCarthy, declined to seek another term. By contrast, Pope is facing a two-time incumbent in Hoffa, Leebove says.
In addition, Carey, as a long-time UPS employee, built on a groundswell of support among the company's rank and file, Leebove says. Pope doesn't have that embedded base, Leebove claims. Carey also had about 12,000 members in his local—Local 804 in New York—while Pope has slightly more than 1,000 members in hers, he adds.
"Ron Carey was by far a more significant player than Sandy Pope," Leebove says.
In a nod to the importance of nearly 250,000 unionized UPS workers, Hoffa has named as his running mate Ken Hall, who for years was director of the Teamsters' small parcel division and was one of the architects of a 1997 job action that shut down UPS for 15 days.
Leebove says Hall is "regarded as a hero" by workers at UPS and throughout the union for standing up to the Atlanta-based giant and still wields considerable influence. The choice of Hall is "a major game changer," he says.
Ken Paff, TDU's national organizer, agrees that Hall's connection with UPS Teamsters was a key factor in his selection as Hoffa's number two. However, Paff says the Hoffa campaign may be misreading the rank and file's likely reception of Hall, contending the most recent UPS contact, negotiated in 2007, was "not that popular" with members.
A full agenda
The winner of the November election takes the chair in January 2012 and almost immediately will need to gear up for events in 2013 that could chart the union's course for years to come: negotiating new contracts for workers at UPS's small-package operations, at UPS's LTL division, and at YRC. The three contracts combined will affect about 275,000 members, equal to nearly 20 percent of Teamster membership.
"UPS and the NMFA are the heart of the union, and it's what everybody will be watching," Pope says.
One person who will certainly be watching is Scott Davis, UPS's chairman and CEO, who will oversee the upcoming 2013 contract negotiations. In light of UPS's tradition of limiting its chairmen to negotiating only one Teamster contract during their tenure, this will be Davis's one shot.
Davis, for his part, seems happy with the way things are. "The relationship with the Teamsters is better than it's ever been before," he told an analyst group in June.
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."