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Transcript
Dr. Terry Esper of The Ohio State University
David Maloney, Editorial Director, DC Velocity :
Combating racism directed at Black delivery drivers. USMCA starts soon at a border crossing near you. And though we are in a pandemic and recession, investment firms love logistics.
Pull up a chair and join us- as the editors of DC Velocity discuss these stories, as well as news and supply chain trends on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by Fortna. Fortna partners with the world's leading brands to transform their distribution operations to keep pace with digital disruption and growth objectives. Known worldwide as the distribution experts, Fortna designs and delivers intelligent solutions powered by their proprietary software to optimize fast, accurate, and cost-effective order fulfillment. For more information visit Fortna.com.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insight into the top stories of the week. But to begin today, I'd like to introduce our guest. Dr. Terry Esper is an associate professor of logistics at the Fisher College of Business of The Ohio State University. He is a published author in various academic and managerial publications on topics ranging from retail logistics to supply chain management strategy. And recently he penned two articles that are appearing on the websites of Supply Chain Quarterly and DC Velocity on racism that Black drivers face when trying to make deliveries.
Welcome, Terry, and thanks for joining us.
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Thank you, David. So good to be here today. Thank you.
David Maloney, Editorial Director, DC Velocity :
We've seen around the nation the protests against racism and violence directed toward African Americans, as well as other minorities, and within our own industry, as you pointed out in your articles. We also have a long way to go in assuring equality. What prompted you to write the articles?
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
That's a great question, David. You know, I've actually been thinking about this topic for quite some time. We have seen stories over the years where, you know, black drivers—particularly for major companies, major delivery companies, like your UPSes and FedExes of the world—have experienced some issues with harassment in the process of attempting to make deliveries. And so I've seen these stories, you know, in pieces over the years, but over the last several weeks, we had noticed that these stories were starting to pick up, and started to notice a trend in the news where more stories were starting to emerge involving Black delivery drivers experiencing issues when attempting to make deliveries. And so I would say that was kind of the impetus of writing the articles.
I would, also, of course, have to acknowledge that just the environment of today with the protests around the George Floyd incident, that really also added to the sense of urgency that I felt. And just ultimately feeling that it was a time that we needed to have conversations around how these issues around race matters really do show up in logistics.
David Maloney, Editorial Director, DC Velocity :
And of course, this kind of racism has been with us for a long time, but we have video now, that actually shows what is happening out in the field. Can you give some examples of some of the hatred that's been directed towards Black drivers?
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Sure. And in many cases, I've been noticing some trends.
So primarily, the trends that I've noticed across the incidents that have occurred and that have emerged in the media are situations where drivers are harassed in terms of their their legitimacy to be in certain neighborhoods. And so we've seen several stories, where Black delivery drivers were held up by members of neighborhood communities, being interrogated in terms of their purpose for being in those communities. In fact, there's a very interesting story of a young UPS driver that was basically approached and told that he looked suspicious for being in a particular community, even though he was in a full UPS uniform and full UPS truck full of UPS packages. But yet he was told that he looks suspicious, and that he was perhaps a potential crime threat. So we've seen that.
We've also seen issues where there has just been, you know, maybe what some would consider to be over-policing of Black delivery drivers in the process of attempting to make deliveries and trying to make those deliveries more convenient for delivery recipients. So there was a story that just emerged a few weeks ago where a young man was parked on the wrong side of the street. And that led to a whole ordeal. And with the onlooker saying, like, "Hey, this guy is just a delivery driver. He's just trying to do his job." Yet he ended up being arrested, and there was even a threat of a felony charge because he was parked on the wrong side of the street. It precipitated from that.
So ultimately, what we've seen has just been a series of stories that have shown, where Black delivery drivers have experienced interrogation and harassment, as well as perhaps even some degree of what people would call policing.
David Maloney, Editorial Director, DC Velocity :
So in a way, this is actually just systemic from the problems that we see within the culture itself, of people viewing black men as being a threat, as opposed to just somebody doing their jobs.
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Yeah, I think so. And I think that's the ugly side of this, you know, ultimately, when we really pause and say, well, try to peel back the layers of why this is occurring. And as a Black man myself, you know, what I wrote in the very first piece was, the reason why I became particularly concerned about this is that I know that in some pockets of society, my physical presence is viewed as a threat.
Why I really became, also why this interest really unfolded, was even when we think about what's happening in the last-mile delivery space—so again, we've seen these harrassments of drivers of UPS and FedEx trucks, but what about what we're seeing in terms of crowdsourcing? So now they have a lot of plainclothes, unmarked vehicles arriving at homes with package deliveries. And, you know, again, these persons don't get the benefit of a UPS truck with a big logo or a brown uniform. And so they're plain-clothed. And I think that even further heightens the reason why we need to have this conversation.
But you're right, David, I think the unfortunate part of this is that there are still some conversations that we need to have in society at large, around biases and how those biases show up in something as simple as a delivery attempt.
David Maloney, Editorial Director, DC Velocity :
Do you see this in other areas of the supply chain as well, where racism is prevalent?
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Yeah, I think that we have more stories and more issues to discuss, to be honest. I think this is just one portion of a larger conversation around some of these issues. And, you know, I used to work in a distribution center. I was on the second and third shift and seeing where some of these issues played out in facilities, where you have the jokes and the stories and the conversations, and the slangs, and the slurs. And I think that there are some conversations that we need to have in our community that really deal with the issues of race matters head on. And I think if there was ever a time that we needed to have those conversations, it would be now.
David Maloney, Editorial Director, DC Velocity :
How do we start those conversations and get others involved?
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Yeah, well, you know, in fact, that was one of the reasons why I decided to pen those those few articles, was to at least start to unfold and unpack the narrative.
I think a lot of these conversations have been lurking in many ways, and many of these conversations have maybe gone a little—these issues have gone untapped, because we just haven't been willing to talk about them. I mean, let's be honest, talking about race matters and issues of racism, those are charged conversations. You know, there is, it's not an easy conversation. But I do think if we are willing to operate with good intentions, these are conversations that we can have, and we must have. But, I mean, it's not easy. It's not easy. These are tough conversations, and it causes us to, in terms of how we do it, we need to just roll up our sleeves and just agree to jump out there. And as long as we have good intentions and we're trying to improve, conversations are worthy of having.
David Maloney, Editorial Director, DC Velocity :
I agree. In the second article that you penned, you had talked about some of the ways that we can help assure safety for drivers when they're making their deliveries. Can you highlight some of those things that you think can be done to help ensure that safety?
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Sure, yeah. I think the number-one issue that I mentioned, and it's the one that I feel the most passionate about, is just this overall empowering of drivers to be able to report these incidents.
You know, what I found very interesting was, in my research for those articles, and just looking at some of the testimonials and getting the voice of the driver, what I found is that some of these issues occur quite frequently. Now, they may not be as egregious as some of the things that we've seen in the videos that have recently emerged or the news stories that have recently emerged, but the reality is that there are feelings of bias and discrimination that Black drivers have felt for quite some time. So I think just, you know, the conversation around the culture within our community—and I say "our community" as the logistics community—you know, is this just something that's a given? Or are we willing to think about how we can be more welcoming to drivers being able to report these incidents, and then feeling that something will be done about it?
So, you know, the rest of those examples were—or those suggestions—were things that could be done about these issues. So, for example, such things, as making sure that Black drivers have branded equipment. Although we do see these issues taking place with folks and full uniforms and branded delivery package vans, the reality is that a lot of companies are using third-party providers with unmarked vehicles. And so maybe ensuring that those drivers have branded equipment so that that could further, maybe, reduce the likelihood that they might experience some of these issues.
You know, some companies have even gone so far as to flag certain customers as being problematic to deliver to, and have even denied service. And so I think that's something that we also need to talk about, whether or not that needs to be something that we fold into the communication.
But ultimately, I think this idea of empowering drivers is where there is a lot of really good opportunity, and where maybe some things can be done almost immediately.
David Maloney, Editorial Director, DC Velocity :
All right, great. Thank you, Terry. We've been talking to Dr. Terry Esper, an associate professor of logistics at The Ohio State University. Thank you, first of all, Terry, for providing us with your articles and your insight, and then for keeping this important conversation going.
Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University :
Thank you so much, David. It's been an honor. I've been humbled by it and I appreciate the partnership and having further conversations about this topic.
David Maloney, Editorial Director, DC Velocity :
As do we. And listeners, we'd also like to know, be interested to learn if you or one of your drivers or warehouse employees have faced similar racism of the kind that we've been discussing today, and we welcome you to share that with us, or any other comments you may have, by emailing us at podcast@dcvelocity.com.
We also want to let you know that you can read Terry's articles online as SupplyChainQuarterly.com and DCVelocity.com, as well as a reprint that will appear in the July issue of DC Velocity. Thanks again, Terry.
Now let's turn to some of the other supply chain news from the week. Victoria, you reported this week on the USMCA, which of course is the United States-Mexico-Canada Agreement that goes into force in less than two weeks from now. This replaces a 26-year-old North American Free Trade Agreement better known as NAFTA. And this begins its regulatory life during a very challenging supply chain environment. Victoria, can you tell us how the USMCA will affect cross border transactions?
Victoria Kickham, Senior Editor, DC Velocity :
Absolutely. I have to to say, Dave, I'm no expert on the intricacies of it, but what we wanted to find out was sort of how the logistics industry is dealing with this. So I spoke to a couple of different people from the transportation and third-party logistics space about what they're doing and sort of the things they're doing to help their customers prepare for this.
There are a few things. What the people that I spoke to said was, anytime there's a new regulation that comes into play, it's challenging, but, as you pointed out, the Covid-19 pandemic just complicates everything. It makes this sort of just one more issue that companies are dealing with. You know, they were dealing already with closures and supply chain disruptions, so sort of having to educate yourself on this new regulation is just another issue.
So—but yeah, so the transportation and 3PLs that I spoke to emphasize the importance of first reviewing and understanding the rules of origin. And this is something that's changed—that will change—with USMCA, and that's regarding the amount of content in particular good—your product—that has to be sourced from North America in order to achieve a zero tariff level It all affects the level of tariff that's applied to your goods. So one person that I spoke to really emphasized that you can't assume that, just because your product applied—are compliant—under NAFTA, that it will under USMCA. So really, just emphasize the importance of understanding the rules of origin for your goods.
USMCA really affects different industries in different ways. Automotive, chemicals, pharmaceuticals, and cosmetics industries are some of the ones that are most affected. So really, first and foremost, understanding those rules, and then communicating it internally and externally with your freight brokers and partners. That was the first thing. There are many other challenges, but that's sort of what people are dealing with right now.
David Maloney, Editorial Director, DC Velocity :
Overall, will cross-border shipments look any different on July 1 than they look today?
Victoria Kickham, Senior Editor, DC Velocity :
Well, the people I spoke to said pretty much, no. Everything should pretty much look the same. And if you've done the research and the homework, you're prepared, it should pretty much run smoothly, but there can be disruptions.
The biggest change, from what they're telling me, is in documentation. So with NAFTA, there was a specific compliance form that you would submit. USMCA, there's not one form. There are multiple formats that you can submit your compliance with, including electronically. So again, they emphasize the importance of sort of communicating internally and externally and having a standard procedure in place so that you and your your business partners are doing everything the same way and it makes things just that much smoother.
David Maloney, Editorial Director, DC Velocity :
Well, hopefully the transition to the new processes will go smoothly for shippers and carriers.
Ben, you reported that despite the pandemic and the recession that we're involved in, that venture capital funding continues to flow to logistics tech. Could you share some examples of those investments?
Ben Ames, Senior News Editor, DC Velocity :
That's right, Dave. And it's unclear whether the increase in investments here—or a continuation of investments—is in spite of the pandemic, or maybe it's a part of some of the real spikes that we've seen in demand by folks who are working and living at home more often, here, for certain types of products, whether it's online groceries, whether it's, you know, personal protective equipment and cleaning equipment supplies.
One of the biggest ones came just yesterday. It was [a] $200 million investment in a Chinese company called Geek+, which has been around for a little while. They make sort of rolling, squat units that move around the floor, a little bit like a Roomba vacuum. Some of them have different masts and vertical extensions that allow them to carry bins and crates on them as well, or, as well, to attach tablet, touchscreen tablets on them, to make it easier for pickers to identify exactly what's on their list.
And that follows a $40 million that came to Locus robotics, which makes a similar sort of fleet of AMRs— autonomous mobile robots—that move around warehouses and assist pickers. It seems like there's a real interest in investing in some of the mechanics that help companies really do the material handling and cope with some of the spikes that are created by the pandemic, or other reasons, for the year.
David Maloney, Editorial Director, DC Velocity :
Warehouse robotics aren't getting all the venture capital dollars, though. Are investors also backing other types of logistic startups?
Ben Ames, Senior News Editor, DC Velocity :
Yeah, that's a really good point. It's interesting that there's a little startup in Texas called CognitOps, and they got $3 million in venture capital funding. That's a lot less than the 200 million or the 40 million that we were just talking about, but they're a newer, smaller company. But, again, they touch on some of the same issues, because this company makes software that allows a warehouse execution system or warehouse management system to deal with this incredible growth in the number of robots that are moving around. Because all of a sudden you're software platform has to cope with a much greater variety of machines than it used to when it was just sort of a dock door and a conveyor, maybe. Now there can be, you know, tens or dozens of different types of technology platforms, you know, moving around the building.
But by the same token, there's a yard-management company called Pinc—P-I-N-C—that's been around for some time. And they landed what they're calling a significant private equity investment from Accel-KKR, the well-known investment firm, and that's backing PINC to to be able to grow itself organically, which means developing its own products, as well as maybe go[ing] on the acquisition trail.
And look forward to, maybe, some consolidation of that sector. And so, we could see some of the money that's flowing into there moving toward building some some bigger and bigger companies—again, that can go toward handling these spikes.
David Maloney, Editorial Director, DC Velocity :
Well, obviously it looks like investment firms are seeing the essential nature that supply chain offers during the pandemic and all the time, and looking to make some increasing investments in that technology. Thank you, Ben.
We encourage listeners also to go to DCVelocity.com for more on these and other supply chain stories, as well as our continuing Covid-19 coverage and list of resources. That's all available on DCVelocity.com. So go there to check it all out.
Thanks, Ben and Victoria, for sharing highlights of the news this week.
Ben Ames, Senior News Editor, DC Velocity :
Thanks, Dave. It's always good to be on.
Victoria Kickham, Senior Editor, DC Velocity :
My pleasure. Thank you.
David Maloney, Editorial Director, DC Velocity :
And again, our thanks to Dr. Terry Esper from The Ohio State University for being our guest today. We encourage your feedback on this topic and other stories, and again, you can email us at podcast@dcvelocity com.
And remember that Logistics Matters is sponsored by Fortna. Fortna partners with the world's top brands to transform distribution operations into competitive advantage. Expertise includes distribution strategy, DC operations, micro-fulfillment, automation, and intelligent software. Distribution solutions designed today for tomorrow's challenges. Learn more about the distribution experts at Fortna.com.
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