Two delivery companies in the Portland, Oregon, area have quit Amazon (NASDAQ: AMZN). Last Mile Delivery and Triton Transportation stopped hauling packages for the e-tailer last week and the attorney representing both companies told Modern Shipper that litigation against Amazon is being considered for breach of good faith and fair dealing and interference with economic relations.
In a statement to Modern Shipper, an Amazon spokesperson said the last-mile delivery companies terminated the relationship after Amazon refused to meet a demand for $36 million in payment.
“Last week, two delivery service partners (DSPs) abruptly threatened to stop servicing the Amazon account and jeopardize the livelihood of their drivers if we did not pay them $36 million within 48 hours along with a string of other demands,” the spokesperson said. “We refused their demands and they followed through with their threat, terminating their contract with us, leaving their employees confused and looking for answers.”
Portland-area attorney Thomas Rask, of the law firm Kell, Alterman & Runstein LLP, who is representing the DSPs, told Modern Shipper the two companies employed 157 drivers combined. Rask provided Modern Shipper with a copy of the complaint detailing concerns and issues Last Mile and Triton had with Amazon. He confirmed the companies asked Amazon for money but did not confirm the amount.
“We did demand compensation for us and our drivers,” he said. “The idea was to pay people back for what they had gone through and they ignored us.”
According to The Oregonian newspaper, Tracy Bloemer, co-owner of Last Mile Delivery, sent a letter to her drivers on June 23 saying the company would no longer service the Amazon account and suggesting the dispute had to do with money.
“Amazon has been nickel and diming us so bad that if we don’t make change we can no longer offer the support and incentives that thus far we have been able to provide. This leaves all of you without help to do over 200 stops while getting paid less to do so,” she reportedly wrote.
The Oregonian reported the two companies combined delivered approximately 22,000 packages a day for Amazon. The Amazon spokesperson said the company was “doing everything we can to support the affected employees, including connecting them with other Delivery Service Partners in the area who are hiring,” and that service in the area was not likely to be impacted.
While Amazon has been known to terminate contracts with DSPs for underperformance or safety reasons, it is not often that a DSP terminates a contract. Amazon works with more than 2,000 DSPs employing 115,000 drivers across the U.S. The company has invested more than $450 million in safety technologies for vehicles, driver safety training and higher wages. It said the average DSP driver makes $17.50 an hour across the network.
The complaint states that in April “Amazon unilaterally reduced the rate card reimbursement rate from $17.25 to $16.00. As a result, Last Mile and Triton either had to (1) reduce their drivers’ wages in the middle of a pandemic or (2) continue to pay the expected $18.00 wage to their drivers without reimbursement and incur even greater losses.”
Last Mile and Triton pay drivers $18 per hour, according to the document.
The complaint also states that Amazon has near total control over the operations of the DSPs’ businesses, including the ability to terminate drivers without input from the DSPs and scheduling business deliveries on weekends even when businesses are closed, only to penalize drivers for their inability to deliver the packages.
The document further details concerns over Amazon’s control of the DSPs’ drivers, routes, clothing and grooming and what it said are arbitrary metrics and bonuses that are based on a matrix that “Amazon repeatedly refuses to provide any information whatsoever” on.
In all, there are more than a dozen detailed complaints that Rask said add up to risk and make operating the businesses profitably more difficult.
Expectations increases risk
“Drivers who are constantly in a hurry on the road put the public at risk as well. Amazon’s relentless, demanding and unconscionable workload is causing injuries to drivers, putting the public at risk and exposing Last Mile and Triton to significant legal liability and substantial additional costs,” the document said.
Both Last Mile and Triton entered into DSP agreements with Amazon in 2019, “however, Amazon’s conduct over the past two years has become intolerable, unconscionable, unsafe, and most importantly, unlawful.” The document further states that “over the last two years, Amazon’s unconscionable and unlawful conduct has permeated nearly every aspect of Last Mile’s and Triton’s operations.”
Rask said the two DSPs requested a number of changes from Amazon, including limiting routes to 8.5 hours (drivers are paid for 10 hours maximum on a route, even if it takes longer to complete, the document stated), a max of 150 stops per route and a max of 250 packages per van, with exceptions made for bulk deliveries. The companies also wanted changes made to the rate card and allow the DSPs to maintain control over its employees, including hiring and firing decisions.
The firms also asked that Amazon make commitments on routes instead of the current process in which drivers have no work on days when there are not enough packages. Under Oregon law, the DSPs must schedule the drivers at least six days in advance, but neither company knows until a day or two before whether there is work for that driver. On days when there are no packages, the DSPs must pay the drivers under state law although Amazon isn’t required to reimburse the DSP for the day’s wage.
Amazon has in the past severed ties with DSPs, coming under fire for doing so. While Amazon rarely offers specifics, safety or customer service can be a reason. In August 2020, FreightWaves reported on the termination of TL Transportation’s contract with Amazon. The company was embroiled in a lawsuit at the time regarding a physical altercation one of its drivers had with a New Jersey homeowner.
FreightWaves’ Clarissa Hawes reported at the time that Amazon had cut providers employing more than 3,000 drivers in 2020 up to that point. During a similar purge of logistics providers in February, an Amazon spokesperson alluded to safety as a top concern for the e-tailer.
“Prior to launching the Delivery Service Partner program to empower entrepreneurs to build their businesses with Amazon, we contracted with a number of small logistics companies,” a spokeswoman said. “Some of these companies have not met our bar for safety, performance or working conditions, and we’re in the process of exiting them from the program.”
The camera sees all
Earlier this year, it was revealed that Amazon planned to use in-vehicle cameras to record which DSP drivers were wearing face masks. Following an outcry about the proposed program, Amazon ditched the effort, which followed a letter from five U.S. senators, including Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., to Amazon CEO Jeff Bezos questioning the e-commerce giant on its plans regarding privacy concerns over the installation of the Netradyne Driveri camera system.
“Although community and automobile safety are of the utmost importance, they must not come at the expense of workers and the public’s safety, privacy and well-being. We are concerned that adding further surveillance tools and monitoring could increase dangers on America’s roads, place unsafe pressure on drivers and infringe on individuals’ privacy rights,” the letter stated.
Amazon plans to use the in-vehicle cameras to monitor safe driving behaviors, including distracted driving. In a recent training video, however, the company added mask wearing as one of the behaviors it would monitor, The Information reported.
Amazon said that piloting of the Netradyne camera system on over 2 million miles showed a 48% decrease in accidents, a 20% decrease in stop sign violations, a 60% decrease in driving without a seatbelt and a 45% decrease in distracted driving.
The Netradyne Driveri platform utilizes in-cab cameras, artificial intelligence and machine learning in an Edge computing environment to monitor and record driver behaviors in real time. Its cameras can recognize speed limit signs, stoplights and stop signs, pedestrians and other objects and add context to events.