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XPO stung by New York Times story on warehouse work conditions

Photo: XPO

 

Every quarter, Brad Jacobs, XPO Logistics, Inc.’s chairman and CEO, rings up a cluster of journalists to discuss the company’s financial results and to field as many queries from each as time allows.

 If the New York Times had been on Jacobs’ list of outlets, by now it has probably been deleted.

 The Times took Greenwich, Conn.-based XPO to the woodshed in its Sunday edition, writing that pregnant workers at its Memphis warehouse are often subjected to excessively demanding work conditions, that supervisors pay no attention to doctors’ written requests to be shifted to less strenuous work, and that the practice of being on their feet and carrying heavy shipments has led to miscarriages at the facility.

XPO executives were stunned by the story’s damning narrative. There have been no reports of such incidents at the warehouse in the four years since XPO took control of it, according to company officials requesting anonymity. XPO said its executives found no record of such incidents at the time they performed due diligence on the warehouse’s then-owner, New Breed Logistics, a contract logistics provider acquired by XPO in September 2014.

An XPO spokesperson issued the following statement on the Times story:

“A recent story is critical of one of our facilities in Memphis and makes untrue allegations about working conditions. A thorough review of these allegations found that they are unsubstantiated and filled with inaccuracies. The truth is that we prioritize safety and respect in our diverse workplace above all else, and we have absolutely no tolerance for any type of discriminatory behavior. We deeply care about all of our employees, and work with our pregnant employees and their supervisors to adjust work assignments and schedules.

“XPO has many different ways to report claims of workplace misconduct without fear of retaliation, including an anonymous hotline, that are available to all employees. The claims in the recent story were never reported. These false allegations run counter to our values and do not reflect the way in which our Memphis facility operates. The misleading allegations directed at our Memphis facility are fueled by the Teamsters and are part of its ongoing, but unsuccessful, attempts at organizing XPO.”

According to the story, the incidents began during New Breed’s ownership and continued after XPO took control of the facility, which is operated exclusively for telecom giant Verizon. Workers who thought working conditions would improve under XPO were soon confronted by supervisors who demanded they pack 120 boxes an hour instead of 60, and who would penalize employees for spending too much time in the bathroom or on breaks, according to the story.

The Memphis warehouse has been a lightning rod of controversy since the summer of 2017, when, according to the Times story, workers began complaining about temperatures routinely exceeding 100 degrees and the heat and humidity making it sometimes hard to breathe. On Oct. 17, Linda Neal, a 58-year-old worker, collapsed on the floor and died of a heart attack. Neal was suffering from health issues, and her son told the Times that her supervisors had denied her permission to leave early when she felt poorly.

The Teamsters union, which earlier this year launched a campaign to organize employees at warehouses and distribution centers in the U.S. and abroad seized on the episode as a sign of the company’s uncaring attitude towards its warehouse workers. XPO, which has dramatically increased its warehouse footprint as part of an aggressive expansion strategy that has made it a $15 billion a year revenue company in seven years, is the prime target for the union’s organizing efforts. A source close to XPO said Teamster General President James P. Hoffa has directed a great deal of union attention to expose work conditions at the Memphis warehouse.

The union has been locked in a long-running battle to organize XPO worker at its less-than-truckload unit and has crossed swords with the company for alleged job misclassifications of port drivers on the West Coast. Teamster officials did not respond to requests for comment on the Times story.

Warehouse working conditions have taken on a higher profile as e-commerce growth puts greater focus on fulfillment speed and efficiency, and workers are pressured as never before to increase throughput. Allegations of employee mistreatment have also made headlines; an author who went undercover as an employee at an Amazon.com. Inc. warehouse in Britain for a book on low worker wages reported that some line workers would urinate in bottles for fear that bathroom breaks would force them to miss their volume targets. Amazon has denied the allegations.

Brian Devine, who runs ProLogistix, a company that places hourly workers in warehouses and distribution centers, said he had never heard of a case where conditions were so adverse that they would trigger miscarriages. “Most companies make the `reasonable accommodations’ (for workers) required by employment laws,” he said. “But moreover they do it because it’s the right thing to do.”

Low wage levels have long been an obstacle to recruit warehouse workers, though wages have been rising briskly in the past 2 to 2 1/2 years as the economy improves and big box facilities demand more workers. According to Devine, the average hourly pay rate stand at $13.48 an hour, a significant improvement over the past 30 months. Still, even wages at $14.20 per hour only gets employees back to where they were in 2002 when inflation rates are taken into account, according to ProLogistix data.

Devine said he’s unsure where worker wage rates will flatten out, saying the market is in “uncharted territory.” Moves by Amazon to boost its minimum wage to $15 an hour could push warehouse wages even higher, he added.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

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