Tuesday, December 21, 2021

"Stuffing Ourselves​ | Amazon, the Postal Service, and the Tyranny of Logistics" (AMZN)

After seeing the Amazon warehouse in Illinois where six employees died when a tornado hit and they had not been evacuated, and the Amazon delivery drivers who were told to keep driving through a tornado warning (meaning a tornado had actually been seen by weather spotters or by first responders) I am ready to believe pretty much any horror story about how AMZN treats their employees.

And tangentially related, here's one of the employee entrances to the company's flagship Kent, Washington warehouse from a 2018 Seattle Times story:


Workers enter the Kent warehouse through turnstiles below a company greeting. They are not allowed 
to bring in phones, keys or belts, and go through an airport-style metal detector when they leave. 
(Alan Berner / The Seattle Times)

Picking up a bit of a "Work will make you free" vibe.


From  The Drift:

Issue 5  | September 27, 2021 

There is a delivery service that employs around half a million people in the United States. It delivers billions of packages per year to tens of millions of addresses. It has hundreds of warehouses and sorting facilities, and its packages travel on thousands of identical trucks and vans. The delivery service has the extraordinary ability to get a box from one side of the country to another in just a few days. Some politicians call it a monopoly, but it nevertheless enjoys high approval ratings among most of the American public. The delivery service is one of the most essential features of modern life, and indeed it makes modern life possible. In the year 2020, we relied on it more than ever.

I am talking, of course, about the United States Postal Service, but you would be forgiven for assuming I was describing Amazon. It would be an overstatement to say that the two entities do the same thing, but it is quite reasonable to say that they do many of the same things. Most notably, they both ship stuff from one place to another. Despite what you may have heard to the contrary, the world has not transcended stuff. It still runs on stuff, and stuff, to use a voguish word, is non-fungible. It cannot be changed or transmogrified. It can, however, be moved around.

Amazon and the Postal Service are often said to have some sort of “relationship” with one another, but there is much disagreement about how to characterize their bond. Those who defend public services argue that the USPS is good and Amazon is bad, while champions of private business respond that the USPS is bad and Amazon is good. The former argue that the USPS is in thrall to Amazon, which provides the service with a huge amount of revenue; the latter claim that Amazon is in thrall to the Postal Service’s monopolistic delivery network. The dynamic could be symbiotic. It could be parasitic. It could be mutualistic. It depends.

Essentially, Amazon is a website where people order goods. When you order stuff, Amazon has to get the stuff to your house. The company accomplishes this by loading the stuff on trucks and airplanes and shipping it to a huge warehouse near your neighborhood. Once the stuff gets to the warehouse, someone sorts through it. Someone else, perhaps several someones, is then paid to bring the stuff from the warehouse to your house. Sometimes those people are employed by a private company like UPS or FedEx, but just as often they are government employees who work for the United States Postal Service. What distinguishes the Postal Service from these other carriers, and what makes it useful for Amazon, is that it is required by law to deliver to every address in the United States. 

The increasing isometry between the two entities can sometimes foster confusion in the customers they serve. You order an item from Amazon without checking whether it will be FedEx, UPS, the USPS, or Amazon itself that ferries the package to you. Without looking at your order history, do you feel that you could catalog with confidence which delivery services have dropped which items on your porch? Could you estimate offhand whether there are more USPS trucks or Amazon vans delivering packages in your neighborhood? 

The functional overlap between Amazon and the USPS belies climacteric differences in how the two entities treat their workers. In recent years, the allegation that Amazon effectively requires its workers to piss in water bottles has taken on an almost talismanic centrality in any discussion of the company’s labor practices: in 2018, a former Amazon warehouse worker went viral for tweeting that when he had left the company in 2015, “there were bottles & bins full of piss at odd points, bc you were penalised for toilet breaks.” The anecdote was picked up by Rep. Alexandria Ocasio-Cortez, who asked in 2019 “why Amazon workers have to urinate in bottles & work while on food stamps.” This past March, when Rep. Mark Pocan tweeted, “Paying workers $15/hr doesn’t make you a ‘progressive workplace’ when you union-bust & make workers urinate in water bottles,” the Amazon PR team swiftly rejected the charge, only to apologize and backtrack, admitting that its initial denial had been “incorrect.” 

Amazon’s inhumane treatment of its workers is not incidental — it’s an essential feature of how the company operates. Earlier this year, a group of workers at a company warehouse in Bessemer, Alabama filed to hold a unionization vote. As the election approached, Amazon deployed a bevy of union-busting strategies that were so desperate and creative as to seem almost personal. The company offered buyouts to current employees, blanketed the warehouse with anti-union propaganda, and — in a manner reminiscent of The Italian Job — even installed a USPS mailbox on the warehouse grounds in an apparent attempt to make workers think their bosses were monitoring the mail. The warehouse workers voted against the union by a margin of more than two to one. “I work hard for my money, and I don’t want any of it going to a union that maybe can get us more pay, or maybe can get us longer breaks,” one worker explained to a reporter.

A longshot union drive at a single site in Alabama did not constitute a material threat to the profits of a $1.8 trillion global conglomerate, but it did represent a kind of ideological threat to the Amazon way. Embedded in the genetics of the company is a thirst for what in the world of logistics are called “efficiencies” — minuscule operational tweaks that can save a marginal amount of labor, resources, time, or money somewhere in the supply chain. Amazon routes its packages through a massive and sui generis network of sorting facilities to avoid paying contractors and middlemen. It uses mountains of data to prestock and presort items. It tracks successful items sold by third-party vendors, and clones those items so it can sell them through its own private-label brands. Together these efficiencies are more than the sum of their parts — in other words, they have allowed Amazon to obtain a world-swallowing competitive edge through the marginal reduction of operational outlays. If workers suffer, pass out, and die as a result of those reductions, that is, in a literal sense, the cost of doing business.

The most obvious result of Amazon’s obsessive focus on cost efficiencies is that the company became really, really, really big. Amazon employs more people than live in Raleigh, Oakland, or Miami, and the combined area of its real estate has grown more than fiftyfold over the past twenty years to at least 300 million square feet. It accounts for more than half of all digital retail sales in the United States and around ten percent of all retail sales, period. The towering corporation has cast a long material shadow through the country, and earlier this year a new book from the political journalist Alec MacGillis offered the fullest portrait of its influence to date. Fulfillment: Winning and Losing in One-Click America attempts to trace what economists might call the “negative externalities” of Amazon’s power. MacGillis follows black families priced out of gentrifying Seattle, homeless workers in Dayton riding the city’s corrugated cardboard boom, and suburban neighbors in Virginia trying to prevent the construction of an enormous Amazon data center. One of the most shocking chapters follows the company’s almost colonial invasion of the city of El Paso, Texas, where Amazon killed off local office supply businesses by bribing and bullying third-party competitors. 

MacGillis links Amazon’s rise not just with the obliteration of individual families and towns, but also to a growing divide “between a handful of winner-take-all metropolises and a large number of left-behind rivals,” a dynamic that is “making large parts of the country incomprehensible to one another.” Indeed, Amazon has become so massive and so powerful as to serve as a kind of synecdoche for the modern economy. Its gravitational pull feels less like that of an individual firm than that of an entire market. First it took on independent bookstores, then retailers like Staples and Bed Bath & Beyond, then private carriers like FedEx and UPS — and now, through the Postal Service, the government itself. 

MacGillis argues rightly that the company only got so big because it cut corners and exploited workers, but there is something else going on here, something so omnipresent that it’s hard to see. It’s the reason package volumes at FedEx, UPS, and the USPS have grown even as Amazon has eaten up more and more of the delivery market, the reason cargo freighters are getting larger and delivery trucks of all kinds are becoming more plentiful. Amazon, “the everything store,” is selling something that many people seem to want — stuff, all kinds of stuff, delivered fast and at low cost. Everyone buys stuff, and for many years they didn’t seem to care all that much about who got it to them, or how they got it to them, or who got hurt in the process....


The not-paying-sales-tax angle was a pretty big part of the story as well.

It's tough for the bricks and mortar retailer to compete when AMZN has that advantage, over 10% in California, 8.875% in New York City.