Walmart threatens to cut ties with truckers that also haul for Amazon
livetrucking.comI've posted before about Walmart and I'll post here again. They routinely would pay us late and underpay invoices on delivered products. Sometimes racking up to $50-$100,000. The worst part for us is it would be an average of one year before they would pay it in full. You'd have to submit a claim and fill out endless paperwork to get paid. It was so hard on us as a company. You also had to pay them a per package fee that added up to a lot per year. No other company was doing this.
With Walmart trucking things were worse. If we delivered a product and it arrived not well, you had limited options on checking the reasons why. Several times we wanted to pull the temp recorder and just by doing that Walmart charged us around $1000 if we lost. On several occasions our own temp recorders were taken off of our product and were lost when we challenged their rejection of product, and in this case we lost. Even though the product shipped pristine. When our temp recorders were found on the product it showed that it did not ship under the terms of the agreement. In this case we won.
Again, to challenge this with Walmart I had to call or email more times then I could count. I always felt they purposely made it difficult.
This seems like anti-competitive behavior. When a duopoly exercises this kind of power, does it come under the purview of the FTC or some other oversight org?
One thing is to squeeze profits out of people, but it's another to say you cannot sell your services to anyone but me, is it not, unless there is some kind of contractual clause committing you to them, but given their size that still might be concerning?
Abuse of a dominant market position can carry a hefty price tag. I wonder whether they really thought this through.
Does current economic theory include this common malfeasance among successful dominant businesses as efficient?
I don't think current economic theory even takes these common malfeasances into account. This is against the law, and so no widely accepted theory would even acknowledge this.
Yeah, at best the theory will assume this kind of behavior will be sorted out by competition. At worst it is just blankly ignored completely.
Probably just foretells the rise of competitors as is the case here.
Correct. Rational Choice Theory would expect that sub-optimal or inefficient actions from a single party would drive counterparties to competitive parties.
Probably efficient for Walmart, sure.
I don't understand a mega-corporation delaying payment to employees. Is that part of a Fortune 500's business model?
For what little benefit do they gain by playing these low level wage tricks?
I worked for a company that used fast payments to induce vendors to accept payment via "payment card." If a vendor wanted to continue getting checks or ACH payments, the payment would be processed 2 days before the late date.
In this case, the bank (WFB) had a payment card revenue-share agreement with the company, the commercial card version of cash back.
Is that part of a Fortune 500's business model?
Yes.
For what little benefit do they gain by playing these low level wage tricks?
The money from those who give up, and a year's worth of interest on millions of dollars from those who don't give up.
This is a bit different than their similar threat to suppliers that use AWS. The venn diagram of truckers that carry for each is likely just one circle. This would create a weird industry split since Amazon and Walmart are so dominant in volume of shipments.
I wonder if this might be illegal even if it's not antitrust worthy.
That was my first thought: restraint of trade, or whatever someone who knows what they're talking about would call it.
Besides, what is Walmart going to do when AmazonTrucking is the only trucking company left?
I guess the cold war started.
I hope it isn't true. Amazon is not walmarts enemy: they should focus on low prices and growth using new technology. Their ceo said they reached employment peak [1]
Truckers and delivery people dont hate each other or have any competitive spirit among each other. Pay me to make a delivery. End of story.
The ups and FedEx guy(s) and i all bitch about the same thing: why cant these healthy lazy people go to the store. Day after day the same people get packages. What do they do all day, shop$!! Its so funny it could make a screenplay.
Truckers dont care either.
[1] http://abcnews.go.com/amp/Business/wireStory/walmart-traditi...
i order almost everything off amazon. i admit that i feel strange about this for many reasons, but laziness doesn't really come into play. time is the most valuable thing i have and stress is a major health issue. by ordering off of amazon i completely sidestep having to deal with traffic, lines, driving, miserable employees, poor service, not finding what i want, terrible products, etc. that's a lot of stress and time that i save by having packages delivered directly to me. whether that is a net gain or loss for society, i am not for sure, but it certainly is a net win for myself.
I am a hypocrite. I order too
My point was that delivery people dont give each other the finger - we could care less. We talk shop amd know each other by name. I really doubt a trucker hauling today to a Amazon site and tomorrow to a walmart site cares.
After years of delivering stuff people can buy we get jaded- and that is what we all complain about. (to ourselves)
One example. Woman gets Fresh. Weekly. As carrier is lugging 4 green totes her adult son watches. The carrier is a 59 year old woman. After the last tote, the carrier says to the woman, "i know now why you order online- your son won't help you with the groceries."
I'm sure it would be preferable for the son to pick up the groceries, and the 59-year old carrier to be unemployed.
Delivery people are on the front lines of society's clear delineation of the "served" and the "hired" or "servers"
People with money buy convenience through delivery. This was not available pre-Prime. Cumulatively the richer "served" are served by the poorer "servers" in this case delivery people.
Same for drivers.
Although your statement is true the son should have helped...
Also you keep losteverything employed, and help the environment (for infrequently returned categories of purchase): http://ctl.mit.edu/sites/ctl.mit.edu/files/library/public/Di... http://www.sciencedirect.com/science/article/pii/S1361920912...
Amazon is definitely Walmart's enemy, at least directly. Indirectly, it is last mile shipping that is Walmart's enemy. Last mile shipping is far more efficient, and has to win in the long run. Imagine if the dominant paradigm for garbage collection was that everyone had to take their own garbage to the dump.
FWIW, I often order online due to availability. A lot of times I can't find what I am looking for locally, at all. Wal-Mart is the worst offender, their selection across the board is more and more homogeneous and dull.
In what universe is Amazon not Walmart's enemy?
Win on price; innovation; technology;people;
Imo Amazon is smarter and more nimble and if Wal-Mart starts this stuff it may backfire
Look - if iy wasn't for Amazon people would not expect to get anything on line, and thus walmarts revenue in online would not be as much. (The pie is huge because of Prime)
I've always saw Amazon and Walmart almost as large cats with overlapping ranges. Like they've seen signs the other is around, but haven't actually had any run-ins or direct confrontations.
Cats are extremely territorial. If there is overlap, it is perceived as trespass and confrontation is inevitable. Which is what we are seeing.
Walmart's fight is far more for vendors than shoppers.
First AWS, now this.
At what point does the DOJ step in? Isn't this anticompetitive behavior? I've heard that Reagan-era deregulation changed a lot of the relevant law, but I'm not clear on how. Is Walmart doing this with the expectation of impunity because there's no longer a crime to charge them with, or because they see themselves as immune to prosecution?
Hard to make the case that walmart is a monopoly. For what its worth amazon has pulled similar stunts like not selling the chromecast.
A monopoly is not some magic necessary condition for illegal anti-competitive practices. The most obvious example is price fixing.
I can see the argument* to say "we can't invest the work to support chromecast". Whereas it's harder to say "we won't talk to these other truckers who work with our competitor".
*A argument, not one that would hold in court. IANAL.
EDIT: It seems I misunderstood Amazon's lack of Chromecast support. I hadn't thought of trying to buy Chromecast through Amazon before. I own three of them and bought all through the Google store.
I don't think this is about supporting chromecast for Amazon Video, it's about actually selling the google chromecast itself on amazon.com.
I don't think there is any argument that passes the sniff test for them not to be able to sell a physical device like chromecast from amazon.com. The level of incremental work is basically zero to add an item into the store.
Even better, when you search for chromecast on amazon.com, the first listing is for Amazon's competing product, the 'Fire Stick'
They banned even third party sellers from selling chromecast. You can sell basically whatever you want on their site, except for chromecast and apple tv.
There are exceptions to "sell anything", but chromecast and apple tv are the only business exceptions, not based on safety/legallity/ authenticity etc.
You're confused. Amazon didn't just refuse to integrate with Chromecast, for their Prime videos or whatever. They refuse to carry Google's product in their inventory, period. You can't buy a Chromecast on Amazon.
That IS pretty much directly comparable.
I think it was less that Amazon wouldn't provide support for Chromecast with their services and more that they refused to stock and sell Chromecast devices at all.
I suppose the difference between this and Walmart's move is that we are not entitled to buy the things we want from every shop, whereas these drivers are probably entitled to employment without discrimination in regards to other customers they provide services to?
The work to support it? They just refused to list it on their marketplace/products
The comments on the original story are fascinating. Hundreds of truckers sharing personal stories. Their spelling is dodgy but many bring detailed personal data. From my read, it sounds as if Amazon has two business issues to fix (staggered scheduling and last-minute cancellations). Walmart seems to have infuriated truckers for more reasons than I can count. Not sure Walmart is going to like the outcome of this war.
Jeez.
Walmart seem really damned insecure about themselves. This isn't the first petty BS they've come out with regarding Amazon.
They aren't insecure, they are their predatory self. It's just that we normally don't hear about their underhanded tactics because it mostly directly affects blue collar workers and retail.
Or regarding Visa transaction fees in Canada.
How is this not restraint of trade?
> Restraint of trade means any activity which tends to limit trade, sales and transportation in interstate commerce or has a substantial impact on interstate commerce.
"Amazon offers $0.10 more per mile, leaving Walmart with no truckers"
But really, Wal-mart needs to get over themselves and do what they need to do to adapt, rather than being the bully they've always been.
It isn't like they refuse technology, they have a pretty decent technology team as far as I can tell.
Except they don't anymore. They laid off ~1,000 employees in the HQ, many of them in their tech department. (Source: http://www.foxbusiness.com/markets/2017/01/20/wal-mart-begin...)
Disclaimer: Some of the workers that got laid off in that department were friends of mine.
Even then, they still have an extremely competent technology division.
And I can say that the number of persons laid off in that even were <500.
Disclaimer: My mum was laid off in the event.
Where did you read this quote?
It's not a quote, it's a possible response.
Walmart is lashing out like it already knows Amazon is going to win. The only play it has left is to bully partners.
This isn't really new for Walmart. Their thing has long been to use their market position as something of a monopsonist to extract concessions from suppliers. Give us these things packaged differently, and for 7% less, and make some of them Walmart exclusives (you're not selling Target the same thing, are you??), or we won't sell your stuff anymore.
The stories of the hoops that suppliers have to go through in Bentonville are legendary.
>>The only play it has left is to bully partners
That is the only play it has ever had... It has bullied its suppliers since almost day 1, Certainly since Sam Walton died...
This is just an expansion of the bully tactics to other areas of the business beyond the Buyers, but it is not a new tactic. They used this tactic to great success to kill off a lot of competition in the Brick/Mortor Retail space.
Even with them historically always bullying businesses, this and the other recent stories certainly do feel like Walmart is acting like they have already lost to Amazon. I was hoping Walmart would get better in their fight against Amazon. Naive me hah!
At least they are letting Lore handle online business for now.
If this is true (keeping in mind the source is an analyst who is relating conversation between other parties for which they were not involved), it might not necessarily be a negative for the freight market. If the contractors become territorial about which freight companies they will hire it will effectively reduce the supply available for both (once a freight company commits to one or the other) meaning Walmart/Amazon will each have to pay more essentially for "exclusivity".
But higher prices would also encourage Amazon to invest more in automating their fleet, at which point the market will collapse.
If Amazon invests in their own self-driving fleet, the whole discussion is basically moot. If instead (and maybe more likely) there are a small number of carriers who have invested in big fleets of self-driving trucks and Walmart/Amazon blackballs any carrier who works with the other side they would still be limiting the supply side of the market and have to pay more.
Money isn't the thing that prevents self-driving trucks from becoming a reality.
Will they include USPS, UPS, and FedEx in this?
USPS is barred by law from signing an exclusive contract like this, to Walmart would just have to refuse to use them.
UPS and Fedex, I highly doubt either would agree to it, but it is not impossible to see one of them go with Walmart and One go with Amazon but highly unlikely
Wouldn't matter, Amazon is already singling out all three with LaserShip and its own Logistics firm.
Did I mention how terrible AMZL is at their job? I spend the better part of a day tracking down a package marked as "delivered."
The last three packages I got from Amazon were late, even though they were Prime guaranteed. Only one of those was the fault of the carrier, the other two sat in the Amazon distribution center for the two guaranteed days, only making it to the carrier long after they should have been in my mailbox.
While I was able to get an extension on my Prime membership all three times, I'm starting to wonder if I should just drop it altogether. Yes, the shipping is "free" even if it's late, but it's damned annoying when I try to plan around a guaranteed date that ends up anything but guaranteed.
I'm finding the "free" shipping to be less and less of a benefit now. It's frequently available from non-Prime sellers for cheaper (which generally works out to about the same cost when you figure in shipping).
Amazon prime started taking 5 days. I canceled. Orders now spend 3 days in waiting to ship, and then arrive 2 days after being marked as shipped.
Very odd. I've seen nothing of the sort, so I wonder if it's regional. Here in upstate NY I get things when promised, and Amazon explicitly states "get it by today+2" when ordering.
When you are desperate, you are acting irrationally and, definitely, absolutely, not thinking long-term, but counting on potential short-gains to survive, and looks like that's Whalmart is doing.
They are doomed, of course, just a matter of how long it will take until they become irrelevant. And it's not like they couldn't study history or didn't have time or money to invest in whatever would have been required to mount a better defence, but in the end, hubris and misplaced confidence is going to claim another foolish company.
They are doomed, of course, just a matter of how long it will take until they become irrelevant. And it's not like they couldn't study history or didn't have time or money to invest in whatever would have been required to mount a better defence, but in the end, hubris and misplaced confidence is going to claim another foolish company.
+1. Not much you can say about Sears that you can't also say about WalMart.
That's a bit extreme.
Walmart is the largest company in the world by revenue (by far), at over 4.5X what Amazon pulls in. They have almost 5000 locations in the US and an extra 4000 worldwide.
They've spent the last few decades engaged in ruthless competition with small, local business, and for many, now represent the only game in town. They also have tons of exclusive arrangements with suppliers, logistics, and shipping.
I'm not a huge fan of Walmart, but they definitely are positioned to weather quite a few storms. There's no doubt that they've been slow to move to the online space, but when they really focus on it, I think we'll see a very interesting fight with them and Amazon.
This is sttarting to read as a Thucydides Trap. Established power threatened by an upstart rival.
https://www.theatlantic.com/international/archive/2015/09/un...
fuck Walmart. You don't hear anything about Amazon workers being on public assistance because they are payed enough and get enough hours to survive on their own. Around the holidays Walmart takes food and toy donations for their workers inside their break rooms. It's a bad company and I hope it gets killed off.
Amazon is notorious for their awful treatment of workers. Just recently a local NPR station had a re-run of a story where (1) even when the AC broke inside the warehouse, Amazon wouldn't give them a break or let them open the door or windows to cool things off. A person eventually passed out. (2) They tempt and fake promise temp workers with good future outlook like better pay and benefits after they work for X amount of time. But then Amazon lets them go right before X amount of time is done. (3) Overall they overwork and are brutal with some warehouse workers.
I'll try and find the NPR link. But like someone else has already linked to 3 article, this isn't a special one off case.
If you're going to upset at how Walmart treats blue collar workers, a similar amount of anger should be aimed at Amazon.
I'm not really trying to defend Amazon Fulfillment nor do I doubt the veracity of the NPR article. However, I want to throw some anecdata into the conversation.
My ex-wife has worked for Amazon Fulfillment for almost 5 years (in Texas - not exactly known as a "worker friendly" place when it comes to having laws protecting the working class from abuse) in multiple facilities (both replenishment and fulfillment) and hasn't witnessed workers being systematically mistreated, obvious safety issues going unreported and unaddressed, etc. She makes almost twice minimum wage with medical benefits, stock, 401k matching, 1.5x + 8 hours holiday pay compensation during crunch time, etc. All of that paid to someone that has only a high-school equivalence certificate.
She used to work at Walmart and would unequivocally tell you that Amazon Fulfillment has been the better of the two companies to work for.
The NPR report was specifically about 2 or 3 locations if I recall. So anecdote does work the.
Amazon is as awful to their employees as any other retailer, and worse than many.
There are pretty much only two only MAJOR retailers with good labor reputations. One is Costco, and that's only because they can run their business with a fraction of the employee-to-square-footage ratio that most retailers need. The other is Whole Foods... which has been getting worse for years, and will probably accelerate down that path now that they're owned by Amazon.
It's a race to the bottom. There are no good guys.
The race to the bottom is the elimation of those jobs completely.
Today a store that used to have 5 cashiers needs 1 to monitor 5 self checkout stations.
Amazon and others are working on eliminating that final job...
They are also working on ways to fill the shelves with no human involvement, and robot shopping assistance that you can ask for help
we are probably less than 10 years away from the first retail store with no human employees, or at most 1 or 2 to monitor the robots
Let's not jizz ourselves over the loss of millions of retail jobs that won't be replaced any time soon. Not everyone can be a fullstack js ninja or thought leader in fidget spinners.
Amazon has plenty of their own issues.
http://highline.huffingtonpost.com/articles/en/life-and-deat...
http://www.businessinsider.com/brutal-conditions-in-amazons-...
Hate to break it to you, but Amazon does not treat their warehouse staff much better.
Both may be reaching scales which strain the limits of the shipping industry. To retain needed capacity, each has to elbow the other out of the way, while they ramp up alternatives.
How is this not tortious interference? Walmart seems to be making this threat in order to undermine the contract between these truckers and Amazon.
This is a misguided, myopic decision done out of sheer desperation. It's a symptom, not the disease.
It's not desperation, it's using your leverage to your advantage. Isn't that the smart business decision? How is that any different then Amazon, Uber, or anyone else deciding to raise prices once they're the dominant participant in their respective marketplace?
"Competition is for losers." - Peter Thiel
You misattributed the quote:
""Competition is for losers." - Peter Thiel." -Michael Scott.
More seriously, I hate this quote, for so many reasons. Sure, it's great if you can do something no one else is doing and do it so well that no one can really compete with you. But there are plenty of people who compete with others and the world is often a better place as a result. It feels like people lose sight of the goals: not just becoming really wealthy, but perhaps serving the public?
I agree with you entirely though. That's the problem: the delta between the way capitalism is current running and how it should.
#LateStageCapitalismProblems
I feel like truckers should tell Walmart to shove it. This is getting abusive
Unfortunately, truckers don't usually have that option as they are often times wages slaves to their jobs through debt by being forced to buy their semi truck: https://www.usatoday.com/pages/interactives/news/rigged-forc....
In the short term, this could benefit the truckers. Rates may go up as each of the larger customers raises rates to attract them.
In the long term, truckers are best served by having competition in the marketplace. If there is only one big customer on the market then they have little chance of getting fair rates.
In the long run, there are no truckers.
Hopefully this will backfire on Wal-mart.
Seems the FTC should step in here.
Oh, wait. We have a "pro business" Administration and Congress.
So, the big boys get to throw their weight around.
bah
P.S. These "big boys" should have to compete for truckers' services. Just like everyone else. On an ongoing bases... not some one-time commitment extorted solely to their advantage.