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Amazon labor shortage hinders one-day delivery ambitions

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Labor shortages have cut into Amazon.com Inc‘s plan to make one-day delivery standard for members of its Prime loyalty club, delaying its bid to cement its lead in e-commerce and sending costs surging ahead of the all-important holiday season.

The comments from the world’s biggest online retailer come as staffing emerges as a significant pain point for U.S. retailers, already battling supply-chain snarls, product shortages, rising inflation and rocketing transportation costs.

Seattle-based Amazon said it anticipates $4 billion in additional labor and related expenses during the fourth quarter, amid pandemic-fueled shortages that made it harder to hire warehouse workers and drivers, and forcing it to route packages to out-of-the-way warehouses with sufficient staffing.

In April 2019, Amazon announced it would roll out one-day delivery for Prime subscribers, and it said that would cost the company $800 million in the second quarter of 2019 alone. Its race to faster shipping forced Walmart Inc and other retailers to speed up delivery and invest in e-commerce offerings, bolstering competition.

Amazon continues to charge $119 a year for a U.S. Prime membership, which includes shipping.

On Thursday, Amazon Chief Financial Officer Brian Olsavsky said, “we have unfinished business on the one-day-promise side. We were ramping that up nicely in 2019 and in the first quarter of 2020 before the pandemic,” he said, referring to one-day shipping. “We’re still not back to levels that we saw pre-pandemic.”

Olsavsky said labor constraints have “not helped us close the gap” in offering Prime customers default one-day shipping, but the company hoped for an improvement next year.

‘CAN’T CONTROL IT’

As shoppers resume spending on entertainment and travel, Amazon is grappling with stiff competition not only for share of wallet, but for employees.

Michael Pachter, an analyst at Wedbush Securities, said Amazon had little choice but to pay up for workers because it needs warehouses near high-cost urban centers to speed goods in a day to nearby customers.

“Their sales are in population centers, which by and large means they’re having to pay competitive wages,” he said. “They really can’t control it. The model is, order on Amazon and you’re going to get it soon.”

Companies across the retail landscape also are struggling to find workers to do physically demanding warehouse work – especially as restaurants, stores and entertainment venues rehire. In New York City, some Amazon warehouse workers https://www.reuters.com/business/amazons-staten-island-warehouse-workers-file-petition-union-election-nlrb-2021-10-25 are pushing for more pay and protections through a potential union vote.

Drivers are also in demand.

Three Amazon delivery service partner (DSP) drivers this week told Reuters they successfully won higher pay. Two used offers from FedEx to squeeze their existing DSP employers for more. Another driver jumped to United Parcel Service, a union shop known for having some of the industry’s best pay and benefits.

Amazon previously said it plans to add 150,000 seasonal jobs in the United States, where lures for warehouse workers and other roles include average starting pay of more than $18 per hour and sign-on bonuses of up to $3,000.

 

(Reporting by Lisa Baertlein in Los Angeles; Editing by Kenneth Maxwell)

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Tentative deal between union workers and beef producer Cargill struck | CTV News – CTV News Calgary

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With less than a week to go before workers were set to go on strike at Cargill’s High River, Alta. beef processing plant, the company says a tentative deal has been reached.

The company announced the development on Wednesday and says it is “encouraged by the outcome” of recent talks.

“After a long day of collaborative discussion, we reached an agreement on an offer that the bargaining committee will recommend to its members. The offer is comprehensive and fair and includes retroactive pay, signing bonuses, a 21 per cent wage increase over the life of the contract and improved health benefits,” Cargill wrote in a statement to CTV News via email.

The company adds it also “remains optimistic” a deal can be finalized before the strike deadline.

“(We) encourage employees to vote on this offer which recognizes the important role they play in Cargill’s work to nourish the world in a safe, responsible and sustainable way. While we navigate this negotiation, we continue to focus on fulfilling food manufacturer, retail and food service customer orders while keeping markets moving for farmers and ranchers,” it wrote.

The United Food and Commercial Workers’ Union (UFCW) Local 401 was expected to go on strike on Dec. 6.

It rejected the most recent attempt at a deal on Nov. 25 by a 98 per cent margin.

‘FAIR OFFER’

According to a statement from UFCW Local 401, the negotiating team engaged in “a marathon day” of talks with the company on Tuesday.

“Late in the evening, our bargaining committee concluded that they were in receipt of a fair offer and that they were prepared to present that offer to their coworkers with a recommendation of acceptance,” it wrote in a statement.

The union says the tentative deal will “significantly improve” the lives of Cargill workers and will be the ‘best food processing contract in Canada.”

Highlights from the deal include:

  • $4,200 in retroactive pay for many employees;
  • $1,000 signing bonus;
  • $1,000 COVID-19 bonus;
  • More than $6,000 total bonuses for workers three weeks before Christmas;
  • $5 wage increase for many employees;
  • Improved health benefits; and
  • Provisions to facilitate a new culture of health, safety, dignity and respect in the workplace

While UFCW Local 401 president Thomas Hesse calls the deal “fair,” he will support workers on the picket line if they decide to reject the proposal.

“If they do accept it, I’ll work with them every day to make Cargill a better workplace,” Hesse said in a statement. “I will do as our members ask me to do.

“I respect all of the emotions that they feel and the suffering that they have experienced.”

Employees are expected the vote on the new deal between Dec. 2 and 4.

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Afterpay delays vote on $29 billion buyout as Square awaits Spain’s nod

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Afterpay Ltd will delay a shareholder meet to approve Square Inc’s $29-billion buyout of the Australian buy now, pay later leader, as the Jack Dorsey-led payment company awaits regulatory nod in Spain.

The investor meet was set for Dec. 6, but Afterpay said it would likely take place next year as Square, which has rebranded itself to Block Inc, is likely to get an approval from the Bank of Spain only in mid-January.

The delay is unlikely to impact the completion of Australia‘s biggest deal, which is set for the first quarter of 2022, Afterpay said.

“We continue to believe the risks of the transaction closing are minimal,” RBC Capital Markets analyst Chami Ratnapala said in a brief client note.

Meanwhile, Twitter Inc co-founder Dorsey is expected to focus on Square after stepping down as chief executive of the social media platform as it looks to expand beyond its payment business and into new technologies like blockchain.

Afterpay shares fell more than 6%, far underperforming the broader Australian market, tracking Square’s 6.6% drop overnight in U.S. market on worries over the Omicron variant.

 

(Reporting by Nikhil Kurian, Sameer Manekar and Indranil Sarkar in Bengaluru; Editing by Anil D’Silva, Rashmi Aich and Arun Koyyur)

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Canada Goose under fresh fire in China over no-return policies

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China’s top consumer protection organisation has warned Canada Goose Holdings Inc against “bullying” customers in China with its return policies, just three months after the winterwear brand was fined for false advertising.

The premium down jacket manufacturer has been a hot topic on Chinese social media in recent days over its handling of a case involving a customer who wanted a refund of her purchases amounting to 11,400 yuan ($1,790.17) after finding quality issues.

She said she was told by Canada Goose that all products sold at its retail stores in mainland China were strictly non-refundable, according to her account which went viral online.

State-backed media such as the Global Times newspaper later cited Canada Goose as denying that it had a no-refund policy and that all products sold at its retail stores in mainland China were refundable in line with Chinese laws. The company did not respond to Reuters’ request for comment.

That has not failed to quell criticism of the brand.

“No brand has any privileges in front of consumers,” the government-backed China Consumer Association (CCA) said in an opinion piece posted on its website on Thursday morning.

“If you don’t do what you say, regard yourself as a big brand, behave arrogantly and in a superior way, adopt discriminatory policies, be condescending and bully customers, you will for sure lose the trust of consumers and be abandoned by the market,” the CCA said.

Representatives of the brand were summoned for talks on Wednesday by the Shanghai Consumer Council to explain its refund policy in China.

The dressing down of Canada Goose comes as tension between China and Western countries has fuelled patriotism and driven some shoppers to turn to home-grown labels.

Canada Goose was also fined 450,000 yuan in September in China for “misleading” consumers in its ads.

($1 = 6.3681 Chinese yuan renminbi)

 

(Reporting by Sophie Yu, Brenda Goh; Editing by Kim Coghill)

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