The last mile is the longest : opportunities and constraints for delivery workers in an emerging platform economy

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The Last Mile is the

Longest

Opportunities and Constraints for Delivery

Workers in an Emerging Platform Economy

by Arjan van Dalen [11356626]

Master Thesis, Human Geography [Economic]

11-07-2018

First reader: Dhr. Dr. Niels Beerepoot

Second Reader: Dhr. Dr. Frank Mueller

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Abstract

Logistics services are pivotal in the current, globalized economic system, where flexible production and just-in-time management have become defining features. Consequently, the revolution of logistics capabilities has profoundly altered the global division of labour, and the labour conditions that apply within it. This research focuses on the labour conditions in a small yet significant part of logistics activities, where shifts enabled by logistics reciprocally reflect on its workers themselves: last-mile deliverers. Additionally, the potential for labour agency that is anchored within these sector dynamics was assessed. Through a content analysis and semi-structured interviews, this thesis highlights the current rupture in employment arrangements and working conditions between employed and self-employed delivery workers in the Netherlands. It is argued that, most notably, the labour intensity and the low technological susceptibility of the sector establishes opportunities for delivery workers, but the fragmentation in employment status, personal interests and geographical location strongly undermines this potential. Therefore, it is argued that legal arrangements play an important, mediating role in protecting workers at the margins and containing the excesses of firm competition.

List of Tables

Table 1 Operationalization of Concepts (p.19)

Table 2 Overview of interviewees (p.21)

Table 3 The Big Four of Last-Mile Delivery in the Netherlands – Key Characteristics (p.32)

Table 4 Evidence of a Changing Value/Volume Ratio (p.40)

Table 5 Labour Agency Across Five Dimensions (p.42)

List of Figures

Figure 1 Flow-chart of The Transportation Chain (p.11)

Figure 2 Deconstruction of The Transportation Chain (p.12)

Figure 3 Conceptual Model (p.19)

Figure 4 Relative (in %) and Absolute (in million €) Value of Parcel Delivery at PostnNL (p.27)

Figure 5 Domestic Parcel Delivery Market Shares (p.30)

Figure 6 Constellations of Parcel Delivery Firm Relations (p.30)

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1. Introduction

In the last two centuries, the economic and social development of humanity has been accelerating on an unprecedented scale (see e.g. Pomeranz, 2000; Morris, 2010). The way we live our lives has been fundamentally affected by innovations like the first railroads, electricity, mechanization, and the Internet (see e.g. Gordon, 2016). If one only considers the societal changes that someone born 80 years ago has experienced since, this will raise major question regarding the future to come.

In this rapidly changing world, new issues are also rapidly arising (see Gordon, 2016). One of these prominent contemporary issues concerns the changing nature of work, and the related position of workers in the global economy. As labour shares have been decreasing and wage gaps have been increasing in many (developed) countries (Ramaswamy, 2018), a looming matter is how the future of work will qualitatively and quantitatively unfold. Much attention in both popular and academic discourse has been directed at two macro-trends: globalization and technological change (see e.g. Coe, 2014; Cowen, 2015; Urry, 2016). Enabled by motions of deregulation from the 1970s onwards, these forces have been expanding in co-evolution. Amongst other phenomena, this gave rise to a growth of retailer power over integrated, but geographically fragmented, production networks (see e.g. Gereffi, 2014). Of course, such extensive shifts are bound to have an impact on job structures people used to be accustomed to. Indeed, a global distribution of winners and losers is produced through these forces of globalization (see e.g. Dicken, 2004) and technological change (see e.g. Brynjolfsson & McAfee, 2014). This thesis contributes to an expanding strand of research that attempts to assess the

consequences of these transformative processes at varied geographic locations (Coe, Dicken & Hess, 2008). More specifically, it focuses on understanding labour conditions in the last-mile delivery sector in the Netherlands. It is a remarkable sector because, amongst other things, logistics are at the heart of the contemporary global economic system (see e.g. Coe, 2014).

Bonacich & Wilson (2008) even speak of a ‘logistics revolution’ that enabled firms to connect remote places and smooth over the historical disjuncture between production and distribution. Anno 2018, the online ordering of goods from all over the world, with free delivery in only a few days, has become routine for many consumers. This swift emergence of logistics is intricately linked to technological advances in ICT and intermodal shipping, while the resulting rapid turnover with low profit margins provides an essential competitive advantage in the world economy (Danyluk, 2017). Although the sector is rarely treated as a sector in its own right (Coe, 2014), the development of logistics has enabled profound transformations of this world economy. Hence, logistics exhibit great significance overall, but also with specific regards to the labour conditions within it, as the

implications of these extensive transformations reciprocally reflect on workers in the sector itself. As Coe (2014, p.242) puts it: “many logistics workers find themselves caught in a ‘perfect storm’ of

globalization, the fragmentation of production, new logistics technologies and neoliberal deregulation of both labour markets in general and the transport industry in particular”.

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1.1. Problem and Relevance

Last-mile delivery workers execute the last step of transportation: the direct delivery of the good to the receiver. This occupation has received increasing attention as these workers have been contesting their working and employment conditions through several strikes and lawsuits (see e.g. Haidinger, 2012). The consequences of globalization and technological change manifest themselves in a particular way for these workers. For example, the sector remains very labour intensive, which indicates

implementation of technologies has been arduous. Additionally, the nature of the work necessitates fixity nearby its customers, which indicates that offshoring to cheap-labour countries cannot be applied. Therefore, firms need to employ alternative competitive strategies to cut labour costs, which creates particular relations and conflicts between and among workers, unions, and governments.

This is an inherently geographic matter, as globalization profoundly restructures the

geographical distribution of production and distribution (see Dicken, 2004). Accordingly, this research addresses the implications of the contemporary, global transportation of goods in a specific spatial and temporal context. Because, in short, neither regional uniqueness nor global interrelatedness and interdependency can be discarded when studying contemporary economic relations (see Hess, 2004; Rodriguez-Pose, 2013). In this thesis, the case study is delimited by a focus on the last-mile delivery sector in Netherlands, in 21st century.

Additionally, a central point of focus in this research, is the concept of ‘labour agency’ (see Herod, 1997). Though workers are oftentimes treated as passive actors in research on Global Value Chains or Global Production Networks, many scholars have emphasized the shaping power workers can exert over their living conditions (e.g. Castree, Coe, Ward & Samers, 2004; Chan, 2014; Coe & Jordhus-Lier, 2010; Rainnie, Herod & McGrath-Champ, 2011), as ‘labour is the only commodity that employers cannot treat as an object’ (Castree et al., 2004, p.29). The underrepresentation of labour has commonly arisen from the notion that transnational companies possess potentially greater power, because they are less territorially circumscribed than (nation-)states and labour (Dicken, 2004). However, it is argued that this underestimates the dependency on workers by firms, and overestimates the mobility of firms (see Castree et al, 2004).

In sum, this thesis contributes to existing research by focussing on a) the underexposed

logistics sector (e.g. Bonacich & Wilson, 2008; Coe, 2014; b) the complex and geographically specific interplay of macro-structures and actor-networks in a specific place (e.g. Dicken, 2004; Gereffi; 2014), and c) the undervalued concept of labour agency (e.g. Coe & Jordhus-Lier, 2010; Herod, 1997). The main research question is: How do current dynamics in last-mile parcel delivery contribute to

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1.2. Thesis Outline

The remainder of this thesis is structured as follows. The theoretical framework captures the

remarkable work effectuated in distinguishing and analysing macro-trends and -structures that shape labour conditions. Moreover, the importance of the logistics sector within these embedded forces is highlighted. Last, the labour conditions and labour agency potential that have resultantly arisen, are discussed.

The empirical analysis of this thesis consists of two parts; First, the historical trajectory and present state of the last-mile delivery sector and its workers is investigated, through a content analysis of newspaper articles and evaluative reports. Second, findings are complemented with interviews with different stakeholders to distil the current labour conditions of last-mile delivery workers and analyse the opportunities and constraints for labour agency (Sowers, Ciccantell & Smith, 2017). These methods connect objective characteristics with subjective perceptions. Most notably, it is argued that the sector exhibits a fairly strategic position for workers, overall, though the contested status of ‘self-employed’ (“zzp”) workers is commonly utilized to evade conventional Dutch labour laws, while the segmentation of the labour force by employment status, personal interests and geographic location strongly subverts labour agency potential.

The following sections are chronologically included in this research: a theoretical framework, establishing defining forces in (delivery) labour, and highlighting literature on labour agency (Ch.2); a methodological chapter (3); an assessment of the current state of last-mile delivery in general and an exposition of the trajectory of labour in last-mile delivery in the Netherlands, grounded in content analysis (Ch.4); an exposition of labour conditions in last-mile delivery the Netherlands, grounded in interview data; an analysis of labour agency potential, grounded in dimensions proposed by Sowers, Ciccantell & Smith (2017), comprised of a material, economic, political, social and labour dimension (Ch.5); and last, a closing chapter of conclusion and discussion (Ch.6)

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2. Theoretical Framework

Though the position of labour is a constant subject of critical debate, several contemporary issues have arisen that have triggered anxiety among (western) populations about its social and economic future. The topic of this thesis is part of a broad and fundamental transformation that workers in the western world have experienced from the 1970s onwards, encompassing increasingly precarious and insecure workplace arrangements and labour conditions. This “precariousness” of labour is currently receiving growing attention, as it exhibits a significant departure from decades of relative security after the Second World War (see e.g. Kalleberg, 2009; Vosko; 2010). In this theoretical framework, essential academic contributions are discussed that help to explain the labour dynamics at play in the last-mile delivery sector in the Netherlands.

The first section addresses the overall state of labour and its shaping forces. Consequently, this part is divided in an exposition of a) the characterization of contemporary labour relations in terms of “precariousness”; b) the underlying trend of deepening globalization, shifting significant power to major retailers and establishing a highly uneven global division of labour (see Castree et al., 2004); and c) the underlying trend of technological change, that is commonly asserted to be ‘skill-biased’ and ‘capital-biased’ within winner-takes-all markets (see Brynjolfsson & McAfee, 2014).

The second section discusses the prevalence of logistics as fundament of the contemporary global economy. This ‘logistics revolution’ was most significantly enabled by the technological innovations, and strongly overlaps with the current capability of retailers to govern integrated supply chains (see Bonacich & Wilson, 2008) and a neoliberal context of worldwide deregulation (see Gereffi, 2014). It strongly supported overcoming the expansive and expensive separation between supply and demand, by enabling flexible production and just-in-time management (Danyluk, 2017).

The third section recounts the impact of these new global dynamics on labour conditions in general, and within last-mile delivery, in particular. Hence, the major forces that the logistics revolution is a pivotal part of, have reciprocally reflected on labour within the sector itself (see Bonacich & Wilson, 2008; Gutelius, 2014).

The final section concerns the opportunities and constraints delivery workers encounter in establishing better labour conditions. Though the ‘power repertoire’ of labour is strongly shaped by global power relations with capital, these exact dynamics are also shaped by regional circumstances (see Castree et al., 2004). Moreover, an analytical framework by Sowers, Ciccantell & Smith (2017) is introduced as a means to analyse labour agency potential in a geographically-specific configuration of material, economic, political, social, and labour characteristics.

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2.1. Contemporary Labour Conditions & its Shaping Forces

The overall shift to ‘information-based economies organized around flexible production’ has led employers to seek greater flexibility in their relations with workers (Kalleberg, 2009, p.3). Clearly, a complex interweaving of factors is involved in these processes and outcomes, but in the literature, much emphasis is placed on globalization, technology, neoliberal regulation, and a fragmentation of the labour force (Coe, 2014). Macro-trends like these profoundly alter labour relations and attributes to “precariousness” for certain workers.

2.1.1. Precariousness

The contemporary trend in labour characteristics has been addressed through a multitude of terms, like: informalization, casualization, flexibilization, temporality, and contingent, or non-standard employment. An overarching term that broadly covers the trend of uncertain, unpredictable and risky work is “precariousness” (Standing, 2011); life itself has become a central concern for those workers who lost a (stable) job, and face uncertainty regarding debt, housing, welfare and their social life. “Precariousness” transcend the workplace, as it could lead to stress (Kalleberg, 2009), social isolation (Paugam & Russell, 2000), and affect marriage and pregnancy decisions (White & Rogers, 2000).

In Standing’s (2011) characterization of the “precariat”, important lacking securities include stable labour contract and additional benefits, a clear (occupational) identity, and mutual solidarity. In a similar vein, a clear departure from the standard employment relationship (SER) is observed by Vosko (2010), whereas employment relationships were formerly comprised of full-time, continuous employment, under the supervision of one employer, and with access to comprehensive benefits and entitlements. This has led to calls for renewed social movement unionism (Munck, 2013). However, Vosko (2010) argues there is no return to the conventional SER of the past, as she pleads that all SER-centric alternatives do not provide enough incentives to truly eliminate the pattern of a male

breadwinner/female caregiver and the equal inclusion of all denizens. Thus, labour and social

protection entitlements should include all people, she argues, whether they have a job at that moment, or not. Both academics and policy-makers have been paying increasing attention to the adaptation of the proactive ‘flexicurity’ model to address the current tension between labour market flexibility and social security (Viebrock & Clasen, 2009).

2.1.2. Effects of Globalization

As highlighted by Dicken (2004), contemporary globalization is not necessarily defined by remarkable changes in volume, but changes in composition. Enabled by time-space shrinking technologies -like the intermodal shipping container and ICT-, globalization can be characterized as a ‘stretching and deepening of social relations and institutions across space and time’ (Dicken, 2004, p.9). These fundamental changes of the global economy coincide with a worldwide pursuance of neoliberal deregulation and privatization (Gerrefi, 2014), and has substantially transformed the global division of labour (see Castree et al., 2004).

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9 An important feature of globalization is offshoring, which has been increasingly done by both retailers and manufacturers in the last decades. This has supported the shift from ‘producer-driven’ supply chains, to ‘buyer-driven’ (Gereffi, 2014), or ‘pull’ supply chains (Bonacich & Wilson, 2008). It is a broad characterization that does not adequately cover the complexity and interconnectedness that is currently involved, but it highlights a fundamental transition; retailers and marketers now exert the most power to shape the distribution of consumption, profit and risk via dominant market shares and strong brand names (Bonacich & Wilson, 2008; Gereffi, 2014). This has affected the vast capital accumulation of the owners of companies like Walmart and H&M (Korom, Lutter & Beckert, 2015), and the broad establishment of China as ‘workshop of the world’, or India as ‘the back-office of the world’. Hence, ongoing motions of phenomena like outsourcing and offshoring have been constantly strengthening the functional fragmentation and geographic dispersion of production, as a defining feature of the global economy since the 1970s/80s (Coe, 2014). Currently, lead firms are strongly consolidating through mergers and acquisitions, and are becoming geographically concentrated (Gereffi, 2014).

According to Gereffi (2014, p.13) ‘the most notable form of supplier power comes via platform leadership’. Again, many categorizations are created to indicate a changing relation between employer and employee (e.g. gig economy, sharing economy). Technological platforms like Uber and AirBnB are argued to ‘lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers’ (Schwab, 2015). However, these platforms also create shifts that are not perceived to be positive by everyone. Sociologically, many possessions now exhibit opportunity costs, leading to a commercialization of the private sphere (Van Dijck, Poell & de Waal, 2016). Economically, platforms are feared to reinforce precariousness, as freelancers generally have little social protection, while they are racing with each other on offering the lowest prices (Reich, 2015). Moreover, this all occurs on an individual level, meaning these workers occupy a weak

bargaining position as they lack the associational power to make collective demands (Sowers, 2017). These macro-shifts matter for labour around the world, as the spatial flexibility of these lead firms encompasses ‘potentially greater power than either states or labour, both of which tend to be territorially circumscribed’ (Dicken, 2004, p.12). However, it is becoming increasingly clear that regional developments are not “one-size-fits all” (Rodriguez-Pose, 2013). The current complexity involved calls for more refined typologies and, accordingly, shifting dynamics have initiated research that moves beyond state/firm-centric and chain metaphors (Dicken, 2004; Gereffi, 2014). As Amin (1999, p.370) distils: “The consensus shared […] is that regional-level industrial configurations,

supply-side characteristics and institutional arrangements are critical in securing economic success in a globalising economy characterised by transnational flows […] and global-level industrial and financial organization”. Hence, though locality and nature of labour is obviously affected by forces of

globalization, it is essential to consider that the global division of labour also implies that variable power relations emerge from the geographical differences (see Castree et al. ,2004).

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10 2.1.3. Effects of Technological Change

As mentioned, technological innovations enabled time-space shrinkage, strengthening the (uneven) global distribution of labour. Within that global distribution, newly emerging technologies have a certain potential to replace workers (e.g. robots, drones), or mediate new forms of work (e.g. gig platforms). A stacking body of work has addressed the overall influence technology will have over the future of jobs. A highly influential study by Frey & Osborne (2013) estimated a vast 47% of total U.S. employment at risk of automation. However, Arnzt, Gregory & Zierahn (2016) objected that this is an overestimation, arguing that approaches should be task-based, because many occupations deemed at ‘high risk’ of automation still comprise of specific tasks that are hard to automate. Moreover, while Frey & Osborne (2013) address the possibility of automation, context of space and time is deemed essential; social relations, as well as relative factor prices of capital and labour, ethical or legal obstacles, societal preferences, and macro-economic adjustments all frame how technology will influence workers in practice (Arnzt et al., 2016).

Furthermore, it is questionable whether information technologies will amount to similar economic growth, as can be ascribed to ‘general purpose technologies’ such as electricity and the combustion engine (Gordon, 2016). Brynjolfsson and McAfee (2014) have objected that -just like the case of electricity- these technologies need time to disseminate, in order to trigger complementary innovations, ultimately affecting all domains of life. However, what is implied from both perspectives, is the challenge information technology is imposing on equal distributions of wealth across the world. Brynjolfsson and McAfee (2014) asserted that non-routine cognitive and manual jobs are relatively stable, but middle-income, routine jobs will continue to erode. As jobs are already polarizing (Gordon, 2016; Ramaswamy, 2018), digital technology inherently creates winner-take-all markets (Brynjolfsson & McAfee, 2014). Interestingly, many acclaimed studies with different approaches (Frey & Osborne, 2013; Arnzt et al., 2016; Acemoglu & Restrepo, 2016) all roughly imply that low-educated workers perform a much higher share of tasks susceptible to automation than higher-educated workers.

Overall, though views and metrics diverge, the trend of growing polarization in wages and capital is commonly agreed upon, as a manifestation of ‘biased technological change’ (Arnzt et al, 2016; Brynjolfsson & McAfee, 2014; Frey & Osborne, 2013; Gordon, 2016). Rapid technological innovations have changed the composition and quality of work, making certain jobs extinct, while dubious new occupations emerge (see Wajcman, 2017), if not leading to massive job losses altogether (see Ramaswamy, 2018). While the extent is yet unclear, technological change is another essential force to consider, impacting the position of workers by threatening its existence and lowering the relative value of labour as they now compete with physical capital. The utilization and implications of technological change is thus an inherently political and social matter (Urry, 2016).

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2.2. The Role of the Last-Mile in the Global Economy

As the contemporary, globalized economy is exhibiting a strong growth of e-commerce, flexible production methods, just-in-time delivery, expanding geographical extents, growing retailer power and increasingly sophisticated consumer tastes, logistics services have become pivotal. Logistics are generally viewed as a service input to client industries, but this underestimates the strategic role of independent logistics providers (Coe, 2014). Logistics refers to planning, implementing and managing the movement of goods or knowledge from origin to the point of consumption (Coe, 2014).

2.2.1. Basic Framework

Last-mile delivery is only a spoke in this wheel, as it encompasses a part of the execution of delivery to the customer. In the adapted framework from Van Woensel (2012), Gevaers, Van de Voorde and Vanelslander (2011) and Rodrigue, Comtois and Slack (2013) presented in Figure 1, the general stages of parcel delivery are illustrated. From supplier to receiver, there are three overarching steps

discerned: 1) the good gets picked up from the supplier; 2) the good is transported from pickup to a distributive environment, and 3) the good gets delivered to the receiver. The types and numbers of firms and workers involved in the transportation chain can differ significantly, while the number of hubs and modes of transport obviously depend on the scope of the process and the arrangements with the logistics provider. For example, when someone in the Netherlands orders a t-shirt from the United States, the good will be transferred at least one extra time in linehaul; from ship or airplane, to train or truck.

Fig 1. Flow-chart of The Transportation Chain. Delivery/pick up options adapted from Gevaers, R. Van de

Voorde, E. & Vanelslander, T. (2011), the line-haul link from Rodrigue, J., Comtois, C. & Slack, B. (2013), and the encompassing system of nodes from Van Woensel, T. (2012).

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12 This framework offers a generalized and streamlined model of the process of delivery. Van Woensel (2012) offers a deconstruction of this process into three components (pictured in Figure 2). The part from supplier to a point where goods are handed over to a transit operator, is labelled the ‘pickup chain’. From there, all activities, until the part where control is given to a party that directly distributes goods to customers, is labelled the ‘transit chain’. The last part is labelled the ‘delivery chain’ (or: the last-mile). Thus, the last-mile is considered the part where the good is transported directly to the consumer, usually departing from a distribution centre or a retail store.

This research focuses on the last mile, but it is extremely important to consider the whole chain as this directly shapes the conditions in the last mile, whether the whole process is handled by different operators or an integrated operator. The transit chain, and the pickup and delivery chain namely exhibit different characteristics; the former encompasses multiple transportation modes, handling by containers and pallets, long transit times (>1 day) and direct shipments; the latter two encompass mainly transportation by road, handling by parcels or mixed pallets that are less than truck load, short transit times (<1 day), and routing with multiple stops (Van Woensel, 2012).

Fig. 2. Deconstruction of The Transportation Chain. Adapted from Smart Logistics, by Van Woensel, T., 2012,

Within the last-mile, there are more important distinctions to be made. A traditional distinction that is often made is between parcel services, express services and couriers, though these boundaries are becoming increasingly blurred (Benvegnu, Haidinger & Sacchetto, 2018). Express services wield individual agreements regarding timeslots, amongst other things, and use their own (international) integrated networks. Couriers, on the other hand, deliver door-to-door, without transfer points. Moreover, these different services appeal to different markets. Hence, another important distinction is the type of supplier and receiver. Commonly used categorisation are either a Business-to-Business (B2B) Business-to-Consumer (B2C), or Consumer-to-All (C2X) service.

2.2.2. The Significance of Logistics and the Last-Mile

The last-mile has received considerable attention for multiple reasons. For one thing, this part of the supply chain is generally inefficient and expensive (Gevaers et al., 2011), a problem businesses are keen to solve, triggering a myriad of innovations and experiments (see Tanigiuchi, Thomspon & Tamada, 2014). Moreover, expanding freight transport has raised issues of environmental and

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13 economic sustainability (see Schliwa, Armitage, Aziz, Evans & Rhoades, 2015), and (urban) mobility (see Allen et al., 2017). Governments are considering how accommodate this explosive growth, while keeping residential areas green and liveable, though the net effects on mobility are complex and difficult to study (Rotim-Mindali & Weltevreden, 2013).

In their much-cited book Getting the Goods, Bonacich and Wilson (2008) argue that the ‘logistics revolution’ has established a system of integrated supply chain management. Most notably, the lowering of shipping costs (i.e. through the introduction of the intermodal shipping container) and, subsequently, lowering coordination costs (i.e. through the emergence of ICT) enabled fundamental leaps in the process of globalization (Baldwin, 2011). Additionally, scholars have highlighted some historical factors that amplified this development; amongst others, the 1970s recession, high gas prices and high interest rates led to inventory control, while strong unions and high wages made offshoring more prevalent (see Danyluk, 2017). Danyluk (2017) stresses that this ‘logistical fix’ has underpinned capitalist social relations in the 21st century, as rapid turnover (with low margins) is the essential competitive advantage. In a similar vein, Bonacich & Wilson (2008, p.4) perceive the logistics revolution as a ‘response to a chronic problem of the capitalist system, namely, the disjunction between production and distribution, or supply and demand’.

Of course, a shift of such an extent leads to fundamental departures from former structures. In short, these changes prominently include a) increased retailer power, b) a move in production towards ‘flexible production’; and c) an overall refinement in logistics to achieve high efficiency by lean inventories and just-in-time principle (Bonacich & Wilson, 2008). These forces fundamentally affect the nature of work in this logistics and last-mile delivery, or even amount to a ‘wide-ranging assault on labour’ (Danyluk, 2017, p.7). Thus, while logistics enabled integrated production networks and

facilitated expansion to raw materials, and consumer and labour markets for firms (Danyluk, 2017), the availability of low-cost labour discourages capital investments and supports labour arbitrage (Coe, 2014). According to Newsome (2010), the ultimate driver of working conditions in logistics to be the demands embedded in contractual relationships with the key clients: large retailers.

2.3. The Position of Last-Mile Delivery Workers

Overall, the literature is strongly implying that last-mile delivery workers are subjected to worsening bargaining conditions. As the logistics sector has been essential in the establishment of global integrated networks governed by major (r)e-tailers, the consequences reciprocally reflect on workers within the sector itself. The trend of declining wages and working conditions is linked to weakened unions and labour segmentation, while at the systemic level, it is argued that enhanced retailer power contributed to this contingency through outsourcing and a ‘low-road’ approach (Bonacich & Wilson, 2008). Moreover, it is suggested that global capital is exceeding the ability of nations to regulate it (Coe, 2014), which implications transcend merely economic aspects, but also reshape concepts of security and citizenship (Cowen, 2015). According to Coe (2014), workers in the transport sector, in

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14 particular, are subjected to forces of globalization, deregulation, fragmentation of production and technological change.

` The overall power of lead firms has established particular strategies and dynamics that undercut decent labour conditions. Bonacich & Wilson (2008) conclude that logistics workers essentially ‘serve the circulatory system of global capitalism’ (p.22), as companies exercise a ‘low-road’ model with regards to workers. Within this model, four dimensions are identified: a) an increasingly contingent workforce; b) pressurized and thus weakened organized labour; c) a

racialisation of the workforce; and d) lowering of labour standards becoming a defining characteristic of logistics labour markets. Downward pressure on labour is a prevalent value-creation strategy in logistics through multiple tactics (Gutelius, 2014). Haidinger & Flecker (2015), for example, described a prominent tactic to be ‘the bypassing of employment protection by outsourcing, or by utilizing labour

not covered by the ‘original’ sectoral employment regulations, [which] contributes to [an] uneven distribution of wages and working conditions in a sector’ (p.67). Additionally, the common presence

of temporary agencies in logistics professions amounts to a constant process of enrolling, expelling, and re-enrolling workers and the creation of hierarchies based on social difference and competition (Gutelius, 2014).

Furthermore, the nature of the work has also profoundly changed; for example, algorithm calculations have trouble controlling the complex space-time coordination involved (e.g. traffic congestion and timed delivery slots), meaning that the challenge for drivers is to do everything just-in-time without running out of just-in-time (Gregson, 2017). In sum, an interplay of diverging processes has led to the overall downward pressure on working conditions, and the strengthening of a generally

subordinate power relation between labour and capital.

2.4. Labour Agency

Labour agency is often overlooked in research, based on the notion that capital exhibits a greater relative geographic mobility, compared to that of labour and can therefore exert dominant power over workers. However, Castree et al. (2004) emphasize the geographical complexity that is involved, arguing this notion is accurate but overstated. They state that ‘neither employers nor workers can satisfy their individual and group interests within the confines of capitalism alone’ (p.39). For example, companies cannot fully control the quality and quantity of the aggregate labour market, and will have sunk costs when they move their business. Therefore, capital and labour are interdependent, which creates space for labour agency. It is repeatedly argued that labour agency is underdeveloped within GPN approaches, as the firm is at the heart of this approach (e.g. Coe, 2014; Gutelius, 2014; Rainnie et al., 2011; Sowers, 2017).

Labour power emerges from the structural, strategic position that workers have within the production networks and the global economy as-a-whole. Additionally, labour agency potential depends on the practical means workers have at their disposal to actually exploit these ‘choke points’.

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15 Hence, workers face advantages and constraints as two opposing forces, arising from macro-structures, embedded in local networks of actors like states, firms, consumers, and civil society organizations (Dicken, 2004). According to Castree et al. (2004), the ‘power repertoire’ of labour is predominantly constrained by two factors: a) structural constraints (e.g. strike prohibitions) that may limit the options workers possess, and a) hegemonic power that may establish subordination through dominant

discourse.

2.4.1. Structural Power Relations

Herod (1997) labels such models wherein the distribution of workers reflects the decisions made by capital as a ‘geography of labour’. However, he argues, workers do shape the world in accordance with their intent of self-reproduction, just like capital is looking for this ‘spatial fix’. Workers can thus redefine their own position at a place, which will reflect on developments elsewhere. This active perception of labour is dubbed a ‘labour geography’ by Herod. To varying extents, both workers and firms are place-based, though not fully place-bound (Castree et al., 2004).

Coe & Jordhus-Lier (2011) critically draw upon the notion of ‘labour geography’, and propose the concept of ‘constrained agency’, since workers constantly operate within complex and variable spatial and temporal landscapes of opportunity and constraint. This makes the position of workers in logistics an inherently geographical issue, involving both the distribution of the benefits of globalized production, and the distribution of opportunities and exclusion (Gutelius, 2014) . Rainnie et al. (2011) point out that GPN analysis has received a growing interest with regards to understanding power relations and, subsequently, identifying vulnerabilities and points of leverage for workers to exploit. They highlight that ‘the key for the workers, of course, is to know something about the geography of

the supply chain so that they may identify ‘choke points’ that can be easily struck to great effect’ (p.

165). Labour is thus treated as both an essential source of value, and a subjective agent, exemplified by cases of successful labour action with tangible results.

2.4.2. Modes of Action

Overall, a multitude of studies highlight how occupations within logistics exhibit aspects of precariousness, like in warehousing (Benvegnu et al., 2018; Bonacich & Wilson, 2008), planning (Cowen, 2015), and delivery (Gregson, 2017; Haidinger & Flecker, 2015). While different contexts require different modes of action, many studied cases (i.e. Anner, 2015; Benvegnu et al., 2018; Haidinger & Flecker, 2015; Selwyn, 2007) imply some recognition of leveraging power by workers in the logistics chain which has led to limited success in diverging contexts around the globe. It

emphasizes the importance of recognizing varied geographical and institutional contexts that shape adequate labour action and its potential

Historically, labour agency often manifests itself in labour unions, which is therefore also a common object of study. However, a representational gap left by unions in the logistics sector is often observed (see Benvegnu et al., 2018). Though inclusive union strategies should be able to incorporate

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16 different workforce groups and enable grassroots action, difference exists due to a) union structures, and b) competence to support worker solidarity (Benvegnu et al., 2018). A useful distinction in labour action is made by Katz (2004), between resilience, reworking, and resistance strategies. Resilience enables people to survive without significantly challenging the status quo; reworking encompasses attempts to redistribute power and resources; resistance relates to rare acts of undermining and providing alternatives to the status quo, and creating oppositional consciousness. These concepts are suggested to be mutually reinforcing.

Overall, Haidinger & Flecker (2015) broadly assess that “the vulnerability of integrated,

time-sensitive logistics potentially provides workers with positional power [but] the fragmentation of employment and casualization of labour prevent the formation of associational power” (p. 65). On the

other hand, Selwyn (2007) argues the trend towards lean, limited stocks and meticulously planned delivery also provides new sources of structural power. Additionally, it is stressed that power is also a matter of perception, as: “Power is not simply something objectively bestowed upon actors with more

resources but largely depends upon subjective understandings, perceptions of reality, and

interpersonal understandings of social phenomena” (Sowers, 2017, p.7). The acknowledged processes

of labour segmentation, (geographical) separation, eroded unions, and perceived power all help to explain how current dynamics in logistics cannot be reconciled with the theoretical positioning of the logistics industry as a particularly powerful site for labour gains.

A framework proposed by Sowers, Ciccantell & Smith (2017) offers a helpful tool to evaluate the disruptive potential of workers. They offer several analytical factors that affect effective

organization: 1) material characteristics, like fixity and volume of the commodity; 2) economic characteristics, like the value of units; 3) political characteristics, like the regulatory regime and legal system; 4) social characteristics, like presence of organizations and public support; and 5) labour characteristics, like contract terms. These characteristics add up to certain time- and place-specific ‘choke points’ that can be exploited by workers.

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2.5. Concluding Remarks

This chapter has addressed two prominent forces labour faces in current times: globalization and technological change. The pivotal position of logistics has been enabled by technological advances in (intermodal) shipping and ICT, and has strongly enabled globalization. These forces strongly affect labour; globalization has increased global firm competition and opened up whole new labour pools, while labour standard regulations eroded and unions declined (Kalleberg, 2009); and technological innovation has made formerly middle-class, stable jobs no longer necessary or less valuable, as a manifestation of ‘biased technological change’ (Wajcman, 2018). The intricately related rise of uncertain, temporary and flexible jobs that affect the core of people’s life, is characterized by the term “precariousness”.

However, it is argued that the way the effects of these forces play out for labour, strongly depend on local contexts. Regarding this core topic of this thesis -last-mile delivery workers in the Netherlands- the overall rise of retailer power is essential (see Bonacich & Wilson, 2008; Coe, 2014; Gereffi, 2014), as the demands embedded in contracts with key retail clients are said to be “the key driver” of working conditions in delivery (Newsome, 2010). Exerting downward pressure on labour costs is a prevalent phenomenon for firms in capitalist systems in order to remain competitive. The logistics revolution has only expanded the options for firms to pursue this quest, as this ‘logistical fix’ is considered as the ultimate competitive advantage (see Danyluk, 2017). The issue for workers is how to counter these strong headwinds. On a more systemic level, it is a moral issue for everyone what labour conditions are deemed acceptable, how labour and capital interests should be balanced out, and who is responsible for enforcing this. An array of factors can alter the practical implications for these workers (see Sowers, 2017), as these many forces are interconnected and interdependent in complex ways. Hence, development of a sector or region is neither ‘one-size-fits-all’ (Rodriguez-Pose, 2013), nor should it be ‘overterritorialised’ (Hess, 2004).

A study of the strongly expanding last-mile delivery sector aligns with the need for more knowledge of firm-level evidence on social and economic upgrading (Arnzt, Gregory, Lehmer, Matthes & Zierahn, 2017; Coe, 2014) and on the emerging trend of non-standard employment relationships that challenge the status quo (Standing, 2011; Vosko, 2010). As the sector exhibits exemplary or even extreme elements, it is a particularly relevant case to assess the position of workers amidst technological change, flexible work, neoliberal policies and changing consumer expectations. Investigating the position of labour and labour agency potential in last-mile delivery is meant to reveal and exemplify these complex dynamics, concerning an interplay of macro-trends and regional

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3. Methodology

In this chapter, the methods employed to answer the research question are presented and discussed. The research attempts to assess the fundamental characteristics and processes at play in the last mile delivery sector in the Netherlands and, subsequently, to analyse and evaluate labour agency realization and potential within this sector. A qualitative, mixed methods approach of content analysis and semi-structured interviews was applied, to include both objective characteristics and subjective perceptions. The research question was divided into four sub-questions, in support of analytical depth and clarity:

RQ: How do current dynamics in last-mile parcel delivery contribute to opportunities and constraints for labour agency in last-mile delivery sector in the Netherlands?

- SQ1: How has the position and nature of work within the delivery sector changed, in the past decades?

- SQ2: How can the current position of employers and employees in the sector be characterized?

- SQ3: What structural advantages and constraints do workers experience in leveraging their working conditions?

- SQ4: What strategies can be employed by delivery workers, to improve their working conditions?

3.1. Design

This research is a case study of a specific sector in a specific place, exemplifying broader theoretical and practical implications regarding precariousness of labour. Since many contexts overlap in complex ways, a case study is most appropriate for ‘research of actual phenomena within a real-life context, especially when boundaries between phenomenon and context are not evident’ (Yin, 1994, p.13). The broader implications of the findings and generalizability are contestable, so this study mainly addresses the manifestation of the topic in a specific context. The intention is to study the context-specific way labour processes are affected by global trends and local contexts, serving as an extreme case. By focussing on the power vested in labour agency, two opposing processes are emphasized: advantages and constraints. A framework proposed by Sowers, Ciccantell & Smith (2017),

distinguishing five dimensions, is utilized for the analysis of structural and contextual advantages and constraints. It consist of a material, economic, political, social and labour dimension. These

dimensions contain particular analytical characteristics that are shaped by networks of firms, states, and social actors in a specific spatial and temporal context. A conceptual model is presented in Figure 3, with an operationalization of concepts in Table 1. To assess, understand and evaluate labour agency potential and its related, underlying forces, a combination of content analysis and semi-structured interviews was employed.

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Fig 3. Conceptual Model. Framework of macro-structures and networks of interaction adapted from

“Geographers and ‘Globalization’: (Yet) another missed Boat?”, by Dicken, P., 2004, Transactions of the

Table 1. Operationalization of Concepts

Concepts Labour Conditions Labour Agency Potential

Dimensions Employment Conditions

Working Conditions

Material Economic Political Social Labour

Indicators Salary (hourly) Sense of Work Load b/o Targets Fixity Value of Commodity Regulatory Regime Social Movements Labour Organization Additional Costs and Investments Sense of Pressure b/o Monitoring Volume/Scale of Flows Value/Volume Ratio Geopolitical Context Public Support/ Opposition Contract Terms Weekly Hours (in Reality vs. Desired) Sense of Influence over Work Routine Alternative Forms Capital Intensity Laws and Legal System Consumer Behaviour Tightness of Links Temporality of Contract Sense of Leverage in Firm Negotiations Technological Susceptability

Labour Share Levels of Jurisdiction

Sense of Security about Future

Note. Evaluative dimensions of potential labour agency adapted from “Are Transport and Raw Materials Nodes

in Global Commodity Chains Potential Places for Worker/Movement Organization”, by Sowers, E., Ciccantell, P.S. & Smith, D.A., 2017, Journal of Labor and Society, 20, 185-205. Copyright 2017 by Elizabeth Sowers, Paul

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3.2. Strategy and Data Collection

This research has attempted to acquire a deep understanding of labour agency processes in last-mile delivery through a qualitative content analysis and semi-structured interviews. Though partly borne out of time constraints, these methods are complementary, as they connect facts and perceptions in a continuous fashion to assess the current state and historical trajectory of the last-mile delivery sector, and the position of labour within it.

3.2.1. Qualitative Content Analysis

Qualitative contentment analysis serves as a primary method. A qualitative approach is employed as the aim is to understand the content, rather than quantitatively measure the data itself (Verschuren & Doorewaard, 2010). As is becoming increasingly common in qualitative research, however,

quantitative data is incorporated through the utilized sources (Given, 2008). The data is comprised of articles, reports and policy documents that were acquired by electronic search indices. As Verschuren and Doorewaard (2010, p.232) note: ‘interviews and observations complement one another’;

interviews highlight motivations, but cannot be used as irrefutable evidence in mapping actual behaviour. The reverse applies to content analysis. Therefore, there is opted for a combination of two methods in assessing the current situation and historical trajectory of the sector, and the position of labour within it. Since media are subjected to editing, triangulation of sources is pursued in data collection.

For the content analysis, the eight biggest newspapers of the Netherlands were consulted in their coverage (but excluding free newspaper ‘Metro’, and including general press service ‘ANP’ and ‘Parool’, because of their extensive coverage), regarding several keywords, from 1990 until May 31, 2018. Through LexisNexis, relevant and enlightening articles were selected, primarily based on their titles. Consulted news sources comprise of the biggest newspapers in the Netherlands: ANP; De Telegraaf; Algemeen Dagblad; De Volkskrant; NRC Handelsblad; Trouw; Financieel Dagblad; and Parool. For article selection, Dutch translations of “deliverer” (107 hits), “delivery” (294), “PostNL” (364), “TNT Post” (317), “DHL” (201), “DPD” (44), “GLS” (155) and “parcel service” (167) were searched for in article titles.

Articles were chronologically arranged and, based on the title and date, it was directly assessed which articles were broadly relevant with regards to the position delivery workers. Amongst other things, this includes articles about labour action, technological implementation, operating results and acquisitions, policy-making, and overall (mail/parcel) market developments. It must be noted that a vast overlap was majorly present, as significant events like court rulings were covered by most newspapers. In these instances, only the one or two articles with the largest lengths were actually read. All relevant (parts of) articles were collected in documents that were organized per key word.

Subsequently, selected articles were coded according to their relevance regarding to the indicators of ‘labour conditions’ (see section 3.3).

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3.2.2. Semi-Structured Interviews

Semi-structured, in-depth interviews with several stakeholders involved in last-mile delivery were employed in conjunction with the primary method. Semi-structured techniques were used to keep interviews on-topic, while also ensuring that interviewees have the opportunity to elaborate on the topics they deemed important (Bryman, 2012). The method of qualitative interviewing has

fundamental limitations, of course : a) interviewees may (consciously or subconsciously) leave out things, and b) the data depends on the participants’ ability to reflectively distinguish aspects, and communicate this effectively (Boeije, 2010)

While standardization is undesirable because it undermines ideal of open-endedness, transparency of methods should enable ‘virtual replication, at the least’ (Boeije, 2010, p.174). Considering time limits and the limited access to a pool of stakeholders beforehand, convenience played a large part in participant selection. While many stakeholders (e.g. government officials, union leaders, and delivery/retail managers or spokespersons) were approached by e-mail, with the union FNV occasionally functioning as mediating actor, this eventually resulted in only three interviews. Alternatively, personal contacts had to be utilized to establish a connection to acquaintances involved in the last-mile delivery sector. Though this form of selection by convenience may attribute to skewed results, triangulation of sources and a mixed-methods approach limit this effects; for the content analysis, multiple different news sources are included; for the interviews, a multi-stakeholder design is wielded. The division of interviewees is displayed in the following table:

Table 2. Overview of interviewees.

The duration of the interviews ranged from twenty minutes to one hour, while the average duration is estimated at approximately half an hour. Though topic lists were strongly adapted for different stakeholders, general themes included overall conditions and developments, cross-stakeholder relationships, price determination and the responsibility over risks. It provided more insight in the informal processes and personal perceptions that shape labour conditions and contentment, which is not prominently featured in media sources.

3.3. Analysis

The research consists of several sub-questions that depend on each other in an aggregating manner. These questions are addressed by grouping the acquired data into generated categorisations that reflect the defining processes at play. Regarding the first sub-question (SQ1), prevalent themes in the explicit

Stakeholder Number of Interviews

Delivery Workers 4

Delivery Manager 2

Union Leadership 1

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22 development of the sector emerged from the contents of articles and the chronological course of analysis. Regarding the other questions, thematic categories were generated after establishing the broad developments of last-mile delivery in the Netherlands in the last decades, and corresponding to the determined indicators. As a result, the current state of the sector (SQ2) is ordered through its operational, organizational, and labour characteristics (in Ch.4).

Interviews were transcribed, and categorised in a similar manner as the newspaper articles, in order to assess contemporary labour conditions in last-mile delivery (SQ3). Thematically overlapping sections from different interviews were physically coded on printed paper and digitally clustered by theme in separate documents. Subsequently, the experiences of interviewees were combined with more quantitative data (from newspapers and reports) in order to ground these findings in a broader reality. These labour conditions are ordered through a categorization of (formal and informal) rewards, (responsibility over) risk, and work routine (in Ch.5).

Regarding the last sub-question about (constrained) labour agency potential (SQ4), an established framework proposed by Sowers, Ciccantell & Smith (2017) was applied, which created more clarity and depth by dividing these dynamics into a material, economic, political, social, and labour dimension. This analysis combines findings of previous sub-questions, but utilizes a different and predetermined categorization (in Ch.5). In the concluding chapter, findings were evaluated in comparison to earlier studies of logistics, last-mile delivery, labour agency and its relevant contexts (Bonacich & Wilson, 2008; Castree et al., 2004; Cowen, 2015; Sowers, Ciccantell & Smith, 2014; ).

3.4. Limitations

Workers are positioned in extremely complex dynamics, which is why multiple stakeholders are portrayed and interviews. However, time constraints have resulted in a limited sample size of media sources and interviewees. Thus, saturation is not reached on many fronts, which implies that a) some ostensibly interesting processes are excluded from this thesis, and b) generalizability is even more limited.

Initially, the research focus was more centred around perceptions of workers, but major difficulty accessing this labour pool has been troublesome, which shifted more gravity towards the content analysis. The small number of stakeholders that is included implies that findings are skewed towards their perspective, while such a representation of governmental or retail firm perspectives is missing from this research, altogether. Thus, accessibility problems and ‘convenience sampling’ have established a highly selective sampling strategy. Time constraints have also created a selective method of analysis, by only including specific keywords and interview items. While every research

encompasses delimitations, the extremely complex processes involved within this topic are particularly simplified. Hence, this research predominantly provides insight in the conditions, opportunities and constraints manifested in a small, but significant, occupational sector in a specific spatiotemporal context.

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4. The Historical Trajectory and Present State of the Last-Mile Delivery

Sector in the Netherlands

4.1. A Trajectory of Changing Labour Relations

The delivery sector has seen significant ruptures in recent decades. From the 1980s onwards,

privatisation and a revolution of Internet and logistics capabilities has established an overall pattern of strong competition and automation, amidst decreasing mail volumes and increasing parcel volumes. This has contributed to a stark departure from standard employment relationships. Through a content analysis of newspaper articles, PostNL is investigated as an exemplary case of the processes transport firms have undergone, and the consequences this bears on its workers.

4.1.1. From Domestic Provider to Global Player, and Back Again

PostNL has shapeshifted many times since its establishment in 1799, but it was de facto a state-owned company for most of its existence, offering nationwide mail, telegraph, telephone and banking

services. From the neoliberalist resurgence in the 1980s onwards, these divisions were eventually all formally liberalised. The company demonstrated its global ambitions when it acquired Australian TNT and GD Net (through a joint venture) in 1996. It was a massive quantitative and qualitative shift. First, revenue was more than doubled to an estimated €13 billion, with UPS (€33 bln), FedEx (€16 bln), and the now-leading DHL (€6.4 bln) as its main global competitors (“Overname TNT”, 1996). Second, as the company’s director stated, the actions indicated ‘a shift from domestic mail delivery to global, time-sensitive distribution and logistics’ (“2,7 Miljard voor Australisch TNT”, 1996). Indeed, the segment of (international) logistics and parcel services expanded at once from16% of revenue to a majority of revenue (“Overname TNT”, 1996). While these acquisitions provided the then-called TPG with a head start, the competition was expanding quickly, as well. In 1998, TPG was the leading parcel delivery firm in Europe, and fourth in the world (Van Nieuwstadt, 1998).

However, at that time Deutsche Post became involved with DHL, providing heavy competition in Europe, while all major players turned their attention to Asia, where goods were increasingly fabricated for world markets. Like TPG in the 90s, firms were expanding in size and global presence through acquisitions, partnerships and joint ventures. As was assessed in newspaper Trouw: “the mail market [has] awakened from a decade-long hibernation” (“Deutsche Post

Versterkt”, 2005). With the prospect of liberalisation of all European mail markets, many strategic strikes were dealt, though it must be noted that liberalisation across Europe was unequal in time and extent. Though it was initially due in 2003, the Netherlands realised formal liberalisation in 2009, while the Belgium government still had a majority share in the company BPost when they attempted to take over PostNL in 2016 (Cohen, 2017). Hence, competition took place on a constantly shifting playing field.

This fierce competition across the world was not only based on size and cost advantages, but also on the capability to offer “door-to-door delivery” rather than “terminal-to-terminal”, according to

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24 TPG’s director (Yessayan, 2005c). In a turbulent period, these firms had quickly evolved into globally integrated giants. Already in 1998, TPG invested 125 million guilders in a flight hub at Luik Airport (“TNT Post Via Luik”, 1998). But a few years later, competitors were overshadowing TPG (now rebranded into TNT), lacking the critical mass to compete on the global stage (Yessayan, 2005a). Though the acquisition of TNT in 1996 provided the company with an excellent position, some contentious investments, managerial problems, tax inquiries, and hesitancy with acquisitions

hampered its growth (relative to competitors). Either a merger (with Japan Post), or an acquisition (by UPS and CVC) was on the table (Yessayan, 2005a). The situation mid-00s was described as follows:

“It is not that the company massively blundered, or is unhealthy [but] TNT has been cautious with

acquisitions [while] there was also some back luck. TNT never seemed in the position to await its chances and strike. Since 2000, there has not been a year where nothing misfired […] TNT is healthy and crippled at the same time. And in in those circumstances, the hyenas appear” (Yessayan, 2005b).

Eventually, TNT Logistics was sold but the company persisted to focus on parcel and express deliveries by acquisitions in China (“Nederlands Postbedrijf”, 2005) and Germany (“TNT Versterkt Aanval”, 2006) where state monopolies were expiring. Of course, the internet and e-mailing were becoming more and more commonplace in society, signifying a decrease of mail volumes in the years to come, amidst intense competition and an imminent liberalisation. Though at that time, domestic mail delivery was still the cornerstone of TNT, responsible for two-thirds of operating results

(“Slinkende Marges”, 2006), an unprecedented round of dismissals would soon follow; in 2006, 1,100 jobs in sorting centres disappeared (Goebert, 2006), while in 2007, it was announced that 7,000 jobs would disappear (1 out of every 8 jobs) with zero or negative wage mutations for 2.5 years. If the latter would not be applied, 11,000 jobs were said to terminated (Goebert, 2006). Meanwhile, aside from job losses, the liberalisation of mail delivery also signalled changing labour relations starting to materialize in the sector. Emerging domestic competitors (predominantly Sandd and SelektMail) applied different kinds of labour arrangements, amidst automatization, shrinking volumes and strong competition.

4.1.2. Transforming Labour Relations

In 2007, TNT wrote a letter to Parliament, stating: “it is clear that if no bottom is maintained in labour

conditions, mail deliverers will increasingly be placed outside of conventional labour contracts and its corresponding protections” (Van Lierop, 2007). Sandd and SelektMail objected that they could not

afford other arrangements because of smaller volumes, and that stronger competition would not occur if they needed to pay hourly wages (Van Lierop, 2007). Additionally, both firms expressed that they were complying with regulations, as absence of a labour contract establishes that minimum wages do not apply, and that average wages ranged from €7.50-8.15 (against a minimum wage of €7.41, back

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25 then)(Van Lierop, 2007). Of course, average measures do not display distribution and spread; Some workers could receive less than minimum wage over certain periods, while lacking social securities like pensions and collective insurance. Interestingly, PostNL had erected a subsidiary with similar constellations as well, Netwerk VSP, while the main firm had been moving towards shifting work from (full-time) postmen to (temporary and part-time) mail deliverers since 2003 (Goebert, 2006). In the Financieel Dagblad, the following was assessed:

“What stands out, is almost a mirror image. Newcomers force former monopolists on the defensive in their traditional home market. At the same time, those former monopolists behave like aggressive newcomers abroad, to compensate the high pace of market share loss in their home market”

(Yessayan, 2006).

In Germany, for example, TNT filed a lawsuit against the government that imposed a minimum wage on mail delivery by reasoning that they offer different services and thus operate in a different sector (Dekker, 2008). In 2009, amidst an economic crisis, the mail market was fully liberated, enabling payment per piece, subcontracting and other constellations and marking the end of the traditional postman. By then, their labour conditions were transcended the precarious state of the sector. PostNL stated they went from a “breadwinner model” to a “part-time model” (Van der Heide & Veldhuis, 2009), while Sandd and Selektmail portrayed the job as an “additional income” (Van

Lierop, 2007). In Trouw, it was asserted that: “In 2000, a postman earned enough to send their

children to university, now deliverers get less than minimum wage” (Dekker, 2008).

In the 2010s, several strikes and lawsuits ensued; In November and December of 2010, there were six days of strikes within three weeks at PostNL against the numerous dismissals (“Postbodes Haken Af”, 2010); in In July 2015, a group of ‘self-employed’ parcel delivery workers performed a streak strikes for five days, against the lowering payments per piece (Van der Most, 2015). A new status quo has not been reached yet, as workers are battling on two different fronts: a) long-time workers trying to protect their former conditions, and b) a part the zzp-workforce trying to maintain a beneficial arrangements. In between, there is also a significant group for whom current arrangements seem satisfactory. Students, for example, do not attribute great importance to pension savings and insurances against unemployment and illness (yet). Moreover, these conditions also offer chances for those formerly excluded from the labour force (because of e.g. physical or time constraints).

Meanwhile, there is also a reactionary, backward trend emerging: Though it was already a prerequisite when the mail market was liberalized in 2009, in 2018, 80% of the workforce in mail delivery was in permanent employment again (Cohen, 2018).

The continuous reshaping of labour conditions strongly relates to the organization of PostNL still being in flux. The company is clearly advancing towards parcel delivery, with the expectancy that over half of revenue stems from e-commerce in 2020 (“Compensatie voor Post”, 2018). As can be

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26 observed in Fig. 4, both the growth of parcel volume and decline of mail volume resulted in an

enormous expansion of the parcel share (from 36% to 42%) between 2017 and 2018. However, margins on parcel delivery are much lower than mail delivery, back when PostNL still held a

monopoly. In 2006, domestic mail delivery was instrumental to PostNL, with an operational margin of 18.8% (“Slinkende Marges”, 2006). In 2017, that margin was 5.8%, overall, while the margin on mail was still 6.8%, highlighting the difference (“Compensatie voor Post”, 2018). The overall margin even dropped to 4.3% in the third quarter when competitor Sandd started offering cheaper mail stamps for Christmas cards (De Jong, 2017).

Fig. 4. Relative (in %) and Absolute (in million €) Value of Parcel Delivery at PostNL. Adapted from Compensatie voor Post, by Financieel Dagblad, May 8 2018. Retrieved May 22, 2018, from www.fd.nl.

In this changing landscape, new conflicts are arising. Already in 2015, a court ruled that a few involved zzp-workers who were fired, should indeed be classified as employees. The verdict reasoned the following:

“Subcontractors solely work for PostNL and are therefore, and because of the investment in a van

under the conditions of PostNL, in an economically dependent position. Given the circumstances, independent entrepreneurship is lacking, and are all essentials of a labour contract deemed present”

(“PostNL Zet Actievoerende Pakketbezorgers”, 2015).

While PostNL and other firms vowed to offer better conditions, strikes, lawsuits and criticism from unions and the parliament continued (Bongers, 2017). The sector was more closely monitored, after inspections indicated that work in parcel delivery exhibited high workloads that seems worse for subcontractors who potentially could be classified as employed workers (Ministerie van Sociale Zaken en Werkgelegenheid [SZW], 2017). In 2016, the labour inspection threatened with fines if laws on

The last mile is the longest : opportunities and constraints for delivery workers in an emerging platform economy