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Today's Pickup: Germany Moves To Tighten Rules On Delivery Subcontractors

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Today's Pickup: Germany Moves To Tighten Rules On Delivery Subcontractors

Good day,

Germany's cabinet backed a proposed law that will require companies to pay social security for contractors who deliver parcels.

The cabinet approved the draft legislation on Sept. 18. If approved by Parliament, it will require employers to pay social security taxes for contracted workers, even though they are not employees.

The legislation came in response to police raids at delivery providers in February. Police found violations in a sixth of subcontractors including failure to pay the minimum.

With the growing volumes of packages being delivered by online retailers, firms like Amazon.com, Inc. (NASDAQ: AMZN) have increasingly turned to contractors for deliveries. Amazon told Reuters that the proposed German law would not affect the company's operations, saying that its relationships with contractors already comply with the law.

The legislation now heads to the Bundestag for consideration.

Did you know?

The forthcoming PAL-V Liberty flying car will travel up to 350 miles by air or 820 miles by road on a single 26-gallon tank of gas. Unfortunately, it's rated for only 44 pounds of cargo.

Quotable: 

"While some may view this as the bottom in shares, we don't see any support until management takes responsibility for recent performance and clearly articulates a credible path to better results and cash flow (and delivers on it). In the meantime, shares will continue to melt lower, and rightfully so."

— Deutsche Bank analyst Amit Mehrotra on cutting his price target of FedEx Corporation (NYSE: FDX) after it posted weak earnings.

In other news:

UK sandwich-makers stockpile ingredients, adjust recipes ahead of Brexit

Makers of packaged sandwiches are preparing for a no-deal Brexit by stocking up on ingredients, finding alternative suppliers and changing their recipes. (Financial Times)

Idelic closes on $8 million in financing

Trucking safety startup Idelic raised $8 million in its latest round of funding. (Pittsburgh Post-Gazette)

Helibras awards CEVA new five-year contract

Airbus-owned Brazilian helicopter producer Helibras awarded CEVA Logistics a new five-year contract covering transport and warehousing services at two plants. (Post and Parcel)

Texas trucker pleads guilty in migrant-smuggling case

A trucker in Texas faces up to 10 years in federal prison after pleading guilty to attempting to smuggle more than 70 migrants into the United States. (AP)

Tariffs could be good for discount retailers

So-called off-price stores like TJ Maxx could benefit from tariffs because of order-cancelation for full-price retailers. (MarketWatch)

Final thoughts:

Germany's efforts to rein in contracting practices for final-mile deliveries come as Amazon builds up its logistics operations in the country. The company told Reuters on Sept. 17 that it has begun hiring drivers and plans to open 11 additional distribution centers.  

As Amazon handles more of its own logistics in Germany, the company will be positioning itself as a greater threat to Deutsche Post-DHL.

Hammer down everyone!

Image Sourced from Google

Posted-In: DHL Freight FreightwavesNews Eurozone Global Markets General

 

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