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Transport sector needs stronger unions, more dialogue – report

May 19 2016 07:41
Carin Smith

Leipzig – Changes in supply chain management have had positive impacts on job creation, but detrimental impacts on social dialogue, worker representation and decent work conditions in the transport and logistics sector, according to a report by the International Labour Organisation (ILO).

The report has found that substantial wage differences across countries are of concern for the promotion of decent work in the sector. On top of that labour and skills shortages and high turnover rates could be linked to inferior or difficult working conditions and lower wage levels.

Social dialogue, representation and unionisation rates should be strengthened in the transport and logistics sector, according to the ILO.

It is estimated that, on average, logistics costs account for between 15% and 25% of the final cost of finished products in the developing world. Due to inefficiencies, this is a higher average than in the developed world.

Increasing accessibility of low-cost sourcing regions and the ability of buyers to shift sourcing to new production facilities according to the availability of low production costs - including wages – have also impacted the sector.

The report found that, from the perspective of developing countries, social upgrading will require coordinated action by both government and big companies. Government involvement is also regarded as very important to promote and enforce standards and regulations relating to decent work in the sector and to provide enabling conditions for effective inspection mechanisms to be put into place.

The ILO points out that the expansion of global supply chains has raised questions about the role of business in global governance of labour practices.

It has found that in the transport and logistics sector initiatives that specifically address decent work are limited. At the same time transport and logistics play an increasingly important role in value creation in economic growth nationally and globally.

Although higher wages in the sector can result from collective bargaining agreements, generally global competitive processes have placed downward pressure on wages and working conditions – especially for road transport workers.

At the same time there is mounting evidence of a global shortage of skilled workers for the logistics industry.

* Fin24 is a guest of the International Transport Forum’s global summit.

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