Across the logistics sector, companies are taking their environmental, social and governance (ESG) responsibilities with increasing seriousness. 

According to the 2023 UK Logistics Confidence Index, 62% of logistics leaders are now pursuing ESG projects, with a focus on environmental improvements, including reduced emissions and more sustainable packaging. That’s good news, but the fact remains that the sector doesn’t yet have a great reputation for the way it treats its employees. The vast majority of people working in logistics are employed in warehouses, where standards of employment are, to say the least, inconsistent.

Corporate reputations in the sector have been taking a big hit because of this. Amazon.com in particular has been the subject of numerous claims of the poor treatment of its employees – most recently in California in June, where the company was fined $5.9 million for reportedly working warehouse employees so hard that their safety was at risk. But Amazon is not alone. Many similar cases have been published in the media, with claims against recognizable brands like UPS, and also against other less-prominent operators that work with well-known brands. Stories of labor abuse in developing countries are common. 

According to Gi Group Holding, logistics employees make up between 5% and 10% of the global workforce, which is a staggering statistic. There’s an urgent need for logistics companies at the top of the chain to make sure that not only their own employees, but also those of their suppliers, are treated well no matter where they’re based.  

So where should businesses start? With multiple links in the chain — and, for many  logistics companies, thousands of suppliers — it’s not as simple as issuing an edict that will flow smoothly down the line. Upholding standards at your own distribution center in Arizona feels a long way from doing the same at a warehouse in a remote area of Tanzania operated by a third party. Following, though, are some steps that you can take now that will put you on the right path. 

Start by building relationships. Perhaps the most important point to remember is that you’re engaging in a working relationship with your suppliers, not establishing a dictatorship over them. Set out your expectations clearly in a code of conduct, but work with suppliers to set deadlines that make these achievable. This will often require a multi-year plan that outlines not only the goals, but the resources and processes needed at each stage. 

Ask the workforce. Fear often holds companies back from making changes. For example, a supplier may be reluctant to ask employees what would improve their working conditions in case they’re suddenly presented with a long and unachievable list of demands. In practice, this rarely happens. When given the opportunity to express an opinion, workers often put forward uncomplicated requests, such as childcare support, more flexibility in shift patterns or simply improved communication.

We therefore recommend that companies proactively canvass employees to ascertain their needs. Even if the list of requests exceeds an employer’s ability or inclination to meet them, a few small changes can make a huge difference. In the main, people appreciate being asked the question and seeing an improvement — however small — as a result. 

Emphasize the benefits for the employer. From the employer’s point of view, these small changes can make a significant difference to staff retention. For many workers, support with childcare will be more important than a small increase in a daily wage.  

When you ask workers what they want, you see trust in management grow. This in turn helps your supplier feel able to provide transparency when working with you. 

Find out what works. Not everything that works on your home territory can transfer successfully. For example, old school management solutions like suggestion boxes are unlikely to be successful in a territory where dialogue with management is rare. In such cases, grievance mechanisms may need to be managed by a trusted third party to allow workers to feel sufficiently confident to raise their issues. As part of the Ethical Supply Chain Program, we’ve set up a free confidential Worker Helpline in China and Vietnam, which factory workers can use to express their concerns or personal problems without fear. This is staffed by trained employees who liaise with management to resolve issues where appropriate.  

The logistics sector touches the lives of almost everyone on the planet and is perfectly placed to take a lead in the ESG field. We’re already seeing some phenomenal steps forward in sustainability — we just need to make sure that we don’t forget about the people.

Carmel Giblin is chief executive officer and president of Ethical Supply Chain Program.