Amazon was issued a huge fine, and sellers' logistics costs may increase!

It is understood that the reason why California regulators issued the fine was that Amazon 's logistics contractor, Santa Ana Express, had a large number of delivery drivers in arrears of wages.

California regulators said a year-long investigation found that more than 700 delivery drivers who were owed minimum wage were being forced to work 10-hour shifts and were being held back on work.

When the order volume is high, these delivery drivers have to work more than 11 hours, which means they have to skip meal and rest times to complete the assigned delivery work.

Amazon has a massive delivery fleet, but it relies on a complex network of regional contractors like Santa Ana Couriers to employ many of the drivers who operate those vehicles.

This means that Amazon can transport goods for sellers at lower logistics costs.

But California Labor Commissioner Lilia Garcia Brower said outsourcing does not relieve employers of their responsibility to ensure workers are legally compensated, and in this case both Santa Ana Express and Amazon should be held accountable for the unfair treatment of these workers.

In this fine issued by California regulators, Amazon paid a higher amount. Of the $6.4 million fine, Amazon was responsible for $5.3 million, and the logistics contractor was responsible for the remaining $1.1 million.

A breakdown of what Amazon owes workers includes:

$3.4 million in damages;

The penalty for failure to provide proper wage certification was assessed at $762,850;

$882,735 for shift, meal and rest period insurance premiums;

Minimum wage, overtime and contract wages are $281,195.

Amazon was fined for logistics and transportation. This news also caused some sellers to have some bad speculations - will logistics costs increase?

In forums and seller groups, I often see sellers asking questions, such as ↓

How to choose FBA first-leg transportation to reduce international logistics costs?

How to ensure a continuous supply of goods while saving as much logistics costs as possible?

How to optimize logistics costs on Amazon?

It can be seen that logistics costs are always a headache for many sellers. The fine imposed on Amazon this time is not good news for sellers, and some sellers’ speculations may come true.

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