Michael Wright
Executive Director
Customized Logistics and Delivery Association
The debate over delivery regulation in New York and Chicago is often framed around Amazon. For CLDA members, however, the bigger issue is much more fundamental: whether businesses should still be allowed to hire professional third-party companies to perform their deliveries.
That distinction is at the center of CLDA’s concerns with New York City’s Intro 0518-2026 and the Chicago Delivery Protection Act, Ordinance O2025-0018778.
Both proposals have been promoted largely as efforts to address the Amazon delivery model. But during CLDA’s September Government Affairs Committee meeting, members emphasized that the potential impact reaches well beyond Amazon or its Delivery Service Partners.
The concern is the concept of a direct-hire mandate.
How outsourced delivery works today
For many businesses, delivery is an important part of their operation, but it is not their core business.
A retailer sells products. A healthcare organization provides patient care. A manufacturer produces goods. A distributor manages inventory.
Instead of building an internal delivery department, those companies contract with professional courier and final-mile providers that already have the people, technology, vehicles, compliance systems and operational expertise necessary to perform the work.
In its simplest form:
Shipper / Customer
↓
Professional Courier or Final-Mile Provider
↓
Drivers and Delivery Personnel
That structure is fundamental to the customized logistics and delivery industry.
The courier company is not simply supplying labor. It may be managing routing, dispatch, customer service, technology, insurance, driver qualification, chain of custody, compliance, proof of delivery and the many other operational responsibilities that come with moving goods from one location to another.
What changes under a direct-hire model?
The proposals being discussed in New York and Chicago raise concerns because certain delivery workers could instead be required to work directly for the warehouse owner or operator.
The model begins to look more like this:
Warehouse / Retailer / Shipper
↓
Direct Employees Performing Delivery
The independent delivery company can effectively disappear from the relationship.
During a recent CLDA Government Affairs Committee discussion, the issue was described as substantially broader than worker classification alone. Members emphasized that a requirement tying the delivery worker directly to the warehouse or customer could affect established third-party logistics companies regardless of how those companies classify their own workforce.
That is an important point.
A courier company could employ its drivers as W-2 employees and still be affected if the law requires those workers to instead become employees of the courier company’s customer.
This isn’t simply an employee vs. independent-contractor debate
Worker classification remains one of the most important issues facing the final-mile industry.
But a direct-hire mandate creates a different question:
Who is legally permitted to provide the delivery service?
Consider a retailer that contracts with a CLDA member to make same-day deliveries.
Today, the retailer can choose a professional delivery partner based on service, expertise, technology, geographic coverage, safety, price and performance.
Under a strict direct-hire mandate, the retailer could potentially be required to create its own delivery workforce instead.
That could mean:
- Recruiting and hiring drivers.
- Purchasing or leasing vehicles.
- Building dispatch and routing operations.
- Implementing delivery technology.
- Managing driver training and compliance.
- Obtaining appropriate insurance.
- Handling claims and customer-service issues.
- Managing seasonal volume fluctuations.
- Maintaining a delivery operation that may have little to do with the company’s primary business.
For some very large companies, building that infrastructure may be possible.
For many other businesses, it may not be practical at all.
What happens to specialized delivery providers?
The final-mile industry exists precisely because delivery is often specialized.
A healthcare courier may understand specimen handling, chain of custody and time-critical transportation.
