Unclear, arbitrary and burdensome proposal would disproportionately impact small businesses and make it more difficult to do business in Chicago
CHICAGO – A coalition of Chicago businesses including delivery and logistics companies, and small business owners, is urging City Council to reject the proposed Last-Mile Warehouse and E-Commerce Fulfillment Centers Ordinance, warning the proposal is unclear, arbitrary, and unduly burdensome, and will threaten locally owned businesses and the jobs they support. The ordinance as proposed also has the potential to increase congestion and make Chicago’s streets less safe, the coalition argues.
Chicago’s delivery network depends on businesses of all sizes, including small, locally owned delivery providers that employ drivers and serve communities throughout the city. The ordinance would impose a complicated new set of licensing, employment, contracting, technology and recordkeeping requirements on these businesses that would be difficult and costly to implement and comply with.
“This ordinance would fundamentally disrupt the delivery network Chicago businesses and residents rely on every day. It imposes costly, unclear, and unworkable mandates that will ultimately raise prices for Chicago families and lead to job losses,” said Jack Lavin, President and CEO of the Chicagoland Chamber of Commerce. “Consumers who rely upon this delivery network for groceries, medication, and other essentials can expect higher costs and less reliable service, and local small business owners may be forced to close their doors.”
While the business coalition supports reasonable policies that protect workers and improve safety on Chicago streets, regulations should be clear, workable, and directly connected to the problem they are intended to solve. Instead, the proposed ordinance creates arbitrary distinctions between businesses performing similar delivery activity, leaves important questions about compliance and enforcement unanswered, and imposes significant new requirements that go far beyond regulating unsafe activity.
The ordinance would establish a new regulatory system that:
• Creates unclear and difficult-to-implement requirements. Businesses would have to navigate new rules governing licensing, delivery contractors, worker training, employment decisions, technology and recordkeeping – rules that businesses were not consulted on and would be costly and burdensome to implement.
• Disproportionately impacts small businesses. The ordinance creates new requirements governing which companies can qualify as contract carriers and how businesses can work with them. Unlike large companies, small businesses often do not have the resources to restructure operations and build entirely new compliance systems. These needlessly arbitrary and burdensome requirements could force small, community-based delivery companies out of business and threaten the jobs they create.
• Would make our streets less safe. The ordinance is being justified around concerns about worker and street safety, but many of its requirements would actually make Chicago’s streets less safe. This legislation would prohibit the use of technology that tracks vehicle speeds and erratic driving. It would also make it harder for these companies to take dangerous drivers off the street.
• Creates arbitrary distinctions between businesses performing similar delivery activity. Facilities generally become regulated at 40,000 square feet, while smaller facilities can be grouped together and regulated based on separate thresholds. Safety regulations should be based on unsafe activity, not arbitrary distinctions between businesses and products.
The impact would be particularly significant for small delivery businesses that lack the resources of large corporations to absorb new costs and compliance obligations.
“Higher fuel prices are already pushing delivery costs up and this proposal—by increasing compliance, paperwork, and liability costs—will only drive costs higher,” said Noah Finley, Illinois State Director for the National Federation of Independent Business. “This could be devastating especially for smaller businesses that lack the financial, legal, and administrative resources to navigate a complex new regulatory scheme.”
“Chicago retailers depend on a reliable and efficient delivery network to serve their customers, and this ordinance would disrupt that network and make operations more complicated and costly,” said Rob Karr, president and CEO, Illinois Retail Merchants Association. “The burdensome new mandates would restrict the ability of consumers to conveniently obtain the goods they need when and how they want them. At a time when affordability remains a top concern for Chicago families and businesses, City Council should be focused on keeping costs down, not imposing new requirements that drive them higher or restrict convenient access.”
The ordinance also comes at a time when employers are already confronting the high cost and complexity of doing business in Chicago. Every new regulation, license requirement, and compliance mandate carries a cost, and those costs would be borne by these businesses at a time when the affordability crisis is already squeezing working people. Unclear and unpredictable regulations also make it more difficult for businesses to make long-term decisions about where to locate, invest and grow.
“Manufacturers throughout Chicago are already struggling under the weight of costly and complex employment, workplace-safety, privacy, wage-and-hour, and labor laws. Adding yet another regulatory layer for last-mile delivery networks would impose significant new costs and operational restrictions, with much of the burden falling on small businesses,” said Patrick Schweska, General Counsel for the Illinois Manufacturers’ Association. “We urge council members to reject this proposal and embrace policies that support economic investment and job creation.”
The coalition is calling on City Council to instead work with employers, small businesses, workers, and other stakeholders on a balanced approach that protects workers and improves safety without putting jobs and local businesses at risk or undermining Chicago’s competitiveness.
Members of the Chicago Delivers coalition include the Chicagoland Association of Shopping Center Owners, Chicagoland Chamber of Commerce, Commercial Real Estate Development Association, Illinois Hispanic Chamber of Commerce, Illinois Manufacturers’ Association, Illinois Railroad Association, Illinois Retail Merchants Association, Illinois Trucking Association, Midwest Truckers Association, National Federation of Independent Business, Supply Chain Federation, and small businesses including Timestamp Logistics LLC, Bruiser Trucking LLC, LOGIXSTERXZ LLC, Clear Logistics LLC, Port Parma Logistics LLC, Melrose Park Logistics LLC, Starfleet Logistics LLC, Carnocycle Logistics, Veteran’s Logistics, Accuswift Logistics, LLC, NJD Delivery Services, FAE Distributors Inc., Elite Xpress LLC, Shaya Logistics, Kru’s Delivery Service, and LOMA.