Roughly 340,000 of UPS’s 443,000 workforce is a part of the labor union known as International Brotherhood of Teamsters. With UPS recording several years of record profits, including $14 million in 2022 alone, Teamsters has begun to argue their current contract, placed in 2018, is in need of renegotiation.
What is being negotiated in the new contract:
- Higher wages
- Equal pay for part-time and full-time employees
- More job opportunities
- Air conditioning in all new vehicles
- The recognition of Martin Luther King Jr. Day being a holiday
- Hybrid work – sorting in a warehouse some days and driving/delivering others
- And more…
The current tentative deal…
The current deal on the table has luckily put the potential talk of a UPS strike on hold. The suggested deal would reward both full and part-time employees with better pay and benefits. Teamsters noted that the deal on the table was in attempts to make it a win-win for everyone involved: employees get the compensation they deserve while UPS will still have what they need to keep their business strong and competitive.
What is needed for the new deal to go through:
- UPS employees (represented by the union) will vote on the new contract (ending August 22nd)
- The vote must have a majority of “yes” votes
The UPS strike in 1997…
The last strike UPS took part in happened in 1997 where high-stakes contract negotiations were made. The main topic of negotiations included pensions, subcontracting and more full-time job opportunities as UPS was trending towards more part-time employment at a lower wage during that time. The strike lasted 15 days before contract negotiations were concluded with UPS having lost roughly $600 million during that time.
What was included in the final contract:
- 10,000 new full-time jobs by combining roughly 20,000 part-time jobs
- Pensions raised as much as 50%
- New restrictions on subcontracting feeder work
- Wage increases – which was the largest increase UPS ever had (at that time)
How would a strike affect you…
Although there is a tentative deal on the table, the ratification process could take roughly three weeks and any “no” votes could still trigger a strike, which would take place in late August.
What would happen if a strike were to happen? In theory the strike may not even happen with the tentative deal, however your packages shipped out roughly five days prior to the strike could have affected transit times, if the strike were to occur.
If the strike occurs, it is likely that most shippers will switch to other carriers such as FedEx. However, FedEx who only carried 19% of parcels in 2022 most likely would not be capable of handling the increased demand and parcel volume, if the strike were to occur.
Although FedEx and other shippers such as USPS will do their best to manage the increases, they will most likely experience some delays and have an increased package loss rate due to the sheer volume. As we saw during the pandemic and typically see during the holiday season with increased parcel volumes and overall shipping demand, it is important to plan and order ahead of time when able to accommodate these potential shipping issues.
Bore Tide One Source combating your shipping needs…
At Bore Tide One Source, your needs are our concern. We understand the importance of maintaining project-specific deadlines, and are aware of the impact poor shipping speeds may leave on your business. Rest assured, we have several plans in mind if the strike were to occur to ensure your promotional merchandise is received in a timely manner.
We are monitoring the situation and will be keeping track of any new details that arise as the ratification process proceeds. Our number one goal is to give you peace of mind, allowing you to continue to reach your brand goals at the pace you choose.
SOURCES INCLUDE
- https://media.ppai.org/ppai-newslink/ups-teamsters-reach-tentative-agreement/
- https://money.com/ups-worker-strike/
- https://www.forbes.com/sites/brianbushard/2023/07/25/ups-and-teamsters-avert-strike-with-new-contract-agreement/?sh=58f225aa1e9e
- https://www.tdu.org/how_the_1997_ups_strike_was_won
- https://www.cnn.com/2023/07/25/business/ups-teamsters-deal-strike/index.html
- https://www.nbcnews.com/business/business-news/ups-workers-reach-tentative-contract-deal-management-days-ahead-strike-rcna90471
- https://www.nytimes.com/2023/07/25/business/economy/ups-teamsters-contract-strike.html#:~:text=In%201997%2C%20about%20185%2C000%20UPS,commerce%20was%20in%20its%20infancy.