UPS, Teamsters reach agreement, averting strike

By Justine McDaniel and Shera Avi-Yonah
June 14, 2023 at 11:22 a.m. EDT

UPS and the union representing 340,000 delivery drivers reached a deal Tuesday, a crucial step in averting a nationwide strike that could have started on Aug. 1 and hobbled the U.S. economy.

The five-year tentative agreement with the Teamsters union includes $7.50 an hour pay increases for all UPS employees, including part-timers, as well as the elimination of a lower-paid class of worker and installation of air conditioning units in delivery vans.

“We demanded the best contract in the history of UPS, and we got it,” said Teamsters General President Sean M. O’Brien in a statement. “This contract sets a new standard in the labor movement and raises the bar for all workers.”

Carol Tomé, UPS chief executive officer, praised the deal in a statement calling it a “win-win-win.”

“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” Tomé said.

A strike at UPS was predicted to have far-reaching implications for the U.S. economy, as well as the country’s labor movement. When UPS went on strike in 1997, the company permanently lost a fair bit of its share of the market, and small and large businesses suffered.

Today, far more companies, as well as a bigger chunk of Americans’ spending, are reliant on delivery infrastructure to transport packages across the country within days of purchase, and the strike would be the largest for a single- employer in decades. UPS plays a sizable role in the booming delivery industry, handling roughly a quarter of some 59 million packages shipped nationwide daily, according to the Pitney Bowes Parcel Shipping Index.

Labor leaders say that the UPS contract deal is crucial to the union movement, which has shrunk by half over the past four decades and that a strong deal could influence future access to blue-collar jobs with middle-class pay and benefits.

UPS members will now have the opportunity to vote to ratify the deal, a process that takes about three weeks. If members vote down that deal, the union would still strike, labor leaders say.

At the heart of dispute was pay and benefits for the company’s more than 150,000 part-time workers today load and sort packages in warehouses. The starting wage for part-timers, is currently $16.20 an hour, which has not kept up with inflation, since their pay structure was separated from that of the more lucrative delivery driver role in the early 1980s.

UPS officials repeatedly rejected the union’s claims that part-timers are underpaid, noting that part-time employees at UPS make an average of $20 an hour after their first 30 days on the job. They also receive annual raises, the same health benefits as full-time employees, and pensions that are exceedingly rare for private-sector workers, UPS has said.

The consulting firm AEG estimated that a 10-day strike would have resulted in losses of more than $810 million for UPS.

https://www.washingtonpost.com...rike-deal-teamsters/


Looks like UPS shipping rates will be going up...WAY Up!

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Looks like UPS shipping rates will be going up...WAY Up!

May be time to buy heavy items cheap and stack them deep, if you know what I mean.

quote:

Looks like UPS shipping rates will be going up...WAY Up!

Yaaay

Good to hear... I'm sure Amazon smelled blood in the water and was ready to make moves to dent UPS as much as they could during a potential strike.

Just Months After "Massive Labor Deal," UPS Announces Massive Layoffs

https://www.zerohedge.com/mark...er-union-labor-costs



Five months after unionized UPS workers ratified a massive five-year labor deal that included massive pay bumps (read: here), the logistics company announced on Tuesday morning that 12,000 jobs, or about 14% of its 85,000 management jobs, would be cut.

Chief Executive Officer Carol Tomé was quoted on an earnings call by Bloomberg as saying job reductions were due to sliding package demand and soaring union labor costs. She said the layoffs would save the company about $1 billion this year.

"We are going to fit our organization to our strategy and align our resources against what's wildly important," Tomé said. She said that even after shipping volumes grow, those jobs will not come back, as "it's a change in the way we work." She also ordered workers to return to the office five days a week.

more at link

Thousands of UPS drivers are about to find out what the natural end result of unionized negotiated raises in a free market means for their employment. This is one development the Biden administration will ignore - and or be forced to deflect blame.

https://www.bloomberg.com/news...-in-five-days-a-week

UPS announced it would save more than $1 billion by cutting 12,000 of its 85,000 management jobs

The jobs cuts, likely the largest in UPS’s 116-year history, were made possible by new technologies including artificial intelligence, Tomé said. Citing one example, she said that machine learning allows salespeople to put together proposals without having to get pricing information from executives.

I have a bias against AI. I have been retired for ten years. But for many years before I retired there were constant AI proposals to automate and let us work better and cheaper. The real results seldom matched the hype. Maybe it is better now.

Not sure it’s going to have a direct impact on drivers as the reduction in force is coming from the management ranks

I see more Amazon trucks than UPS trucks.

Amazon surpassed both FedEx and UPS to become the largest shipper of packages.

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Originally posted by chellim1:
Amazon surpassed both FedEx and UPS to become the largest shipper of packages.

For years both FedEx and UPS competed hard for the Amazon contract. It got to the point where there was no money in it for either company but they would still continue to fight for the contract just to keep the volume of packages away from their competitor.
FedEx blinked and finally walked away from it and let UPS have it with no profit margin. That's when UPS started handing off many deliveries to the USPS. Also that's about when Amazon started their own trucking and delivery logistics.

FedEx couriers and drivers cannot be unionized because FedEx was founded as an airline and fell under the long established Railway Act which prevents them from forming a union with the ability to strike due to the disruption it would cause the economy. Because of this FedEx couriers make considerably less with fewer benefits for doing the exact same job as a UPS driver. It has been said that FedEX could eliminate all their domestic package delivery operations and still stay in the black due to the amount of international shipping they do where the profit margin is much higher. Also FedEx moves military equipment around the world during any conflict. They moved 30% of men and equipment during the first gulf war. The Pentagon has run war scenarios of how they would operate should the FedEx fleet become disabled.

Then along came FedEx Ground. Formerly known as RPS. It started out as independent drivers owning their own truck and route. The unions tried to unionize them and were nearly successful. Then FedEx changed the game. Instead of a driver owning one route and one truck you had to own no less than three routes with three trucks and you must form a LLC or S corp. Trying to unionize a bunch of small companies is almost impossible compared to unionizing a bunch of individuals. This turned out to be a great business model. Families and friends formed these small companies which turned out to be highly profitable. As a side note when DHL which is a German company tried to break into the U.S. domestic package delivery service UPS and FedEX became best friends to force them out. The DHL experiment didn't last long.