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UPS, union agree to resume contract talks

July 20, 2023
With the possibility that a work stoppage in August would be the largest in U.S. history, UPS and the International Brotherhood of Teamsters announce they will resume talks next week over a new deal that broke down after the July 4 holiday.

Representatives for UPS Inc. and the union that represents about 340,000 of its delivery and warehouse workers announced on July 19 that they intend to return to the bargaining table next week in a bid to avoid a work stoppage that could shake the economy and be recorded as the largest in U.S. history.

And UPS said the company is sweetening its offer to the union in the run-up to resumed negotiations.

“We are prepared to increase our industry-leading pay and benefits, but need to work quickly to finalize a fair deal that provides certainty for our customers, our employees, and businesses across the country,” according to the July 19 company statement.

See also: Predictions of supply chain shock from UPS strike multiply

In other supporting talking points, UPS, which is No. 2 on the FleetOwner 500: Top For-Hire Fleets of 2023, states that its delivery drivers make $95,000 a year on average, that its part-time employees average $20 per hour after 30 days of employment, and that the company has added 120,000 Teamsters jobs in the last 10 years “even as private-sector union membership declined across the country.”

In its own statement, the union said UPS had bowed to Teamsters pressure in agreeing to resume negotiations over a new five-year deal. The current one expires July 31.

“As thousands of UPS Teamsters practice picket, rally, and mobilize around the country, UPS bowed today to the overwhelming show of Teamster unity and reached out to the union to resume negotiations. The Teamsters National Negotiating Committee and the company will set dates soon to resume negotiations next week,” according to the July 19 union release.

“The Teamsters agreement with UPS is the largest private-sector union contract in North America. UPS Teamsters are demanding the strongest possible contract or are prepared to strike—with rank-and-file members authorizing a strike by 97%.”

See also: More bad blood between Yellow and its union as Teamsters vow to strike

The Teamsters statement also goes on to state the union wants a new five-year agreement that “guarantees better pay for all workers, eliminates the two-tier wage 22.4 job classification, increases the number of full-time jobs, addresses safety and health concerns around heat illness, and provides stronger protections against managerial harassment.” A major sticking point in the negotiations has been entry-level pay for part-time workers, which the union wants set above $20 an hour, and in-cab working conditions for its drivers in their distinctive brown delivery vans in scorching summer temperatures.

A schedule for the resumed negotiations next week has yet to be set. Analysts have said the chance of a walkout is low and the possibility of a deal before July 31 high, partly because of pressure from the looming threat of damage to the company and the economy from even a short work stoppage. UPS lost $850 million during its last 15-day strike in 1997, but analysts warn the cost of a stoppage in 2023 could be in the billions of dollars.

A former UPS executive had a dire prediction for The Washington Post on July 21. “I think it’s likely a work stoppage will occur and the key question at this point is how long it will last,” said Alan Amling, also a fellow at the University of Tennessee’s Global Supply Chain Institute.

Meanwhile, Barron’s noted on July 20 that stock at FedEx, the No. 1 company on the for-hire FleetOwner 500 and chief rival of UPS, is rising in value, in part on the prospect of increased parcel-delivery business if a strike at UPS does take place. FedEx (FDX) shares were up the morning of July 20 about 3.5%. Stock prices at UPS also were higher as news spread that negotiations between the parcel-delivery giant and its union would resume at some point next week.

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