Pressure is mounting for some kids’ shoe brands prepping for back-to-school as the threat of a possible UPS strike looms next month.
For months, the shipping and logistics company and the International Brotherhood of Teamsters have been negotiating a new national master agreement for about 330,000 UPS employees in the U.S., as well as supplemental agreements that cover specific local areas of the country.
With the Aug. 1 deadline to reach a deal fast approaching, concerns are growing over how this potential strike could affect retail and the all-important back-to-school shopping season.
And there is a lot at stake: According to the National Retail Federation (NRF), back-to-school spending is expected to reach $41.5 billion, up from $36.9 billion last year and the previous high of $37.1 billion in 2021. Similarly, back-to-college spending is expected to hit $94 billion, about $20 billion more than last year’s record, the NRF said.
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Flare lights went up earlier this week when the Retail Industry Leaders Association (RILA) urged quick resolution to avoid the strike, calling the uncertainty of a possible strike “kryptonite” for supply chains.
“While retailers maintain flexible and resilient supply chains, [and are] adept at navigating challenges to deliver for consumers, the impact of a UPS worker strike would undoubtedly be felt throughout the economy, to the tune of billions of dollars,” the RILA stated. “We remain optimistic that, with the nationwide implications in mind, a resolution can be reached soon.”
UPS itself also seems to be optimistic that a deal will be reached. In an update on negotiations issued on Friday, the courier stated in part that it “looks forward” to meeting the Teamsters at the negotiating table next week to resolve the few remaining open issues.
“With the contract expiration less than two weeks away, we need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country,” UPS said on Friday. “We started these negotiations prepared to increase the already industry-leading pay and benefits we provide our full and part-time union employees and are committed to reaching an agreement that will do just that.”
Even still, some retailers and footwear companies have issued warnings to their customers ahead of the possible strike. Direct-to-consumer shoe brand Plae sent an email to customers this week assuring them that the company is “on top of things” and are “actively exploring” alternative shipping options to minimize the impact of the strike.
Plae founder and CEO Ryan Ringholz told FN, “We’re looking into every possible option, from DoorDash to Postmates, to ensure we get orders to customers on time. And of course, we have relationships with FedEx and the [U.S. Postal Service].”
Over at Badorf Shoe Company, sales director Brandon Gingerich told FN it is doing much of the same – proactively communicating with customers ahead of the deadline. Gingerich said that his company has already moved select volume retailers over to FedEx as well as opened up pre-book order release windows for wider range of ship dates. “We’ll also be moving all in-house customer orders that typically utilize our in-house UPS account as we get closer to the Aug. 1 deadline,” Gingerich said.
At Esquire Brands, president Peter Roccamo said he isn’t concerned for his wholesale business, but the strike could be highly detrimental for the consumer market. “I don’t anticipate a huge problem [in wholesale] as we don’t use UPS to ship to our customers,” Roccamo said. “But with that said, I think it could a potential disaster for the consumer market. Drop ships will certainly be affected and I am sure anyone using UPS currently is scurrying to find other carries to move their orders.”
Logistics companies are working behind the scenes to facilitate such moves.
George Wojciechowski, co-founder and CEO of sustainable e-commerce fulfillment company Manifest told FN that he is “closely watching and preparing” for a potential strike, as any disruptions could cause delays and uncertainty for retailers and their customers.
“We’ve already notified our merchant customers about the situation and assured them that service will continue seamlessly by switching carrier designations to reliable alternatives,” Wojciechowski said. “Of course, this might mean that there could be some variations in rates compared to UPS, but we’re committed to providing the best value and service possible.”
Wojciechowski added that a potential UPS strike poses no risk to its fulfillment or timely shipping capabilities, though. “We’ll automatically re-route orders that would have shipped via UPS to another carrier until the situation with UPS is resolved,” he noted.
This isn’t the first time the U.S. retail industry has faced this situation. According to Josmo Shoes president Sammy Esquenazi, when UPS went on strike in 1997, it had a “crippling” effect on the industry. “I remember back then, everyone was scrambling to give their stuff to other carriers and the carriers wouldn’t take new accounts or wouldn’t take more than your normal volume,” Esquenazi recalled. “It’s a little worrisome.”
But ultimately, footwear executives unanimously expressed their hope that the two parties could come to a resolution soon. “Or at least delay it until after back-to-school, to a time that is less critical to the retail business,” said Ringholz.
