UPS seems to have averted a strike that would have seen hundreds of thousands of workers walk off the job next week.
America’s biggest package carrier reached a tentative labor deal with International Brotherhood of Teamsters, the pair announced Tuesday. They came to terms on collective bargaining agreement ahead of July 31, the date when the contract covering the 340,000 unionized employees at UPS expires.
The five-year agreement covers U.S. Teamsters-represented employees in small-package roles. Union members still have to vote on and ratify the deal.
“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” said Carol Tomé, CEO at UPS, in a statement. “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.”
Watch on FN
A deal was struck just one day after UPS resumed the lengthy Teamsters talks. They had walked away from the table on July 5 after the Teamsters rejected the shipping giant’s latest proposal.
As part of the tentative master agreement, existing full- and part-time UPS Teamsters will see hourly wages increase $2.75 in 2023, and $7.50 over the length of the contract.
Full-time wages now average $49 per hour for top earners.
Existing part-time wages will immediately rise to no less than $21 per hour from a current minimum of $16.20, and part-time seniority workers earning more under a market rate adjustment will receive all new general wage increases.
These existing part-time workers will receive a 48 percent average total wage increase over the next five years, the Teamsters said in a statement.
New part-time hires at UPS would start at $21 per hour and advance to $23 per hour.
Teamster-represented part-time workers will have priority to perform all seasonal support work using their own vehicles with a locked-in eight-hour guarantee. For the first time, seasonal work will be contained to five weeks only from November-December.
As many as 30,000 new jobs will be created under the new contract, with 7,500 full-time Teamster jobs.
Competing logistics players that anticipated a significant surge in package volume to pick up the slack from a UPS strike might now miss out, but many across the landscape welcome the news of a new deal.
“News of a tentative UPS-Teamsters contract agreement is an enormous relief to retailers, who have been navigating the possibility of a strike and the associated uncertainty for weeks. With a work stoppage now taken out of the equation, retail supply chains can continue firing on all cylinders to deliver for consumers across the country,” the Retail Industry Leaders Association (RILA) said in a statement. “We’ve learned all too well over the last several years the impact supply chain disruptions can have. We’re grateful that this challenge, which would have had a price tag in the billions of dollars and a long runway for recovery, was avoided.”
National Retail Federation (NRF) president and CEO Matthew Shay also shared praise for the agreement.
“UPS is a major partner of the retail industry, and we are grateful it came to an agreement with the Teamsters without disruption to the marketplace,” Shay said. “The timing of this agreement is critical for consumers and families during the peak back-to-school shopping season. Retailers rely on stability within their supply chains, and this agreement will bring long-term stability, as well as assurance to the millions of businesses and employees who rely on smooth and efficient last-mile delivery.”
Andy Polk, senior vice president of the Footwear Distributors and Retailers of America (FDRA), called the deal “a major relief for the shoe industry,” particularly in preventing disruptions it would have brought to shoe company operations and sales.
“Imagine samples not being delivered to showrooms for FFANY Market Week, or being unable to deliver shoes to consumers’ homes or restock retail stores. More than that, this makes sure our economy stays afloat. Consumer sentiment would have plummeted if a strike had occurred and may have even lead to a spending pull back,” Polk said. “One thing we will need to look at is how the new pay terms may raise shipping costs for shoe companies. Margins for shoe companies are extremely tight and this may cause more pressure.”
Analysis suggests a 10-day strike would have fueled $7 billion in economic losses and millions of package delays. Everstream Analytics said a strike would disrupt nearly 40 percent of U.S. courier operations.
“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits. Teamster labor moves America. The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it,” said Teamsters general president Sean O’Brien, in a statement. “UPS has put $30 billion in new money on the table as a direct result of these negotiations. We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers.”
The union had already gotten key victories throughout the negotiations, such as dissolving the “22.4” two-tier wage classification for hybrid workers, ending forced overtime on drivers’ days off and installing air conditioning in the package carrier’s iconic brown delivery vehicles. Employees also received Martin Luther King Day as a full holiday for the first time.
On July 31, representatives of the 176 UPS Teamster locals in the U.S. and Puerto Rico will meet to review and recommend the tentative agreement. Locals will conduct member meetings and Teamsters will have several weeks to vote on the offer electronically.
Member voting runs Aug. 3-22.
This story was reported by Sourcing Journal and originally appeared on SourcingJournal.com.
