NEW YORK (TodayNews) – The clock is ticking. As the deadline for a new contract approaches, a potential UPS strike seems closer than ever.
Negotiations broke down earlier this month, with unionized workers holding rallies and hands-on pickets across the country. Drivers, representing more than half of the company’s employees, will resume talks with UPS on Tuesday.
There is less than a week left to reach an agreement before the current contract expires at the end of the day on Monday, July 31st. The union sanctioned the strike, and Sean M. O’Brien, the fiery leader elected last year to lead the union, promised to do so if their demands were not met.
“We’re sending a message… all of our 340,000 members are united and ready to fight,” O’Brien told The Associated Press at a training picket Friday in Atlanta, where UPS is based.
UPS union members are still unhappy with the contract they believe was forced on them in 2018 and say the company delivers millions more packages every day than just five years ago. Drivers are calling for higher wages, especially for part-time workers, and better working conditions.
UPS says it already offers “the industry’s best wages and benefits,” but says it’s willing to increase that compensation. In an update Friday, the company said it is committed to “quickly close a fair deal that will provide confidence to our customers, our employees and businesses across the country.”
If negotiations fail, the supplies that Americans have come to rely on, especially since the start of the pandemic in 2020, could be severely disrupted. There hasn’t been such an impasse since 1997, long before delivery of everyday items from dog food to prescription drugs became the norm, when a strike by 185,000 workers crippled UPS. Here’s what you need to know.
Much of the union’s demands boil down to higher wages and better working conditions.
UPS’s annual profit over the past two years is nearly three times what it was before the pandemic. The company returned about $8.6 billion to shareholders in dividends and share repurchases in 2022 and forecasts another $8.4 billion for shareholders this year.
Drivers say UPS frontline workers deserve some of that windfall. The stumbling block in the talks was a wage increase for part-time workers, who earn a minimum of $16.20 an hour.
“People want to receive their parcels yesterday with the advent of e-commerce. So it’s a very responsible job,” O’Brien said, refuting salary statistics published by UPS. “Everyone doesn’t understand what it takes to deliver these packages to a truck. And many of our part-time workers… work for miserable wages.”
In addition to addressing the issue of part-time pay, the union wants to remove a contract clause that created two separate hierarchies of workers with different pay scales, hours and benefits. The safety of drivers, especially the lack of air conditioning in trucks, also plays an important role.
Before contract talks broke down on July 5 when both sides accused the other of not negotiating, tentative agreements were reached on several issues, including air conditioning for more trucks. UPS said it will add air conditioning to small U.S. delivery vehicles purchased after January 1, 2024. Existing vehicles will not receive this upgrade, but the union said they will have other additions such as fans and air vents.
The union also said it had reached tentative agreements to make Martin Luther King Day a full holiday for the first time, end unwanted overtime on drivers’ weekends, and get rid of the two-tier pay system for drivers who work weekends and make less money.
The strike can be avoided if UPS and Teamsters agree on a new contract by the July 31st deadline. State intervention is also possible.
On Sunday, O’Brien said he had repeatedly asked the White House not to intervene if the workers ended up going on strike. Last year, President Joe Biden intervened to prevent a railroad strike so as not to disrupt the national supply chain, and workers accepted an agreement that was not widely supported by union members.
The 24 million packages shipped per day on average by UPS, according to Pitney Bowes, an international shipping and logistics company, make up about a quarter of the total package volume in the United States. According to UPS, this is equivalent to about 6% of the country’s gross domestic product.
Higher prices and long waiting times are almost inevitable if there is a dead end. The strike also threatens to exacerbate lingering supply chain problems.
“Something has to give,” Thomas Goldsby, chairman of logistics in the University of Tennessee’s Department of Supply Chain Management, told The Associated Press. “A python can’t swallow an alligator, and we can all feel it.”
This month, UPS said it would temporarily begin training non-union employees in the US so they could intervene if they went on strike.
In addition to the implications for shipping and supply, a union victory at UPS could have implications for organized workers in all industries. The UPS contract negotiations are taking place against the backdrop of other well-known labor campaigns at Apple, Starbucks, Trader Joe’s and other companies, as well as the current writers’ and actors’ strikes seen in Hollywood.
If a strike does occur, experts say, shippers are likely to raise prices to keep up with rising demand. Businesses can pass on some of these costs to consumers who want goods delivered to their doors.
“The pain of e-commerce will be felt immediately,” said Medini Singh, senior lecturer at Columbia Business School, adding that customers who order online may face higher shipping fees and fewer free shipping offers from companies.
It’s also likely that carriers like FedEx will prioritize shipping higher-priced goods that make them more money, such as medical equipment and luxury goods, Singh said.
“Availability of all items doesn’t fluctuate equally, higher margin items can afford increased shipping costs,” he said.
Video journalist Sharon Johnson from Atlanta.