HALELUYA HADERO (AP business writers)
NEW YORK (TodayNews) — UPS has reached a tentative contract agreement with its strong 340,000-strong union, potentially averting a strike that threatened to disrupt logistics across the country for businesses and households alike.
The agreement was announced after UPS and the drivers returned to the negotiating table on Tuesday to discuss the remaining stumbling blocks in the largest private sector contract in North America. The two sides have already reached tentative agreement on a range of issues, but disagreements remain on issues such as pay for part-time workers, who make up more than half of the union’s UPS employees.
The drivers called the preliminary agreement “historic” and “extremely lucrative” in a prepared statement. It includes, among other things, higher wages and air conditioning in delivery trucks.
“Together, we have reached a mutually beneficial agreement on issues that matter to Teamsters management, our employees, and UPS and our customers,” UPS Chief Executive Officer Carol Thome said in a written statement. “This agreement continues to reward UPS full-time and part-time employees with industry-leading pay and benefits while maintaining the flexibility we need to stay competitive, serve our customers, and sustain our business.”
The company said the five-year agreement covers US Teamsters-represented employees in small positions and is subject to vote and ratification by union members.
The union, which has long threatened to strike, boasted of a “historic pay increase” for its members, saying that existing full-time and part-time UPS drivers will receive $2.75 an hour more in 2023 and $7.50 an hour more over the life of the contract.
It says the agreement includes a provision to increase starting wages for part-time workers to $21 an hour, up from $16.20 today. He also repeated previous concessions he had received from the company, such as making Martin Luther King Day a full-fledged holiday for the first time and abolishing forced overtime on drivers’ weekends.
Teamsters members, angered by a contract they say was forced on them five years ago by union leadership, have clashed with UPS over wages as the delivery company’s profits have skyrocketed in recent years. Last year, union leadership was turned upside down with the election of Sean O’Brien, a vocal critic of the union president who signed the contract, and James Hoff, the son of a prominent Teamster breeder.
The two sides reached a preliminary agreement in advance on safety issues, including equipping more trucks with air-conditioning equipment. Under the agreement, UPS said it will add air conditioning to small U.S. delivery vehicles purchased after January 1, 2024.
UPS profits are up more than 140% since the last contract was signed as the onset of a deadly pandemic has dramatically changed the way households get what they need.
The unionized workers claimed they were the ones who took over the growth at the Atlanta company and seemed determined to fix what they saw as a bad contract.
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.
Voting of participants begins on August 3 and ends on August 22.
UPS has the largest contract with private sector workers in North America, and the last breakdown in labor negotiations a quarter of a century ago led to a 15-day strike by 185,000 workers, hurting the company.
Logistics experts have warned that in the event of a strike, other transport companies will not be able to handle all the packages that will reach them. Customers who shop online may experience higher shipping costs and longer waiting times.
The deal averts a major crisis in shipping, as merchants experienced school shopping season, the second-largest selling period after winter break.
The Retail Leaders Association, a national retail group whose members include retailers such as Best Buy, CVS Health and Kohl’s, called the preliminary agreement “a huge relief for retailers who have been considering a strike and the associated uncertainty for weeks.”
“Over the past few years, we have learned all too well what the consequences of disruptions in the supply chain can be,” the group said in a statement. “We are grateful that this problem, which would have cost billions of dollars and would have taken a long time to recover, was avoided.”
Matt Ott contributed to this report from Washington DC and Ann D’Innocenzio from New York.