When news that UPS had agreed to equip their new delivery trucks with air conditioning units by 2024, there was some hope that maybe the rest of the contract negotiations would go smoothly. That was a gross miscalculation. The inflation crisis and the mixed bag on job creation have led to American families not giving the nod to Joe Biden’s economic agenda. They’re still feeling pinched, and to complicate matters—we have one of the largest labor strikes in years looming at the end of the month.
July 31 is the critical date. That’s when the contract between the International Brotherhood of Teamsters and UPS expires. Now, talks have collapsed, with both sides accusing the other of walking away. UPS employs over 530,000 workers, and 340,000 Teamsters go to work every day driving those ubiquitous trucks, delivering goods to our homes and businesses. The last time there was a worker strike at UPS was in 1997, and it wasn’t pleasant.
The Teamsters want increased pay, better protections against harassment from management, and better workplace conditions. There’s nothing unusual about these union demands. ABC News added that some progress was made in the new contract talks, specifically ending forced overtime for drivers who took off days. Teamsters President Sean O'Brien said both camps are close to a deal, but time is ticking. And O’Brien made no qualms about going on strike should things fall apart; the rank-and-file already approved a work stoppage.
The hold-up seems to be grounded with the part-time workers, who make $20/hour and are eligible for the same pension and health benefits as full-time drivers, who make $95,000 on average. The Teamsters want to see the part-timers get a bit more comfortable. Analysts warn that 20 percent of all e-commerce transactions are returned, and UPS is at the forefront of handling those logistics. The point is that a strike could gunk up the works for a lot of businesses quickly (via ABC News):
The UPS Teamsters contract covers more than 340,000 full- and part-time workers for the shipping giant and is set to expire on July 31, according to the union.
Following the latest round of negotiations on Wednesday, each side accused the other of walking away from the table
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The Teamsters have said they want an agreement that "guarantees better pay for all workers, eliminates a two-tier wage system, increases full-time jobs, resolves safety and health concerns, and provides stronger protections against managerial harassment."
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UPS is among the largest shipping companies in the U.S. According to Pitney Bowes, UPS shipped 5.2 billion U.S. parcels in 2022, representing nearly a quarter of all parcels shipped in the country.
Should the UPS Teamsters go on strike, there's "no doubt" the economy would be impacted, from businesses to individual households, Thomas Goldsby, a professor in logistics at the University of Tennessee-Knoxville's Haslam College of Business, told ABC News.
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The negotiations could also have implications in the labor industry, in particular the Teamsters' efforts to unionize Amazon drivers, according to Broughton Capital managing partner Donald Broughton.
"The bigger of a win [O'Brien] has against UPS, then the bigger his credibility is to go around to Amazon workers and say, 'Hey look, I could really help you guys out,'" Broughton said on CNBC's "Closing Bell Overtime" this week. "It's not just UPS management bargaining with the Teamsters; there's a lot more at play."
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UPS [last] Friday again called on the Teamsters to return to the table with three weeks to go until the contract expires.
"Refusing to negotiate, especially when the finish line is in sight, creates significant unease among employees and customers and threatens to disrupt the U.S. economy," UPS said in a statement.
There’s hope that UPS and the Teamsters agree on a new contract at the 11th hour. Until then, we all brace for the great disruption that could come at the end of the month.
