NEW YORK (AP) — Time is ticking. As the deadline for a new contract approaches, a potential UPS strike feels closer than ever.
Negotiations broke down earlier this month and union workers have been holding rallies and picketing across the country. The Teamsters, who make up more than half of the company’s workforce, will resume talks with UPS on Tuesday.
That leaves less than a week to reach an agreement before the current contract expires at the end of the day on Monday, July 31. The union has authorized a strike, and Sean M. O’Brien, a fierce leader elected last year to lead the union, has vowed to do so if his demands are 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 practice picket Friday in Atlanta, where UPS is headquartered.
Unionized UPS workers are still furious over a contract they feel was forced on them in 2018, saying the company delivers millions more packages every day than it did just five years ago. The Teamsters are calling for better wages, particularly for part-time employees, and better working conditions.
UPS has maintained that it already offers “industry-leading pay and benefits,” but says it is prepared to increase that compensation. In an update on Friday, the company said it aimed to “quickly finalize a fair deal that provides certainty for our customers, employees and businesses across the country.”
If the negotiations are unsuccessful, the deliveries Americans have come to depend on, particularly since the pandemic began in 2020, could be hit hard. Such a dead end had not been seen since 1997, long before delivery of everyday items from dog food to prescription drugs became the norm, when a strike by 185,000 workers paralyzed UPS. This is what you need to know.
Much of the union’s demands boil down to better wages and better working conditions.
UPS’s annual profits in the past two years are nearly triple what they were before the pandemic. The company returned about $8.6 billion to shareholders in the form of dividends and share buybacks in 2022, and forecast another $8.4 billion to shareholders this year.
The Teamsters say UPS frontline workers deserve some of that windfall. A sticking point in the negotiations has been wage increases for part-time workers, who earn a minimum of $16.20 an hour.
“People want their packages yesterday with the rise of e-commerce. So it’s a very demanding job,” O’Brien said, rejecting the salary statistics shared by UPS. “Everyone doesn’t realize what it takes to get these packages on the truck. And many of our part-time workers… work for poverty wages.”
In addition to addressing part-time pay, the union wants to remove a contract provision that created two separate hierarchies of workers with different pay scales, hours and benefits. Driver safety, particularly the lack of air conditioning in delivery trucks, is also in the mix.
Before contract negotiations broke down on July 5, when both sides blamed each other for walking away from the negotiating table, tentative agreements were reached on various issues, including installing air conditioning on more trucks. UPS said it would add air conditioning to US small delivery vehicles purchased after January 1, 2024. Existing vehicles would not get that upgrade, but the union said they will get other additions like fans and air vents.
The union also said it reached tentative agreements to make Martin Luther King Jr. Day a full holiday for the first time, end unwanted overtime on drivers’ days off and get rid of the two-tier wage system for drivers who work weekends and earn less money.
The strike can be avoided if UPS and the Teamsters agree to a new contract before the July 31 deadline. There is also the possibility of government intervention.
O’Brien said Sunday that he has asked the White House numerous times not to intervene if workers end up on strike. Last year, President Joe Biden stepped in to prevent a rail strike to prevent disruption to the nation’s supply chain, and workers agreed to a deal that did not have the general support of union members.
The 24 million packages UPS ships on an average day account for about a quarter of all US package volume, according to global shipping and logistics firm Pitney Bowes. As UPS says, that’s the equivalent of about 6% of the nation’s gross domestic product.
Higher prices and long wait times are almost certain if there is a dead end. A strike also threatens to spread lingering supply chain problems.
“Something has to give,” Thomas Goldsby, chair of logistics at the University of Tennessee Department of Supply Chain Management, told The Associated Press. “The python cannot swallow the alligator, and we are all going to feel that.”
UPS said this month that it will begin temporarily training non-union employees in the US to intervene in the event of a strike.
Beyond the shipping and supply implications, a union victory at UPS could matter to organized workers in all industries. The UPS contract negotiations come amid other high-profile labor campaigns at Apple, Starbucks, Trader Joe’s and other companies, as well as the ongoing writer and actor walkouts seen in Hollywood.
If a strike occurs, experts say carriers are likely to raise prices to keep up with the influx of demand that will come their way. Businesses can pass some of those costs on to consumers who want items delivered to their doors.
“The pain part of e-commerce will be felt immediately,” said Medini Singh, a senior professor at Columbia Business School, adding that customers who order online could face more shipping fees and receive fewer free shipping offers from companies.
Shippers like FedEx are also likely to prioritize shipping higher-value items that make them more money, such as healthcare equipment and luxury goods, Singh said.
“The availability of all items is not affected in the same way, things with higher margins can afford increased shipping costs,” he said.
Video journalist Sharon Johnson contributed from Atlanta