UPS workers authorize Teamsters Union to call strike
United Parcel Service workers have authorized their union, the International Brotherhood of Teamsters, to call a strike as soon as Aug. 1, after the current contract expires, the Teamsters announced Friday.
The Teamsters represent more than 325,000 UPS employees in the United States, where the company has nearly 450,000 total employees. The union said 97 percent had voted in favor of strike authorization.
Many unions hold such votes to create leverage at the bargaining table, but a much smaller percentage end up following through. “The results do not mean that a strike is imminent and do not affect our current business operations in any way,”[ads1]; UPS said in a statement, adding that it was “confident that we will reach an agreement.”
A UPS strike can have significant economic consequences. The company handles about a quarter of the tens of millions of packages shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index. And while competition for UPS has grown in recent years, rivals would be hard-pressed to replace the lost capacity quickly, leaving some customers stranded and others facing higher costs.
“What happens when you try to cram 25 percent more food into a stomach that’s 90 percent full?” said Alan Amling, a fellow at the University of Tennessee’s Global Supply Chain Institute and former UPS executive.
The two sides have reached tentative agreements on a number of issues since they began negotiating a national contract in April, most recently on heat safety, including a requirement for air conditioning in new trucks starting in January and extra fans and ventilation for existing trucks.
But the negotiators have yet to deal with wage increases, which the Teamsters say are overdue amid the company’s strong performance during the pandemic. The company’s adjusted net income increased by over 70 percent from 2019 to last year.
The union has also focused on looking at pay differences for a category of drivers who usually work at weekends.
UPS CEO Carol Tomé, who began that position in 2020, said on a recent earnings call that UPS was aligned with the union on “several key issues.” She added that outsiders should not place too much importance on the “lots of noise” likely to occur during the negotiations.
At stake over the negotiations is the political standing of Teamsters leader Sean O’Brien, who during his campaign for the union presidency in 2021 repeatedly accused his predecessor, James P. Hoffa, of being too conciliatory toward employers.
Mr. O’Brien complained that Mr. Hoffa had essentially forced a concession contract on UPS workers in 2018 after union members voted down the deal. He criticized his opponent for the presidency, a Hoffa-aligned candidate, as being unlikely to strike.
“You’ve already admitted that in your 25-year career you only struck out six times, so UPS knows you’re not going to go on strike,” O’Brien said during a candidate debate.
Mr. O’Brien has largely maintained his aggressive stance on UPS since he took over as president last year. Speaking in October to activists with the Teamsters for a Democratic Union, a reformist group that backed his candidacy, O’Brien promised that “this UPS deal is going to be the defining moment in organized labor.”
Compensation for UPS drivers is generally higher than that of the company’s competitors. UPS said the average full-time delivery driver with four years of experience earns $42 an hour, and part-time package-sorters earn $20 an hour on average after 30 days.
The groups receive the same benefits package, which includes health care and retirement benefits and is worth about $50,000 a year for full-time drivers, the company says.
Beyond the general wage level, the union has said it wants to eliminate a driver category created under the 2018 contract.
The company said the category was intended for hybrid workers who performed jobs such as sorting parcels on some days while driving on other days, particularly Saturdays, to meet the growing demand for weekend delivery.
But the Teamsters said those workers never followed the hybrid arrangement and simply drove full-time from Tuesday to Saturday, for less pay than other full-time drivers. The company says that the weekend drivers make up around 87 percent of the basic salary of regular full-time drivers, and that some employees have worked under a hybrid scheme.
In the event of a strike, deliveries to consumers, such as e-commerce orders, will probably be among the first to be disrupted. But experts said the supply chain could also suffer. Some suppliers will struggle to quickly ship items such as auto parts to manufacturers, potentially leading to a slowdown in production.
Even a brief strike can take a toll on UPS. Many customers long relied solely on the company, but that began to change after the Teamsters last went on strike in 1997, Amling said. After the strike, which lasted over two weeks, more customers started working with more carriers. The consequences were masked by gains from the rise of e-commerce and fewer competitors to choose from, but the company may not be so lucky today.
Niraj Chokshi contributed reporting.
