UPS Is Preparing For One Of The Biggest Strikes In American History

Karen Millions

5 months ago

The fledgling labor movements at large firms like Starbucks and Amazon have attracted national attention over the past year. But a high-stakes conflict between one of America’s oldest unions and the most extensive package courier in the world is less well known. Before their contract expires at the end of July 2023, contract negotiations between UPS and the Teamsters Union are scheduled to start in the spring. Labor analysts foresee that the drivers and package handlers will strike before the discussions begin.

“The question is how long it will be,” said Todd Vachon, professor of Labor Relations at Rutgers. “The union’s president ran and won on taking a more militant approach. Even if they’re very close [to a deal], the rank and file will be hungry to take on the company.”

If that occurs, a UPS strike will touch almost every home in the nation. According to estimates, UPS trucks transport 6% of the country’s annual gross domestic product. Due to the exponential expansion of internet retail, the corporation and its drivers are now more essential than ever to the nation’s troubled supply chain. The Business also delivers many items found in shops, factories, and offices in addition to home delivery.

Out of the 534,000 permanent workers worldwide, about 350,000 Teamsters work as drivers and package sorters for UPS. And that’s expanding quickly; the Business has added nearly 72,000 Teamster-represented positions since the outbreak began.
Although FedEx (FDX), the US Postal Service, and Amazon’s delivery service provide competitive benefits, none can handle more than a small portion of the 21.5 million US items that UPS transports daily.

“We want a contract that provides wins for our employees, and that provides UPS the flexibility to stay competitive in a rapidly changing industry,” the company said this month. “UPS and the Teamsters have worked cooperatively for almost 100 years to meet the needs of UPS employees, customers, and the communities where we live and work. We believe we’ll continue to find common ground with the Teamsters and reach an agreement that’s good for everyone involved.”

Since a nearly two-week-long demonstration against UPS in 1997, the union has not engaged in strike action. If the league goes on strike, it will be the biggest business-specific strike in American history.

Anger over the current contract

There are undoubtedly indications of tension in the relationship between the union’s leadership, rank-and-file members, and the firm. The current contract was rejected by most members in 2018. However, the former Teamster leadership, led by then-President James Hoffa, still implemented it because not enough members participated in the ratification ballot to spark a walkout.
Sean O’Brien, the new union president, gained the position earlier this year by making the UPS contract the centerpiece of his campaign. He frequently mentions the $300 million strike fund the union has accumulated to pay members in case they go on strike, and he has vowed to demand UPS pay Teamster members far more this time.

“Do our members wake up every day wanting a strike? I’d say no. But are they fed up? They’re fed up,” O’Brien told CNN Business last week. “Whether or not there is a strike, that’s totally up to the company. We will leverage as much as possible to get our members the contract they deserve.”

According to UPS, the average yearly salary for delivery drivers is $95,000, with additional perks, including a traditional pension plan worth an additional $50,000. Semi-tractor drivers for UPS are compensated even more. That is far more than the average pay at FedEx and Amazon, where many drivers are employed as independent small business owners.
The present agreement ends on August 1st at 1:00 am. The union, according to O’Brien, will not extend any contracts past that point.

In addition, he said, the union would demand better working conditions, including the installation of air conditioning in the panel trucks used for UPS deliveries, which the union claims puts workers’ health in danger.

“It’s not a heavy lift for the company to install air conditioning,” he said. “There’s a lot of heat stroke going on.”

Record profits at UPS

The Business frequently expresses its appreciation for its Teamster-represented staff. Despite the apparent difficulties, UPS is one of labor’s biggest allies among US corporate management in one crucial area: job figures. UPS is one of the few unionized companies with growing payrolls and union membership. Other companies have experienced a long-term decline in union membership.

Teamsters’ employment at UPS has increased due to the consistent rise in internet sales, particularly during the pandemic-era boom. It only took nine months last year to declare what was already a record profit for the entire year. Operating income for UPS increased by 50% to $13.1 billion by year’s end. Earnings increased 10% more in the first half of this year than in the previous half. “Everyone keeps getting richer except for our members,” said O’Brien.

The company’s union contract, according to UPS CEO Carol Tome, who assumed her position just as the epidemic got underway, provides a competitive advantage during labor shortages. Additionally, she is attempting to reassure UPS clients and investors that the Business will be ready if the union goes on strike. Regarding what such preparations are, she opted not to comment. “Our goal with the Teamsters is win-win-win,” she told investors in July. But she added that UPS is “building contingency plans.”

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