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UPS/Teamsters: Negotiations Have Begun!

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We’re supplying you with the information you won’t find anywhere else!

In our last article, we reported that the Teamsters union had informed UPS Leadership that they were unwilling to kick-off National Negotiations that were planned for 04-17-23 until all Supplemental Negotiations were complete. At that point only 10 of the 40 Supplemental Agreements had been finalized. 

According to internal Teamsters communications, “last week began with UPS refusing to make proposals, but ended with “panicked phone calls from company negotiators after the Teamsters announced there will be no national negotiations until supplements are resolved…” The internal communications went on to say that “The hardline approach pushed two supplements- The Michigan Rider, and the Local 243 and Metro Detroit Agreement- to reach full tentative agreements.” This still leaves 28 of the 40 Supplements open.
So, we were interested to see if the Teamsters would show up in Washington, DC this past Monday.  The company had released a statement on their website, indicating that they would be there as planned, and would be prepared to negotiate the National and Supplemental agreements at that point. 

On the positive side of things, the Teamsters National Negotiating Committee, including rank and file members and representatives of all supplemental negotiating committees, were present in Washington, DC on the 17th. However, the tone that they set might have had some UPS Leaders wishing that they had not. 

According to the Teamsters, UPS provided it’s opening statement through a PowerPoint presentation, while they presented a video testimonial from members nationwide “sharing their trials and tribulations working at UPS”. This was an interesting approach as it personalized the impact of the main negotiables that the Teamsters are demanding. 

Below is a list of the demands that the Teamsters are making, along with the message that the video attempted to deliver. 

Wages– Teamster members are looking for improved wages, especially for Part Timers. Comments in the video from Teamster General President, Sean O’Brien, and General Secretary-Treasurer, Fred Zuckerman revolved around the increased profitability and stock price that the company has seen since the last contract negotiations in 2018 (both of which have doubled). Zuckerman commented that “Teamsters at UPS can’t just survive, they need to thrive, just like the company.”

22.4 Drivers- This is the two tiered Driver category that currently exists at UPS. 22.4 Drivers are paid much less, and don’t receive the same benefits as other UPS Drivers. Several 22.4 Drivers in the video expressed concern that they are being unfairly treated, and called for the elimination of this two tiered system. 

Excessive Overtime- The video featured multiple Drivers complaining how they have been forced to work 6 days per week, and how this impacts their health and family life. One driver described how he has been forced to work 6 days per week since November of 2019. Some described it as “The Peak Season that never stopped”. The fact that UPS is still charging for Peak Surcharges suggests that this could be an accurate description. 

Inward Facing Camera’s/ Harassment- Several UPS Drivers explained their opposition to the use of inward facing camera’s in their vehicles. They suggested that UPS already has significant technology in place that allows them to monitor their performance and activity including; GPS, Telematics, and their DIAD board. Some felt that using these cameras could be used improperly to harass drivers, and would be an invasion of privacy.

Workforce Investment- UPS employees stressed the need to create more Full Time jobs for Part Time workers. They also indicated that the company needs to contribute more to Pensions and to ensure Pension stability.  Other employees stressed the need for the company to invest in ways to protect workers from extreme heat. One driver described how he had experienced Heat Stroke, which required a hospital visit. 

PVD’s- Personal Vehicle Drivers– UPS employees described how the use of these drivers during peak season, takes work away from regular/ Teamster drivers. Some described situations in which there was not enough work for Regular drivers and they were sent home, while PVD’s were still working. They also suggested that PVD’s do sloppy work, and make the company and their drivers look bad. 

Subcontracting- UPS Trailer drivers complained that the company is using more Subcontractors than they need to, and that work is being taken away from Teamster Drivers. They are calling for a reduction/ elimination of subcontractors for UPS Trailer moves.

Martin Luther King Day/ Juneteenth– Several UPS employees stressed that UPS should fully recognize these holidays by adding these as paid holidays for workers. Comments made from employees suggested that UPS is big on promoting diversity, but they need to put their money where their mouth is.

Obviously, all of these items would come at a cost to UPS, some of them being significant. UPS Leadership has indicated that the two sides are not far apart, and that an agreement should be easy to reach in advance of the July 31st deadline.  So, it will be interesting to see how much the company is willing or able to give up. 

At the opening of these negotiations, Teamster leadership suggested that there is little wiggle room from their perspective. President, Sean O’Brien stated “We don’t work for this company. We work for our members. It’s not Wall Street that concerns us, it’s Main Street.  We are not going to negotiate a contract that is cost neutral or with concessions. We are going to push this company and its management harder than they’ve ever worked before, and for the first time you’re going to face a productivity standard. We have 12 weeks until this current contract expires. Let’s get to work.” 

So, obviously there is a great deal of work to do in a short period of time. Therefore, it is imperative to monitor this situation for ongoing/ meaningful developments. As previously committed, ICC Logistics will continue to monitor this situation, and provide updates to ensure that our clients and followers are duly informed.

US Postal Rates Going Up, Again!

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U.S. Postal Service Files Notice with PRC for New Mailing Services Pricing

In announcing this latest postage increase, the US Postal Service stated the increases are a result of the following conditions:

  • Actions taken to address continued elevated inflation and prior years defective pricing model
  • No price increase for USPS Connect Local, which gives businesses of all sizes the ability to reach local customers at affordable rates
  • Reduced pricing for some Retail Priority Mail Flat-Rate products below the temporary price currently in place

On April 10, 2023, the United States Postal Service filed notice with the Postal Regulatory Commission (PRC) of mailing services price changes to take effect July 9, 2023. The new rates include a three-cent increase in the price of a First-Class Mail Forever stamp from 63 cents to 66 cents.

If favorably reviewed by the Commission, (which we are certain will be the case), the proposed increases will raise First-Class Mail prices approximately 5.4 percent to offset the rise in inflation. The price changes have been approved by the Governors of the U.S. Postal Service.

The price for 1-ounce metered mail will increase to 63 cents, and the price to send a domestic postcard will increase to 51 cents. A 1-ounce letter mailed to another country would increase to $1.50. There will be no change to the single-piece letter and flat additional-ounce price, which remains at 24 cents. The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, money order fees and the cost to purchase insurance when mailing an item.

The proposed Mailing Services price changes include:

Current PricesPlanned Prices
Letters (1 oz.).63 cents.66 cents
Letters (metered 1 oz.).60 cents.63 cents
Domestic Postcards.48 cents.51 cents
International Postcards$1.45$1.50
International Letter (1 oz.)$1.45$1.50

As operating expenses fueled by inflation continue to rise and the effects of a previously defective pricing model are still being felt, USPS stated that these price adjustments are needed to provide the Postal Service with much needed revenue to achieve the financial stability sought by its “Delivering for America 10-year plan.” According to USPS, the prices of the U.S. Postal Service remain among the most affordable in the world.

The PRC will review the changes before they are scheduled to take effect. The complete Postal Service price filing, with prices for all products, can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. The Mailing Services filing is Docket No. R2023-2. The price tables are also available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.

Turning Shipping Invoices into Revenue

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Many companies employ outsourced firms to pre-audit and pay their freight invoices.  This is not only helpful to catch all invoicing errors, but it also is a much less costly way to process freight invoices than typical in-house operations. Utilizing a pre-audit firm does not, and should not preclude company’s from also using a Post Audit firm to audit the results.

Post-auditing of freight invoices refers to the process of reviewing and verifying the accuracy of freight invoices after they have been paid. The purpose of post-audit operations is to identify any errors or overcharges in the billing process and recover any funds that were incorrectly paid during the initial audit process.  And yes, millions of dollars are recovered each year during the post audit process.

The post-audit process typically involves the following steps:

  1. Collecting Data from the carrier, such as invoice files, bills of lading, and delivery receipts.
  2. Collecting Freight Payment Data from the initial pre-audit firm, or in-house payables departments.
  3. Checking for Errors such as incorrect, or improper charges, incorrect weights, and incorrect classifications.
  4. Verifying Charges against the contracted rates to ensure that the charges are consistent with the terms of the contract.
  5. Resolving Discrepancies that are identified during the audit process directly with the freight carriers.  
  6. Recovery of Funds for any overcharges that are identified during the post-audit process. This may involve issuing a credit memo or receiving a refund.

Read more

Package Size Optimization

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One Size Does NOT Fit All!

Have you ever had a package delivered, and been surprised by how large the shipping box was compared to the item that you ordered? For example, a shoe box packed inside a box that could have held a small refrigerator.  To the average person, a scenario like this might be laughable and somewhat entertaining. But, the company that shipped the package should definitely not feel the same sentiment. Actually, they should be crying. 

When this happens in my house, my wife usually calls this to my attention. I normally hear something like, “look at this! What were they thinking!” or “how did this happen?” Given my long term experience in the Transportation industry, I know exactly what happened. More importantly, I know why it shouldn’t happen, as well as how to help prevent these types of costly, wasteful, and brand damaging scenarios. 

First let’s get to the “How this happens”. There are a number of things that drive improper carton utilization. 

  1. With the growing popularity of Omni-Channel shipping, more shipments are being Fulfilled from Retailer’s stores. Stores often lack the right resources, material, and training to properly pack E-commerce orders. After all, a store is not a Distribution Center. Stores sometimes reuse boxes that they received store inventory in to pack individual customer E-Commerce orders. 
  2. Lack of training or focus on packaging processes at the Distribution/ Fulfillment Centers. Many companies are so focused on getting orders shipped out quickly and accurately, that they overlook the importance of proper packaging. Companies sometimes limit the variety of box sizes they order for shipping, which can lead to their packers being forced to use shipping cartons that are much larger than the product being shipped. 

Now, let’s discuss the ramifications of poor carton utilization or the “WHY this shouldn’t happen.”

  1. As described above in the ship from store scenario, stores often reuse boxes to send out consumer orders. Although this might help save on corrugated and carton disposal costs, it drives up shipping expenses and could damage customer’s perception of the brand. There is also the increased potential for damage to the shipment due to the fact that reused cartons can have their structural integrity compromised from their initial trip to the store.
  2. Sustainability is a hot topic for all companies today. Using the wrong size cartons to ship product has a negative impact on the environment. Besides the corrugated waste associated with non-optimized cartons, there is also a negative impact on carriers CO2 emissions. The more space, or air that shippers leave in their boxes, the less amount of packages carriers can move on their equipment. So, this contributes to an increase in the number of vehicles that carriers need to put on the road, which obviously increases CO2 emissions. 
  3. The biggest and most impactful reason why shippers should use appropriate shipping carton sizing is Cost. Dimensional Weight is often used over Actual Weight when determining shipping cost.  For example, if a pair of shoes is shipped in properly optimized box measuring 14” x 10” x 7”, the dimensional weight of the box would be 6 Lbs. However, if a shipper used a box that measured slightly larger at 16” x 12” x 9”, the dimensional weight increases to 9 lbs. The increase in published shipping cost can increases by as much as 15% with this minor increase in package size. Additionally, the cost of the box itself would be greater since corrugated suppliers usually charge more for larger containers. When you consider the increase in cost that a shipper could incur across hundreds or thousands of packages that are not properly optimized, the amounts could be staggering! 

So, finally, let’s get to the most important part of this article- “HOW TO STOP THIS FROM HAPPENING!”

The answer is very simple; Reach out to ICC Logistics Services to find out how we have helped drive significant cost savings and improved bottom lines for many companies with our Packaging Optimization Services.  A typical engagement starts with a baseline assessment of the end-to-end packaging process, starting with product item master accuracy through shipping. Often, the process targets a narrowly defined problem. After establishing a track record of success, services can expand with increasing ROI – even exceeding 1,000%! 

Save money, Protect Your Brand, and Protect the environment- seems like a no-brainer!

New US Customs Regulations

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Recently, U.S. Customs and Border Protection (CBP) released changes to Part 111 of the Customs Regulations regarding Customs Brokers. These changes have a significant impact on how licensed customs brokers organize their business relationships with CBP, importers and freight forwarders. The new rules are effective immediately.

Section 141.31 of the Customs Regulations requires a broker to have a Power of Attorney (POA) in order to engage in “customs business” on behalf of an importer or drawback claimant. A POA is a written statement legally authorizing a person to act for another. The person granting the authority is known as the principal or grantor (importer of record or drawback claimant), while the person being authorized to act is the agent or grantee (broker).

“Customs business” means those activities involving transactions with CBP concerning the entry and admissibility of merchandise, its classification and valuation, the payment of duties, taxes, or other charges on merchandise by reason of its importation, and the refund, rebate, or drawback of those duties, taxes, or other charges. Customs business also includes the preparation and activities relating to the preparation of documents and/or the electronic transmission of documents and parts of documents intended to be filed with CBP in furtherance of any other customs business activity. Only a licensed customs broker is permitted to conduct customs business on behalf of an importer or drawback claimant.

Revised CFR section 111.36 provides that brokers must now execute a POA directly with the importer or drawback claimant without going through a third-party intermediary such as a freight forwarder or agent before transacting customs business on behalf of an importer or drawback claimant. The POA must be executed directly between the client and the broker. POAs authorized by a forwarder, agent, or other party on behalf of an importer will no longer be valid for the purpose of the broker transacting customs business. A broker must obtain new POAs from existing clients if the current POA is issued by the forwarder, agent or other party.

All importers should make sure they have a direct Power of Attorney with their Customs Broker.

If you have additional questions, please reach out to ICC Logistics we’d be happy to help you navigate.

Latest Update on China-Origin Goods

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Effective immediately, US Customs and Border Protection (CBP) will require the declaration of a valid postal code on all China-origin goods. The postal code forms part of the amended Manufacturer Identification Number data element and until now has not been a mandatory requirement for customs entries.

The implementation of the new data element is set to provide notification to importers of the region that their goods have been produced and will receive notice if an invalid Chinese postal code is provided, or if a postal code linked to the Uyghur region has been provided.

Goods produced in the XUAR (Xinjiang Uyghur Autonomous Region) are subject to the Uyghur Forced Labour Prevention Act, which applies the automatic assumption that goods made in the region were done so using forced labor. All goods imported into the USA from the Uyghur region will be subject to detention upon arrival.

Businesses can prepare for these new regulations by doing the following:  When purchasing from Chinese manufacturers or businesses, importers should verify that all commercial documents include a valid Chinese postal code against the address of any suppliers used.

And, what happens if imports are detained?

If goods are detained under the new regulations, to have them released businesses must provide proof that their goods were not made with any forced labor.

Importers may request an exception to the rebuttable presumption from CBP during detention, after an exclusion, or during the seizure process as described in the UFLPA Operational Guidance for Importers.

All costs incurred as a result of detainment, detention or customs hold will be for the account of the importer.

Reach out to ICC Logistics if you have any additional questions. We’re here to help you navigate.