On July 25th, 2023 everyone involved in the shipping world let out a big sigh of relief after hearing that UPS and the Teamsters had reached a tentative agreement on a new contract. The key word here is TENTATIVE! The bottom line is that this proposed agreement will need to go out to the 340,000 Teamster members for approval. The voting process will take place between August 3, 2023 and August 22nd 2023. Results will be announced on August 22nd. 

So, could this sigh of relief only be temporary? Let us explore the facts to help you decide.

1. No Safety Net- First, it is important to point out that in the past, there was a safety net in place. What we mean by this is that historically, the Teamster Leadership team had possessed the right to accept a UPS contract offer under the 2/3 rule that had been in place. This rule required that Teamsters have two-thirds of the member’s vote “No” to reject a contract, if fewer than half of the members voted. 

This rule was actually utilized by Teamster leadership in 2018 to accept the UPS contract, when only 44% of UPS Teamsters voted on the agreement.  With this situation, 54% of the members that voted, had voted “No”. However, Teamster Leadership led by then president James Hoffa, chose to accept the agreement. This generated a great deal of criticism and dissention amongst the union ranks, and also created a platform for current Teamster General President Sean M. O’Brien to use to win his position. 

Once O’Brien came to power, he immediately put an end to the 2/3 rule, which means that a contract can be voted down by a simple majority “No” vote.  The question then becomes, what are the chances that union members will actually turn down the offer that UPS has proposed, and Teamster Leadership has agreed to? 

2. The Hard Sell –In the article that we released on July 13th, 2023, we described how Teamster Leadership needed to portray a “fight to the death” approach to win the best deal possible. They have done a great job of promoting the efforts that they have taken to win what they are calling an “Historic Contract”. They have been selling this hard with internal communications to their members, as well as to the media. In a memo to UPS Teamsters, Sean M. O’Brien stated “We demanded the best contract in the history of UPS, and we got it.”  

In a webinar that Sean O’Brien hosted for over 30K Teamster members on July 31st, he started out by saying “Thank you and congratulations.” He then went on to say that this is “the most lucrative contract in labor history.” O’Brien then reminded those in attendance of what transpired from the beginning of the negotiations to the end. He stressed all of the blood, sweat and tears that he and others that were involved in the negotiations had put in to win this “Historic deal.”

So what’s the point of all of this? O’Brien and team are doing everything they can to sell this deal. He needs to show the Teamster members that he has done what he has promised. A vote of “No” would suggest that he has not delivered what he committed to getting from UPS. 

3. Teamster Unity- Sean O’Brien and Teamster Leadership have worked hard to build unity amongst the ranks.  He and other leaders consistently stated the need for unity and for members to work together throughout the negotiation process. In most of their speeches to Teamster members, union Leaders addressed the group as “Brothers and Sisters”.  In our opinion, the Teamsters have been very successful in bringing their people together. They have implemented some great processes to communicate with members.  Updates were/are constant, and consistent with the theme of unity.  We feel that this has helped with efforts to ensure that all Teamster members were/are involved in the process. This was evidenced when the Teamsters announced on July 31st that their locals had voted 161-1 to endorse the tentative agreement. So at the end of the day, the unity that Teamster leaders have developed could lead to a majority “Yes” vote.

4. Technology-  O’Brien and his team have been very smart in their use of technology to communicate with their members. They have provided them with access to a phone App that they have used throughout the negotiations process to keep their members informed. With this, they have made it much easier to communicate with members, especially the Part Time workers. Since more than half of all UPS Teamsters work Part Time, it is imperative that these folks are onboard with the new contract.  In the past, it has been more difficult to connect with this younger generation of worker. 

So, why is this important- Well as stated above, Teamster Leadership has successfully used technology to build unity amongst their ranks. Now they are using it to sell the benefits of the UPS offer. The App provides complete details of the Tentative offer, and even has a built in wage calculator. This will make it easier to provide all workers, especially Part Timers to understand the benefits of the offer. 

However, something even more impactful is that Teamster Leadership is making it easier to vote on the contract. Members are being given 3 options to cast their vote, including Call in, On-Line, or even easier, by scanning a QR code that is included on voting instructions that members will receive by mail. This should help to increase the percentage of Teamster members that vote on the contract, especially, Part Timers. 

5. Double Edged Sword -But, can the use of technology increase the chances that Teamster Members vote down the contract? This is a possibility as well. As described above, more than half of UPS Teamsters work part time. At the same time, Teamster leadership is making it easier for them to vote on the agreement. 

Following the announcement of the tentative acceptance of the agreement by Teamster leadership there have been various reports of UPS part timers speaking out against this offer. It appears that the Teamsters might not be one big happy family! 

In an interview with CBS news, Peter Lyngso, a part-time package sorter working in Chicago, called the agreement a “sellout,” and said it doesn’t address longstanding pay disparities between full-time and part-time workers.

“There has been a very loud rank and file movement of part-timers across the country demanding a realignment of wages for what is a brutally difficult job,” he said on social media.

“I’m preparing to go to the mat over it for a no-vote,” he told CBS.

“A lot of us are frustrated and disappointed,” said Jose Francisco Negrete, a package handler in Anaheim, California, who has been working at UPS for 25 years. Negrete, who also works part-time as a classroom assistant, is part of a group of workers pushing for a $25 hourly minimum for part-timers.

So, could the use of technology increase the possibility for this agreement to get turned down? In our opinion, we feel that it could. With UPS Part Timers using Social Media to rally their ranks to push for more money, along with the convenience of voting, it could make it a lot easier for them to further their cause. The bottom line is that the UPS Part Time worker could have a much larger voice in this process than they did in the past.

ICC Logistics has been monitoring these negotiations from the start, and has made predictions along the way (important to point out that our predictions have been pretty much spot on so far!). So, we feel that it is important that we do so again. Right now, we are leaning towards the agreement being accepted by the rank and file. HOWEVER, we need to add the caveat that the ratification process is in the very early stages. So, this could change. 

It is also important to start thinking about what will happen if there is a majority “No” vote? Will the Teamsters go on strike, or will they agree to continue to work until an acceptable deal is developed?  ICC is committed to continuing our efforts to help you answer these types of important questions. So we will continue to monitor and report on important developments. 

We are also committed to helping all shippers prepare for the expected record level rate increases that these negotiations will drive, not only for UPS shippers but for ALL parcel shippers. Please reach out to us today to find out how our multifaceted solutions can protect your profit margins from further erosion. 

We are getting down to the wire with the UPS/Teamster negotiations. As of today there are only 13 days left on the Teamster strike countdown clock. At this point, there has been no word of a return, or a plan to return, to the negotiating table.

This is continuing to cause a great deal of anxiety for all shippers. 

We have continued to monitor internal Teamsters communications, as well as other media sources in an effort to provide our customers and followers with the latest information. Unfortunately, most of the information that is being reported to UPS Teamsters members from their leadership team includes details related to Practice Picketing, Teamster Unity, and Rallies across the country. 

On Saturday July 15th, UPS Teamsters General President, Sean M. O’Brien and Teamsters Local 804 President Vinnie Perrone, headed up a rally on Long Island, NY. While addressing the crowd, Mr. O’Brien stated “UPS has a choice. They can respect and do right by working people, they can pay the wages that part-time and full-time workers deserve, and they can agree to terms on a strong new contract. Or UPS can wait until August 1 and regret turning its back on the hardworking people who make it a success. We are not backing down. We will take on this corporate bully for as long as it takes to get what we’ve earned.”

Although the Teamsters have stressed that they are not willing to back down, they sort have already done so. The Teamsters had told UPS that they needed to have their last, best and final offer by July 5th, as they needed at least 3 weeks to get the agreement out to vote for ratification. They have stated over and over again, that they will not be working without a contract. They had suggested that without an acceptable offer by July 5th, they would be forced to declare a strike by the end of the month. As we all know, that offer did not come by July 5th. 

So, if the Teamsters were to be true to their word, they should be saying that they will definitely be on strike as of midnight on July 31st, given the fact that the agreement could not possibly be ratified with the limited time that is left. 

On Sunday July 16th, the Teamsters held an online meeting with Teamster members. During the meeting Sean O’Brien informed Teamster members that they will not go on strike by August 1st if they could reach a tentative agreement with UPS before then. He said that “In the event we get a tentative agreement subject to ratification of our members and we recommend it, and our members are satisfied with it, we will work until the contract is ratified….” 

This goes against all of the earlier communications that the Teamsters had put out that stated that they would not be looking for extensions of the existing agreement. Earlier in the process, O’Brien had stated that “When we say the current contract expires July 31, that means we want a new contract in place starting August 1. Not in six months. Not next spring. We demand a historic new contract on August 1, with more money in our members’ pockets immediately.” 

So this does leave some time for UPS to come back with an offer that is acceptable to the Teamsters. Also, if you think about it, would it really have made sense for UPS to make their last best and final offer by July 5th? If an offer had been made, it would have left the door open for the Teamsters to keep asking for more up until the expiration date. So, it is very possible that UPS considered this scenario, and has decided to come in with their final offer as we get closer to the deadline. 

One would hope that deep down inside, the Teamsters and their members don’t want to go on strike. After all, it would also have a major financial impact on them as well. If a strike is called, the union would need to dip into the $300M Strike fund that they reportedly have amassed. This fund could be easily wiped out if the strike went on for a few weeks.  From an individual perspective, Drivers and Part Time workers would receive far less from the union than they receive in their weekly UPS wages. 

For example, a regular Full-Time package car driver would receive approximately $520 per week in strike benefits from the union.  UPS has reported that a UPS Driver receives average weekly wages of approximately $1800. So, the average driver would see a reduction of income of over 70% for each week they are on strike. 

Also, we hope that Teamster leadership realizes the additional damage that would be done to their organization for the long term if they were to strike. Sean O’Brien has gone on record as saying that volume lost to non-union competitors will come back. Based on what we know about the industry, and have been hearing from our customers, we don’t feel that volume will return to UPS the way it has in the past. 

We expect that the remaining single-sourcing customers will be forced to permanently engage the services of other parcel delivery providers to protect themselves. Many have already done so, just due to the threat of a strike. So, not sure how the Teamsters can expect that after an actual strike, they would see all of the volume come back to UPS. There are so many more options for shippers today compared to the last UPS Teamster strike that occurred in 1997, and the options can be far less costly. So hopefully this reality has set in for the Teamsters and their leaders!

We are still uncertain about the governments intent to intervene in these negotiations. In his address to the Teamsters membership on Sunday, Sean O’Brien once again used his Boston street fight analogy, where he describes how people fought in his neighborhood streets, the unwritten rule was that if it had nothing to do with you, you just kept on walking and stayed out of it. He suggested that the government should stay out of this battle.  

Well, from what we can tell, given the fact that UPS carries 6% of the US GDP, one might say that this fight might have something to do with the US Government/US economy, so maybe they shouldn’t just keep walking! 

There have been various reports of UPS preparing for a strike by training non-union delivery workers. Earlier in the process, we had speculated that UPS might try to tap into the PVD (Personal Vehicle Delivery) process that they typically utilize during their peak periods, to help keep packages moving. However, we are not certain how they would be able to support the ongoing pick-up and sortation of packages. It is pretty safe to assume that UPS would only be able to process a small amount of volume, most likely only the packages that have reached their destination delivery facility. 

So, if UPS is truly preparing for a strike, they are most likely considering that they will begin reducing the amount of volume being picked up. We would expect that UPS would need to begin eliminating pick-ups within 5-7 days of the agreement expiration, which does not leave much more time!

Or, this all can come to an end if UPS has indeed been purposely delaying an acceptable offer, in order to prevent the Teamsters from pushing for more. Getting closer to the current agreement expiration doesn’t just put UPS’s back against the wall. As described above, the Teamsters have a lot to lose as well!  So, given this, we are making the prediction that there will be a last minute acceptable offer made, and a strike will be avoided.

Once again, we provide no guarantees that this is how it will shake out. The only thing we are willing to guarantee is that we are ready, willing and able to help you in your efforts to reduce your Transportation and Logistics expenses. So, what are you waiting for?? Reach out for us today!