TEL: (516) 822-1183

Breaking: UPS-Teamsters Update

/in , , , , /by

This week ICC Logistics Services was encouraged by developments related to the ongoing UPS-Teamster contract negotiations. There appears to have been some decent progress made this week, and a less aggressive tone from the Teamsters organization. 

The most positive news is that the National negotiations finally kicked off on Monday May 8th. It is interesting to note that these negotiations started, even though there were two supplemental agreements that have not been settled. 

Teamster leadership had been steadfast in their position that they would not start National negotiations until all supplemental agreement negotiations had been completed. It was encouraging to see that Teamster leadership demonstrated a little flexibility in the process. 

Internal Teamster communications took on a more positive tone as well. On May 9th, Teamster leadership communicated to their members that they made “Early Gains as UPS National Negotiations Move Forward”. 

They went on to describe that they had reached tentative agreement on five issues; greater time flexibility for shop stewards, improved processes for new equipment related grievances, more opportunities for existing Teamsters members, improvements impacting trailer shop employees, and expanded protections under the National Master Agreement’s non-discrimination clause. 

Teamster General Secretary-Treasurer Fred Zuckerman commented on the progress made with the National negotiations. He stated that “What’s most critical about these early hours of national negotiations is that big gains are already being made and the Teamsters have made zero concessions to get them.” 

Up until this point, most of the communications that Teamster that we had seen were quite negative, and accused UPS of dragging their feet and not being serious about the negotiations. This change in tone creates some hope that these negotiations will conclude early, without continued threats or the possibility of a work stoppage. 

We are not sure what has sparked the change in tone and approach that the Teamsters seem to be taking.  Maybe they are starting to realize that contentious negotiations are not good for them or the company? Maybe they read the last article that we put out on May 2nd that described the differences in the competitive landscape of the small parcel market compared to 1997, when the last UPS strike occurred. 

ICC Logistics is not the only company pointing out the damage that contentious negotiations, and strikes can have on the Teamster negotiations as well as UPS. In a Freightwaves article published on May 03, 2023, Satish Jindel president ShipMatrix provided some interesting facts to help demonstrate the impact of work stoppages.

Jindel pointed out that unionized LTL carriers had 60% of the LTL market in 1993. Then following an LTL Teamster strike in 1994, and continued diversion to non-union carriers, t

he share of volume moving through union carriers dropped to 35% by 2010. In 2023, unionized LTL carriers only handle 22% of the market. 

The bottom line is that shippers will take measures to avoid the risk of packages being held up in labor disputes. They also will continue to seek less costly alternatives. So, as unionized carrier rates continue to rise, there will be more pressure on shippers to seek out less costly options. This typically results in a volume shift to non-union carriers. The danger for the Teamsters in today’s world is that there are far more solid options for shippers today. 

So, with progress being made, the National negotiations will continue to heat up. It appears that most of the terms that have been agreed to so far are minor issues. Now, the negotiations will shift to the more difficult and contentious issues. 

On Thursday May 11th, Teamster leadership formally submitted their proposal to UPS to end the two tier wage system that is currently in place for UPS Drivers. “This will certainly be one of the biggest and most important proposals passed across the table to UPS by our committee,” said Teamsters General President Sean O’Brien. “Any two-tier wage system isn’t going to fly with the Teamsters. We are demanding equal pay for equal work. “

This proposal could be costly for UPS, so it will be interesting to see how they respond to this. Additionally, the Teamsters are pushing for higher pay for all of their UPS workers. So, the financial impact of a new UPS Teamster contract could wind up being costly for shippers. 

ICC Logistics will continue to monitor and report on these ongoing negotiations, as the outcome could have a big impact on the Small Parcel market. So, stay tuned for further developments. Also, feel free to reach out for us now to find out how you can get ahead of the potential impact of rising shipping costs. Don’t wait for shipping costs to get out of control! 

 

Why Data Accuracy is Critical

/in , , , , , /by

Why You Need to be Outsourcing Your Logistics and Supply Chain Data Analytics

Many companies struggle with not only how to obtain, but just as importantly, interpret Logistics and Supply Chain Data Analytics.  Without accurate data analytics it is impossible to create meaningful reports of comprehensive shipping data, and therefore inhibits a company’s ability to make sound business decisions.  

Companies should always consider outsourcing this function to firms that (1) will collect only the proper data, (2) will properly interpret that data, (3) will audit that data to ensure its accuracy and quality and (4) provide meaningful ongoing reporting so the company will be in a position to always make sound business decisions.

Outsourcing logistics and supply chain data analytics will bring several benefits to a company. 

Expertise: Outsourcing gives you access to a team of experts who have the necessary skills and experience to analyze data effectively. These experts will provide valuable insights and recommendations to optimize your supply chain operations and continually improve efficiency.

Cost-effective: Outsourcing is a cost-effective option compared to hiring a full-time team of data analysts. It will reduce overhead costs such as salaries, benefits, and infrastructure expenses.

Improved efficiency: Outsourcing lets you focus on your core business functions while leaving the data analysis to the experts. This results in improved efficiency and productivity, as you will spend more time on other critical business areas.

Access to advanced tools and technologies: Outsourcing provides access to advanced data analytics tools and technologies that may be expensive to acquire and maintain in-house. You will stay ahead of the competition and make better-informed decisions.

Scalability: Outsourcing provides a scalable solution to your data analytics needs. As your business grows, your data analytics requirements may change, and outsourcing will allow you to adapt to these changes more quickly.

Data Analytics is not a one and done process

Data analytics analysis must be an on-going process to obtain real value and businesses need to be able to trust the data that is being analyzed and reported.

The goal of any business analytics program is as follows:

The business environment is constantly evolving, and new challenges and opportunities arise regularly. Data analytics is a continuous cycle of data gathering, analysis, and action that requires monitoring.

Changing business environment: Ongoing data analytics analysis keeps businesses up-to-date with the latest trends and provides the ability to adjust their strategies accordingly.

Continuous data gathering: Businesses must continue to collect relevant data and update their analysis as new data becomes available.

Continuous improvement: By identifying areas for improvement and making necessary changes, businesses will optimize their performance and achieve better results.

Proactive decision-making: By analyzing data on a regular basis, businesses will identify potential issues before they become problems and can take corrective action to mitigate them.

Why use a qualified Third Party and Impartial resource?

Customers shipping data that is managed by a qualified third party and impartial resource is essential to obtaining clean and truly accurate logistics data for the best supply chain analytics and planning. 

Expertise: Third-party data analytics consultants have the necessary expertise and experience to manage shipping data effectively. They have access to advanced tools and technologies to identify errors and inconsistencies in data, and they provide valuable insights and recommendations based on their analysis.

Impartiality: These firms are impartial parties who provide an unbiased view of all of the data they analyze. They review the data objectively and provide feedback that is not influenced by internal biases or agendas.

Consistency: They provide consistent management of shipping data across multiple locations and carriers. They ensure that the data is accurate, complete, and up-to-date, regardless of the carrier or location.

Cost-effective: Outsourcing the management of shipping data to a qualified data analytics expert is a cost-effective option compared to hiring an internal team of data analysts or dedicating internal resources to attempt to manage the data.

Scalability: These data experts will provide a scalable solution to managing shipping data. As a business grows or changes, they will adjust their services and provide additional support as needed.

Limited resources: Companies have limited resources dedicated to managing shipping data, which will lead to errors going unnoticed. 

Internal biases: Companies inherently have internal biases that influence how they manage shipping data. They may overlook errors or inconsistencies that are not aligned with their internal priorities or goals.

The Bottom Line!

A major benefit of outsourcing your logistics data analysis is the ability to benchmark your information against a vast data pool of like shipping characteristics. This is nearly impossible to replicate in-house.

Access to a vast data pool: Data resources that is continuously updated and contains shipping data from a range of industries and companies. This data is used to benchmark a company’s shipping data against similar shipping characteristics and identify areas for improvement.

Industry expertise: Industry-specific expertise that helps companies understand how their shipping data compares to industry benchmarks. This knowledge is used to develop more effective strategies to improve supply chain operations.

Objective analysis: Provides an objective analysis of a company’s shipping data, which will identify areas for improvement that may not be immediately apparent to in-house staff. This helps companies make more informed decisions about their supply chain operations.

Cost-effective: Provides the necessary expertise, tools, and resources to conduct the analysis at a lower cost than an in-house team.

In Summary

Outsourcing your Logistics and Supply Chain Data Analytics:

  • provides a cost-effective and scalable solution that will improve efficiency, provide valuable insights, and allow you to focus on your core business functions.
  • ensures a qualified third party and impartial resource obtains clean and truly accurate logistics data for the best supply chain analytics and planning. 
  • Has the necessary expertise, impartiality, and scalability to manage shipping data effectively and efficiently.
  • enables businesses to stay current, continuously improve their operations, and make proactive decisions based on accurate and up-to-date information.
  • enables companies to identify and address weak points in their supply chain models and improve overall supply chain performance.
  • guarantees 100% accurate logistics data while also providing valuable benchmarking against a vast data pool of like shipping characteristics. 
  • Ensure companies are using best-in-class marketplace standards. 

Reach out to us today to learn how we can help you achieve your goals.

USPS Pricing Updates and Improvements

/in , , , /by

USPS Ground Advantage Reduces Prices, Simplifies Shipping Solutions and Improves Service Reliability

The United States Postal Service has filed with the Postal Regulatory Commission, (PRC) to adjust prices for some shipping services and enhancing ground shipping solutions.

The U.S. Postal Service today established proposed published pricing for its new product offering, “USPS Ground Advantage.”  Pending favorable review and comments from the Postal Regulatory Commission, USPS Ground Advantage would launch on July 9.  At launch, USPS Ground Advantage would provide a simple, reliable and more affordable way to ship packages up to 70 lbs. in two-to five business days.

USPS Ground Advantage Will Feature

  • $100 insurance included for both retail and commercial customers, USPS Ground Advantage outbound and return parcels.
  • Package forwarding and return to sender endorsements will be included for the USPS Ground Advantage product offering.
  • Free package pickup on the carrier’s route.

Published prices for USPS Ground Advantage will decrease 1.4 percent relative to current Parcel Select Ground and First-Class Package Service pricing. USPS Ground Advantage Retail prices will decrease 3.2 percent and USPS Ground Advantage Commercial published prices will decrease 0.7 percent.

Over the past year the Postal Service has focused on strengthening its shipping solutions as part of its 10-year strategic plan for service excellence, on-time delivery, and revenue generation from enhanced package delivery services. With more than 31,000 Post Offices, various pickup options, including free package pickup, and no surcharges for fuel or residential delivery, the Postal Service provides exceptional value and convenience to customers.

Shipping Service prices are primarily adjusted according to market conditions. The Postal Service governors evaluate shipping rates and fees and adjust them when needed as part of the Postal Service’s 10-year ‘Delivering For America” plan to return the organization to financial sustainability and achieve service excellence while maintaining universal six-day mail delivery and expanding seven-day package delivery.

The complete Postal Service price filings with prices for all products can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. The Postal Service provides additional resources to assist customers regarding price changes. These tools include price lists, downloadable price files and Federal Register Notices. This information will be available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.

Could this new USPS service and price reduction be viewed as an option for parcel shippers just in case the Teamsters decide to stage a work stoppage at UPS?  We’ll just have to wait and see.  Reach out to us if you have questions about how this new pricing and improved service offerings will affect your operations.

UPS News:Teamsters and Q1 Earnings

/in /by

So the big news this week in the transportation world was UPS’ reported miss on earnings and revenue for the 1st Quarter of 2023, along with lowered outlook for full year revenue and margins. For the quarter ended March 31, net income fell to $1.9 billion, or $2.19 per share, from $2.66 billion or $3.03 per share, a year earlier. Revenue fell 6% from the same quarter last year. 

In opening statements made by UPS CEO Carol Tome on the UPS earning call held on 04/25/23, she suggested that the volume misses were being driven by the downturn in the US economy. She said that “In the U.S., relative to our base plan, volume was higher than we expected in January, close to our plan in February, and then moved significantly lower than our plan in March, as retail sales contracted and we saw a shift in consumer spending.” She noted that a “change in consumer shopping behavior” has led to increased spending on services and categories such as food and dining, rather than the kinds of goods that might be delivered by UPS.

We found it interesting that initially, Tome and UPS CFO, Brian Newman did not attribute any of the volume declines to the impact that the UPS Teamster negotiations could be having on customer behavior.  We know for sure that FedEx and other carriers have been using scare tactics in their recent sales efforts. Customers have been told by UPS competitors that “if you don’t move volume to us now, we will not be able to help you if there is a UPS work stoppage.” This has been coupled with aggressive pricing offers that have made it attractive for customers to move volume away from UPS.

In her opening comments, Tome remained consistent in her message regarding the Teamster negotiations. She continued to express her confidence that a new agreement will be reached before the end of July. She stated that “Negotiations on a new contract with the Teamsters are underway and good progress has been made on many of our local supplemental agreements.” 

Apparently, we were not the only ones thinking that the Teamster negotiations are impacting UPS volume. During the Q&A portion of the UPS earnings call, one of the analysts covering the call, Amit Mehrotra of Deutsche Bank, asked the difficult question related to the negotiations.  Amit stated “Carol, it’s great that you think a win-win-win is still achievable, but the rhetoric is getting like really bellicose. And so, I’m wondering if you’d give some color on that dynamic because it seems like it’s costing you guys some volume right now.”

The responses that Tome and Newman had for this question seemed to suggest that only a small part of the volume decline is being driven by customer concern related to the UPS Teamster negotiations. Tome stated “If we look at the year-over-year decline in the U.S. a little over 1 million packages today, we would attribute over 60%, nearly 62% of the decline due to macro and a plan decline with our largest customers. We’re declining with them in a mutually agreed way. So it’s really a macro story here and we’re delighted to see that the volume has stabilized.”

However, as Tome continued to respond to the analyst’s question, she did acknowledge that some declines could be driven by customers diverting to protect themselves from a UPS work stoppage. In discussing UPS plans for growing volume, she said, “The third leg of our strategy is to win back for any volume that has diverted. And we did have some it would be unreasonable to expect that we wouldn’t have any for volume that has diverted. We are going to win it back because they’ve told us they’re coming back.” 

Read more

How to Find the Right Logistics Partner

/in , , , /by

From Chaos to Control: Selecting The Perfect Logistics Partner and Carriers

When selecting a logistics services supplier, there are several key factors to consider:

By considering these factors, you will choose a logistics services supplier that meets your needs and helps you streamline your supply chain for maximum efficiency and cost-effectiveness.

How do I find, select, and manage logistics suppliers to meet my company’s needs and goals? 

You can find logistics suppliers through various channels, including online searches, industry publications, trade shows, and referrals from other businesses. However, the best source for finding the “best of the best” logistics service providers is to rely on industry experts who have first-hand experience on which suppliers would be best for your business.  Remember this is a not “one size fits all” business decision.  All potential suppliers should be evaluated based upon the factors listed above, and we can help you with that process by also considering their physical locations and the types of goods they may specialize in servicing.

Once you have selected a logistics supplier, it is important to establish clear communication channels and expectations. You should conduct regular reviews of their performance to ensure that they are meeting, and hopefully, exceeding your needs and goals. 

You should also consider implementing a formal supplier management program, to help track performance metrics, identify areas for improvement, while building a stronger relationship with your logistics suppliers and carriers. This can help ensure that your logistics operations are efficient, reliable, and cost-effective.

How can I build long-term partnerships with my suppliers and carriers?

Building long-term partnerships with your suppliers will be mutually beneficial for both parties.   

  • Communicate regularly: Establish open lines of communication with your suppliers and regularly provide feedback on their performance. This will help identify issues early on, and work together to resolve them.
  • Build trust: Trust is a critical component of any successful partnership. Be transparent about your expectations, treat your suppliers fairly, and follow through on your commitments.
  • Foster collaboration: Encourage your suppliers to collaborate with you on finding ways to improve your business operations. This will help build a sense of partnership and shared goals.
  • Provide incentives: Offer incentives to your suppliers for meeting or exceeding performance goals. This will motivate them to go above and beyond in delivering value to your company.
  • Share information: Share all relevant information with your suppliers to help them better understand your business needs and goals, this way they can tailor their services to better meet your needs.
  • Invest in supplier development: Invest in developing the capabilities of your suppliers. This can help them become more valuable partners over time.
  • Conduct periodic reviews: Regularly evaluate your suppliers’ performance and provide feedback. This will help you identify areas for improvement and work together to address any issues.

Read more

Update on UPS Teamsters Negotiations

/in , /by

In our last article related to the current UPS/Teamster- Contract negotiations, we reported that there were some positive developments worth noting. One of the main items that we discussed was the fact that Satish Jindel, president of Ship Matrix Inc., had predicted that there will be an agreement between UPS and the Teamsters no later than June 30th, 2023. He has also publicly speculated that there is no chance that there will be a strike. However, given the developments that have occurred within the last couple of weeks, we are wondering if Mr. Jindal will pull back on the statements he has made. 

Over the past couple of weeks, we have seen Teamster Leadership continue to take an aggressive stance in their approach to these negotiations. First, the Teamsters held a rally at Teamsters Local 25 in Boston on April 2 as they prepare to begin national negotiations, which are scheduled to start on April 17th in Washington DC. Several Teamster leaders addressed the audience, including General President Sean M. O’Brien, and General Secretary-Treasurer Fred Zuckerman. 

These leaders made some of the most aggressive statements that we have seen since they have started their campaign to negotiate a new and improved deal for the Teamsters.  UPS Leadership, had indicated that that these negotiations will be “Loud and Late”. Well, this rally was extremely loud, and Teamster Leaders certainly turned up the volume as they attempted to rile the Teamster members that attended this rally. 

“We will set the tone for organized labor and the entire country with this contract. There is no better organization to set that bar high than the International Brotherhood of Teamsters,” O’Brien said. “We are not going to accept and take what UPS gives us. UPS Teamsters have fire in their eyes and the intestinal fortitude to take on this company.”

Teamster leaders that spoke at this rally emphasized the need for Teamster membership to be united in this fight against the company. They stressed the fact that they will fight hard and are not willing to accept any concessions. Sean O’Brien emphasized that his leadership team intends to use these UPS/Teamster negotiations as an example to all companies, including Amazon, that they should not try to challenge the Teamsters. 

“We are going to make history, we are going to make an example of a Fortune 500 company, so that when we go to the table locally, when we go to the table regionally, when we go to the table nationally, with any employer, they’re going to remember the beating that UPS took, and the leverage that we had, and they’re going to say, I don’t want any part of that.” 

Also, in our last article, we reported that efforts to complete negotiations for the nearly 40 supplements and local riders that are part of the National Master Agreement have been challenging. Teamster leaders have vowed that they would not kick-off the National negotiations until agreements had been made on all of these supplemental agreements. There appears to have been little progress with these supplements since we reported this on April 6th. 

The Teamsters have reported that only 10 of 40 supplements to the national contract have been resolved since those regional talks started in January. They are blaming UPS for these delays. 

“We have clearly stated our intentions to UPS from the beginning that there would be no national negotiations until these regional contracts are completed,” Teamsters General President Sean O’Brien said in the statement.

UPS Leadership has responded to this concern with the following statement, which they listed on the UPS website on April 12th. 

“UPS will be in Washington, D.C. next week ready to negotiate with the Teamsters on the National Master Agreement and the supplemental agreements.” 

“Discussions around national negotiations and supplemental agreements often take place at the same time. We have bargained in good faith since the start and will continue to review and consider all proposals that are brought to the table.”

“We are committed to reaching an agreement that provides wins for our employees, the Teamsters, UPS and our customers. Taking care of our people and delivering for our customers is our top priority.”

The thing that is concerning with this situation is that UPS and the Teamsters can’t even seem to agree on how the negotiating process should work. The Teamsters are saying “No National discussions until the supplemental agreements are complete.” UPS Leadership is saying that they want to have the discussions in tandem, as they have in the past. This appears to be a major disconnect, and will not help with efforts to wrap these negotiations up early as predicted by the President of Ship Matrix, or in advance of the July 31st deadline. 

It will be interesting to see how things develop in the coming days, and to see what actually happens on April 17th, as this could set the stage on what to expect as we get closer to the July 31st deadline. ICC Logistics will continue to stay close to this situation and provide our clients and followers with meaningful updates as they occur. Reach out to us if you have specific questions or concerns, we’re a phone call or email away.