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Update on UPS Teamsters Negotiations

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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.  

 

UPS-Teamster contract negotiations

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ICC Logistics Services is committed to keeping our clients and followers up to date with developments related to the upcoming UPS-Teamster contract negotiations. As reported in our previous articles on this topic, the agreement is due to expire on July 31, 2023, and Teamster Leadership has indicated that they will strike if they do not have a new agreement by this date. So, it is imperative that shippers stay close to this situation, due to the major impact it could have on their supply chains.

There have been a couple of interesting developments in the news regarding the UPS Teamsters negotiations since our last article on March 7th, 2023. We have seen both positive and negative developments related to the situation. 

First on the positive side of things, Satish Jindel, president of Ship Matrix Inc., made the bold prediction 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. Mr. Jindel does not claim to have any insider information, and is basing his predictions on “having lived through many contract cycles and knowing the current market dynamics to connect the dots and make a very credible forecast.”

Mr. Jindel has been known to make accurate forecasts in the past, as he was the first to report last year that Frederick W. Smith, founder of FedEx Corp., would step down as CEO after 50 years. So, apparently the accuracy and effectiveness of his crystal ball needs to be considered!

This prediction does align with UPS CEO Carol Tome’s position that the Agreement will be completed in advance of the expiration. She has indicated that both sides are close on key issues, despite all of the noise that has been seen in the media. Also, as reported in our last article on the topic, Ms. Tome has made comments related to her desire to take care of her people when addressing large UPS audiences. So, maybe Mr. Jindel is onto something here. 

However, Teamster publicity regarding the negotiations don’t appear to be as rosy.  UPS Teamsters work under nearly 40 supplements and local riders to the National Master contract, with different language on some key issues, from discipline to paid time off. UPS and the Teamsters have already kicked off negotiations for these Supplements and Riders. 

Teamster websites have reported that “The Teamsters’ supplemental negotiating committees are holding firm against UPS’s concessionary proposals.” They indicated that the Supplemental Committees continued to hold the line on issues ranging from the use of lower paid tier drivers, the use of Personal Vehicle drivers and other major areas of concern. 

The Teamsters stated that UPS negotiators were initially dragging their feet and failed to take bargaining seriously. They claim to have seen more movement when their supplemental committee chairs reminded UPS of the looming April 17 deadline (the date that the National Negotiations are scheduled to kick-off). 

The Teamster website also made the following statement:

“General President Sean M. O’Brien and General Secretary-Treasurer, Fred Zuckerman are making it clear to UPS that the company needs to make significantly more movement before national negotiations begin.”

Earlier this year, the UPS Management team had been communicating that the Teamster negotiations would be “Loud and Late” So, at least one of the predictions that they made is coming to fruition. Obviously the comments posted on the Teamster website have been “Loud”.  Also, one can say that the negotiations are “Late”, as the National negotiations are due to kick-off much later than they typically do. 

However, it is interesting that we are now starting to see speculation both inside and outside of UPS, that suggest that the negotiations will be completed in advance of the agreement expiration on July 31, 2023.  One could speculate that UPS and the Teamsters might agree on one very important thing- The longer that the negotiations drag on, the more packages and Teamster jobs UPS will lose. 

We have heard of more and more shippers moving volume away from UPS, and adding other carrier shipping options to protect themselves from a work stoppage or slow down. So, maybe both sides are beginning to feel the pressure. The combination of a slowing economy along with volume bleed due to customer anxiety could have a major impact on UPS as well as the Teamsters. So, hopefully the increased tension that this creates will lead to a creative breakthrough for the negotiations. 

Either way, it is imperative that shippers stay close to this situation to ensure that they are in a position to limit the impact to their businesses. ICC Logistics Services will continue to monitor this situation, and provide our clients and followers with meaningful updates as they occur.  

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!

UPS Teamster Negotiations Update

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ICC Logistics Services is committed to keeping our customers and followers up to date with developments related to the upcoming UPS-Teamster contract negotiations. The agreement is due to expire on July 31, 2023, and Teamster Leadership has indicated that they will strike if they do not have a new agreement by this date. So, it is imperative that shippers stay close to this situation, due to the major impact it could have on their supply chains.

It has been fairly quiet since the last article we published on February 2nd, 2023 on this topic. However, there have been some interesting developments within the past few weeks that we felt were worth noting. 

On the Teamsters side of the house, their Membership Locals have continued to meet, in an effort to rally the troops in a united front against  UPS. One of the teamsters largest Locals, Local 804 met the morning of the Superbowl Sunday in Nassau County NY. There were over 600 Teamster members in attendance at that meeting.

Local 804 president Vinnie Perrone, said that “he hadn’t seen a membership meeting this well attended since Ron Carey was reelected for a second term as president of the International Brotherhood of Teamsters.” 

This was an interesting parallel to draw, since this was back in 1996 after Carey ran as a critic of weaknesses in the UPS contract. Current Teamster President, Sean O’Brien has come to power using a similar platform, and has vowed to fight hard against UPS to get the best contract possible for its members. 

Following his election in 1996, Carey then went on to lead the Teamsters in a nationwide strike that lasted fifteen days in 1997. It seems that the attitude of the current UPS-Teamster membership is in line with the one that existed when the last strike occurred. This certainly leads to one asking themselves – Will history repeat itself? 

Mr. Perrone made some aggressive statements as he addressed the members of Local 804. “UPS’s opening position is crystal clear: all the company wants after a year with $101 billion in revenue is more money off your backs,” said Mr. Perrone. He went on to describe how the pandemic has been good to UPS, and how their revenue has grown by an average of 11% during this time. 

Membership at this meeting also discussed concerns about recent layoff’s that they have experienced. On February 13th, UPS Leadership had confirmed that they were taking steps to reduce its workforce in areas that were experiencing softening demand. 

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Update: International Mail Disruptions and Resumptions

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The following International Mail Services are experiencing disruptions due to the global pandemic.  Additionally, some services are now resuming. 

Please be assured that we will continue to post these service disruptions and resumptions just as soon as we are aware of them and as the list grows, they will be added here. 

Learn How to handle Business Disruptions by Downloading our E-Book: “How to Navigate the COVID19 Crisis”

International Mail Service Resumption Notice

Effective Friday, March 3, 2023, the Postal Service™ will begin resuming acceptance of mail destined to the following:

  • Cuba

This service resumption affects the following mail classes: Priority Mail Express International® (PMEI), Priority Mail International® (PMI), First-Class Mail International® (FCMI), First-Class Package International Service® (FCPIS®), International Priority Airmail® (IPA®), International Surface Air Lift® (ISAL®), and M-Bag® items.

The Postal Service is closely monitoring service impacts related to the COVID-19 pandemic and will continue to update customers until the situation returns to normal.

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Are You Auditing the Auditor?

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Forever, businesses have relied on either in-house audits or external audits utilizing their accounting firms, (or a combination of both), to “audit” their operations. The audits of course are meant to validate that the company’s logistics and supply chain expenditures fall “in line” with their business operations and that their operational costs are “not out of control.”   While the company’s internal and accounting firms perform these audit services, the real question is, do they have the required expertise to truly assess whether the company is actually receiving “the best value” for their supply chain and logistics dollar?

It can be said that in some cases, these audits merely validate what the company spend reports say is actually being spent.   While that “audit” is important, it doesn’t always tell the story that needs to be told.  Some accounting firms advise their clients that the “audit” results confirm that the logistics spend is within an acceptable percentage of total sales for the business in question.  But does the audit enable them to advise their clients on exactly what they should be paying based on what the market conditions are at the time of the audit?  Probably not! 

Resource: Learn how auditing works!

In other words, a true evaluation audit would be based on providing a strong benchmark analysis comparing the company’s actual logistics spend stats with a deep dive into many different areas including, analyzing all of the client’s service provider and carrier contracts; evaluating the contract terms and condition language for any anomalies, along with a comprehensive analysis of the specific pricing provisions, including current service provider discounts and incentives and any rebate arrangements, etc.  But, more importantly the audit must always include a true a comprehensive benchmark analysis of similar competitor businesses, as well as all current service options to evaluate if better service and lower cost options are available.   

Here are some facts every company should be aware of:

Fact: All transportation and logistics service providers publish rates, rules, and fees INDIVIDUALLY! 

Again, the true value of any audit is the ability to benchmark what a particular company is spending and provide advice to that client on what they actually should be paying.  The only way this can be accomplished is if an audit consultant is utilized that has access to logistics and supply chain data that is collected from dozens of competing businesses covering literally millions of actual transactions.  This is the best possible process allowing the audit consultant to provide the information required to make a meaningful analysis of a client’s logistics and supply chain spend.

Fact: No two transportation and logistics service providers publish the Same Rates, Fees and Charges!

No two companies are alike and no two rates, fees or accessorial charges are the same.  It shoud be the job of the audit consultant to have a complete understanding of the rate structures of each transportation and logistics service provider used by the company and find the right fit for each client.  Whether it’s international deliveries, large size parcels or something unique, there is a “right” service provider, or service providers for every company.  Knowing the strengths and weaknesses of the service provders enables the audit consultant to match a company’s business with the right shipping organization to maximize efficiencies, take advantage of savings and finally, truly manage cost structures.

Fact: Most transportation and logistics service providers play the Discount Game!

Some transportation and logistics service providers may be better than others in terms of service and pricing.  Knowing a company’s specific shipping patterns provides the information and  leverage needed to negotiate the best rates and services for every business.  Identifying that supplier and playing to their strengths by providing them with the comprehensive shipping information leads to lower costs and greater operational agility.

Fact: Simply put, Shippers are being charged Whatever the Service Provider Thinks They Can Get them to Pay!

For many shippers, if they think they are getting the best price and service, think again, that is unless of course they have completed this Comprehensive Benchmark Analysis.  Without this Benchmark Analysis, negotiating on their own will get a company the lowest price the shipping company believes it will take to get the business.  Some shippers may be happy with that price, but it does not mean it is the best price in the current ever-changing marketplace.  It’s perhaps the best price, but in A SINGLE COMPANY MARKET.

Good information is important!  All the information is critical! Knowing a company’s “true” needs and the needs of transportation and logistics service providers gives the audit consultant access to all the information, enabling them to evaluate all current contracts and to provide advice on obtaining the ability to receive operational improvements and cost optimization at the same time.

Resource: Check out this video to learn more about how the transportation and logistics industry has changed over the years.

Fact: Almost Everything is negotiable.  You just need to know what is the Best Deal available and how to get it.

At ICC, we make money by saving our client’s money.  We negotiate the BEST DEAL for every client based on our 45+ years of industry experience, our consulting expertise in the field and access to all of the most relevant information and resources.  Our clients make even more money because the BEST DEAL provides VALUE to their business in the form of efficient, effective, reliable service at the lowest possible cost.

Resource: Learn more about how we partner with our clients to help them achieve their goals.

Give us a call today and start getting the BEST DEAL tomorrow.