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Important Developments Alert: UPS/Teamsters

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To ensure our readers and followers have the most current information regarding the UPS/Teamster Labor Negotiations, we are providing some important developments this week following the article that we released on Monday, June 19, 2023. Given that there are only 38 days until the expiration of the current UPS/Teamsters contract, we felt that it was important to release this information immediately, and will continue to do so as these negotiations are on-going..

First, on Tuesday the Teamsters announced that they had reached a tentative agreement with UPS on ALLl non-economic issues. Their communication quoted Teamster’s General Secretary-Treasurer Fred Zuckerman as saying that “we have reached tentative agreement on well over 40 non-economic issues that affect all our members at UPS, and we did it as a team. The Teamsters haven’t sacrificed a single concession in these negotiations.”

This was good news for the overall negotiations. However, as stated in our last article, the most difficult issues now need to be addressed. Namely, the economic issues which include wages, benefits, and the Two-Tiered Driver classification system UPS currently employs. 

Our article had predicted that the Teamsters wage and benefit proposal would likely be aggressive, given the stance they have taken related to recent UPS profitability. The Teamsters have been consistent in their messaging, stating that they are looking for their UPS members to share in the profits and success of the company.

Well, it looks like our prediction might have come true. On Wednesday, the Teamsters National Negotiating Committee shared its full economic package with UPS- calling it “…. The biggest, most lucrative financial proposal ever presented by a labor union.” 

Although specifics were not shared, the Teamsters identified priorities as wage increases each year of the contract for everyone, catch-up raises for part-timers, additional holidays and more paid time off, pension increases, protection and enhancement of existing health and welfare benefits, the complete elimination of the two-tier 22.4 job classification for drivers, and more full time jobs created over the next five years. 

As stated, there were no specific details provided related to the Teamsters demands. But, the statements made so far make it easy to speculate that the requested wage increases will be record breaking (as predicted in our last article). All in all, these demands will undoubtedly be extremely costly for UPS (and ultimately costly for all shippers). 

Late on Thursday, the Teamsters communicated some startling news to their members. They stated that “UPS executives gave the Teamsters National Negotiating Committee an appalling economic counterproposal…” They suggested that the proposal included minimal raises and overall wage cuts to workers’ cost-of-living adjustments. 

According to the communication, the Teamsters unanimously rejected the “disrespectful proposal.” It went on to say that “The Teamsters National Negotiating Committee told UPS they will not meet again until the company makes a realistic and respectful economic offer.” 

Teamster General Secretary-Treasurer Fred Zuckerman made the following statement.  “UPS is well aware that the ball is now in their court. We are not messing around here. If they want to see the Teamsters back at the bargaining table any time soon, UPS has got to get serious fast.” He went on to say that “The Teamsters are not trading for anything. And we are not accepting whatever crumbs these executives might throw our way. UPS has made plenty of money. Our members have sacrificed everything to make them rich. We are demanding a real offer right now.”

Teamsters General President Sean O’Brien provided an ominous warning, he said “… if UPS wants to negotiate a contract for 1997 working conditions, they’re going to get 1997 consequences.” (referencing the last time that the UPS-Teamsters went on strike). 

So, it appears that our earlier statements related to the situation are quite accurate- THE TEAMSTERS AND UPS HAVE A LONG WAY TO GO WITH THESE NEGOTIATIONS.” 

Given the fact that the Teamsters have held their position that they will not provide any concessions in these negotiations, it is hard to see how UPS will come out of this process unscathed. The Teamsters have consistently publicized the fact that they are ready to strike if they do not get what they want (and think they deserve).

So it appears that UPS might have its back up against the wall. 

We will continue to closely monitor the situation, and report on major developments as they occur. So, stay tuned. It would also be wise to start looking at your budgets for 2024 and to start making plans for what could be the largest Transportation cost increases your companies have ever seen. The time is now to develop a strategy to help combat out of control shipping costs. We would love to be part of that strategy, so please don’t hesitate to reach out to us now so you are well positioned for next year.

Latest UPS-Teamsters Update

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The UPS Teamster official countdown clock read 42 Days, 13 hours and 58 minutes until the expiration of their contract with UPS, at the time that we started to write this article. It has been well publicized that the Teamsters intend to strike if an agreement is not reached by midnight of July 31st, 2023. Based on the information that has been released by both sides, there still appears to be a long way to go. There are some major issues that have yet to be addressed.

On 06/13/23, UPS provided an update on their website that announced that UPS and the Teamsters had reached an agreement related to Heat Safety. This is one of the main issues that the Teamsters had brought to the negotiating table. Teamster leadership had made a similar announcement to their membership ranks the day before. 

This should not come as a surprise to anyone, given the bad press that UPS received last summer when a UPS Driver in California died from Heat Stroke while out on his route. Following this incident, there was a flurry of news stories and articles that came out, which shed a light on the challenges that UPS Drivers faced due to the heat and lack of cooling systems in UPS vehicles. 

So, at the end of the day, one would not expect agreement on this issue to be too difficult. It was pretty obvious that this needed to be fixed!  According to announcements made by UPS and the Teamsters, there will be fans installed in all delivery vehicles immediately following contract ratification. Additionally, UPS has committed to equip all newly purchased U.S. small package delivery vehicles with air conditioning starting January 1, 2024.

Other news coming from these negotiations that came as no surprise was that the Teamsters overwhelmingly approved their strike authorization. This is a process that unions often use to build leverage in the negotiations.  A strike authorization vote does not necessarily mean a strike is imminent, but is a way for a union to add pressure and send a message that membership is willing to strike if negotiations are not met. 

There was no doubt that UPS Teamster membership would  vote “Yes” to authorize a strike.  Before the vote was finalized the UPS website stated that “…the Teamsters asked their UPS members to participate in a strike authorization vote—a routine part of the bargaining process—which voting members will overwhelmingly approve. “

So, now we have begun to see news releases made by the Teamsters that hype their unity and memberships willingness to strike. Once again, designed to create leverage in the process. The sad thing about this process is that besides creating leverage against the company, it also creates more anxiety for shippers. There are many companies that will see the press about the approval of a Strike by UPS Teamsters, and will misinterpret the news. 

Some may think that this means that there is going to be a strike. Others might see this as a sign that things are not going well in the negotiations, and cause them to consider moving volume away from UPS. So, this process could just lead to more volume bleed for UPS. Packages will move to non-union carriers, and may never come back. 

Although there has not been any agreement on major economic issues, The Teamsters and UPS have both expressed satisfaction with progress being made in the negotiations. Teamster General President Sean M. O’Brien said that “We’re up to 43 total non-economic changes that have already been made to the UPS Teamsters National Master Agreement. This is an extraordinary number of tentative agreements reached and language changed at this stage of negotiations.” The UPS website has also indicated satisfaction with progress being made. 

But to us, the 800 lbs. Gorilla in the room is the main economic elements of the negotiations. It appears that there have not been any discussions related to wages/ benefits, or the two tiered driver classifications that the Teamsters are strongly opposed to. Both of these items could be extremely costly for UPS. 

The Teamsters have stated over and over again, that they expect to benefit from the record profits that UPS has seen in recent years. So, what will they be expecting in the form of wage and benefit increases? Will they expect UPS to fully eliminate the two tiered Driver classification scenario? The Teamsters have also stated that they will not agree to any concessions in these negotiations, and are claiming that they have not done so up until this point. 

Given this, one should expect that the Teamsters will be seeking record level wage increases to be in line with the record profits that UPS has seen. Based on the Teamsters approach to these negotiations, there will likely be some serious demands made, with no give backs. So, the discussion over the coming days and weeks will be the most difficult by far. Far more difficult than the issues that have been settled. 

At the end of the day, UPS may be forced to agree to the largest wage increases they have ever awarded. On top of this, UPS has agreed to many issues that will be costly for them (Air Conditioning and Fans in package cars etc.)  The unfortunate part of this, is that the ones most likely impacted by this will be the shipper. 

The UPS GRI was the highest that it’s ever been this year at 6.9%. With all of the added expense that UPS is going to incur, it is possible that shippers should be prepared for more records to be broken. Of course UPS can try to offset the cost of higher wages through the use of technology and automation. However, this can be costly also, especially in the short term. On top of this, UPS has already agreed to increased scrutiny on the use of technology. 

One of the new agreements states that UPS would be required to negotiate with the Teamsters at least 45 days before it introduces certain technology such as drones, driverless vehicles etc. The Teamsters are actively opposed to any technology that is going to eliminate Teamster jobs. So, this will make it harder for UPS to find ways to reduce costs. This means only one thing- higher rates!

So, I think we can all see where this is going. We cannot stress enough the importance of planning for the large increases that are sure to come. Failure to gain control of these spiraling costs will have a major impact on bottom lines. Don’t wait until it’s too late. Give us a call now to get ahead of the record level rate increases that we are predicting for 2024! 

 

Labor Action Shuts Down West Coast Ports

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Today, members of the ILWU have staged a “no show” that has effectively shut down many West Coast ports, including Los Angeles and Long Beach, Oakland, Tacoma, Seattle, and Hueneme. At this moment, no one knows when normal operations will resume.

Multiple media reports are also warning that more port shutdowns are expected to spread along the West Cost, as workers are refusing to report for assignments due to the unending ILWU-PMA contract negotiations, which have been on-going since last May.

Due to the potentially chaotic situation, we are recommending that all importers to, wherever possible, route their goods through East and Gulf Coast ports until this situation is completely resolved.

If you need help with navigating these changes, please reach out to us.

USPS Resumption Notice

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International Service Resumption Notice – effective June 2, 2023

Effective Friday, June 2, 2023, the Postal Service™ will resume acceptance of mail destined to the following:

Libya

This service resumption affects the following mail classes: Priority Mail International® (PMI), First-Class Mail International® (FCMI), First-Class Package International Service® (FCPIS®), International Priority Airmail® (IPA®), 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.

Please visit our International Service Alerts page for the most up to date information: https://about.usps.com/newsroom/service-alerts/international/?utm_source=residential&utm_medium=link&utm_campaign=res_to_intl

International Service Suspension Notice – effective June 2, 2023

Effective June 2, 2023, the Postal Service™ will temporarily suspend international mail acceptance to destinations where transportation is unavailable due to widespread cancellations and restrictions into the area.

Customers are asked to refrain from mailing items addressed to the following country, until further notice:

Myanmar

This service disruption affects Priority Mail Express International® (PMEI), Priority Mail International® (PMI), First-Class Mail International® (FCMI), First-Class Package International Service® (FCPIS®), International Priority Airmail® (IPA®), and M-Bag® items.

Unless otherwise noted, service suspensions to a particular country do not affect delivery of military and diplomatic mail.

For already deposited items, other than Global Express Guarantee® (GXG®), Postal Service International Service Center (ISC) employees will endorse the items as “Mail Service Suspended — Return to Sender” and then place them in the mail stream for return.

According to DMM 604.9.2.3, customers are entitled to a full refund of their postage costs when service to the country of destination is suspended. The detailed procedures to obtain refunds for Retail Postage, eVS, PC Postage, and BMEU entered mail can be found through the following link: https://postalpro.usps.com/international-refunds

Breaking: UPS-Teamsters Update

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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

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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.