UPS Teamsters Negotiations Begin

Let the Games Begin- Knives Out!

On January 3rd, 2023, we published an article that described the challenges that shippers will face this year due to the upcoming UPS/ Teamsters Contract negotiations, (the agreement expires on July 31st, 2023). Our article provided some history and insight regarding how shippers will experience anxiety and risk this year, due to the contentious relationship that has developed between the Teamsters and UPS. Our article suggested that these negotiations will be “Loud & Late”, and that there would be a great deal of saber rattling. Well it looks like the predictions that we made have come to fruition very quickly!

On January 9th, 2023, the Teamster Leadership team kicked off a National Screening Committee meeting in Washington, DC to review proposals for the National Master Agreement negotiations. The committee was tasked with reviewing more than 4,000 pages of national proposals submitted by locals to the Package Division. In total, the Division received more than 11,000 Master Agreement proposals.

There were some very fiery and aggressive statements made during this kick-off meeting; 

“We’re going into these negotiations with a clear message to UPS that we’re not going past August 1,” stated Teamster President, Sean O’Brien in his remarks to the committee. “We have to deal with 22.4s, PVDs, subcontracting, part-time wages and other issues that we’re taking a hard line on with the company.” 

General Secretary-Treasurer Fred Zuckerman stated that “Sean is going to pick a fight with this company, and that fight is to get the very best contract we can get for our members. This contract is going to be unlike the contracts of the past 25 years where UPS comes in and says they want a cost-neutral contract. It’s not going to be a cost-neutral contract. We’re going to take from them what our members deserve.” 

However, UPS CEO Carol B. Tomé, who will be sitting in on her first contract negotiation, has said she expects the agreement to yield mutual benefits. Which helps to solidify the fact that the two parties are approaching these negotiations with very different expectations. 

The teamsters have also publicly stated that they have amassed a $350 million strike fund and shortened the time it takes for members to receive a payout from eight days to one. President Sean O’Brien has stated that “That’s some pretty good leverage. So, obviously the Teamster leadership has remained consistent in their promises to take a hard stance against UPS with their new agreement.  

UPS leadership has not made many public statements about these negotiations up until this point. Besides the comments listed above, Carole Tome stated on the company’s July 26th earnings call, that “We’re going to leave the negotiations at the bargaining table,” according to a transcript from Sentieo. 

She has also suggested that UPS Teamsters already receive better compensation than the rest of the delivery workforce. 

“Our workforce is very different than a lot of the workforces that you hear in the media every day that are trying to be organized. They’re not paid the way that our Teamsters are paid. These are great jobs that we value very much,” she said.

Based on the way that UPS has handled communications related to UPS Teamster Contracts in the past, we don’t expect to see a lot of public statements being made by UPS Leadership as these negotiations progress. UPS has historically chosen to keep customers updated about labor negotiations through direct contact from their management team. Typically, these communications are strictly verbal, which makes it harder for shippers to share details of the negotiation process with others in their organization. So, this will only add to the anxiety that UPS customers will be facing during these negotiating sessions. 

So, given the expectation that Teamsters leadership will continue to threaten and publicize their fight with UPS, while UPS leadership will limit their public comments, it will be extremely important for shippers to develop ways to obtain accurate and up to date information about the progress of these negotiations. Therefore, the ICC Logistics Services team is committed to staying close to this situation to ensure that we provide the most accurate and up to date information possible.

 

We will utilize our long term experience, expertise, unique insight and resources to provide timely and meaningful updates to our customers and followers. Don’t hesitate to reach out to ICC Logistics for questions related to this, or for help with any of your other Logistics needs! 

Delayed Orders Are on the Rise

“Your order has been delayed.” These are 5 words that e-commerce consumers hate to hear or see!

Anyone that has ever experienced a delay in receiving something they ordered knows how frustrating this can be. Unfortunately, in todays challenged Supply Chain environment, delays have become all too common.

There are a large variety of things contributing to a spike in the time it is taking for consumers to receive their orders these days. These include challenges with obtaining raw materials, Covid driven shut downs, worker shortages, Port congestion, cost reduction efforts, along with Carrier capacity issues to name just a few.

Given the wide range of supply chain challenges, shippers are left wondering what they can do to minimize the pain, suffering and anxiety that their customers are feeling due to the uncertainty that exists in the world.  After all you can only control what is controllable.

So what are the controllable factors that a shipper should consider to help drive customer loyalty?

  1. Honesty- It is extremely important to always be honest and upfront with customers. For example; If you don’t have the item in stock and can’t provide delivery to the customer within a reasonable amount of time, don’t take the order. Or at the very least, let the customer know when they can expect delivery prior to check-out, and allow them to decide if they can wait.

There is nothing worse than allowing a customer to use their valuable time to enter an order, only to receive later notification that the order could not be fulfilled.  This can contribute to customers losing trust in your company/brand.

It is important that shippers are honest with customers throughout the purchase and post purchase process. After all, Honesty builds Trust, Trust builds Loyalty, and Loyalty leads to more Sales!

  1. Communication- Once you have the order, it is now up to your Fulfillment operation and Carriers to get the order moving and delivered within the expected time frame. Unfortunately, these two things are not completely controllable. So, the bottom line is that you need to have a solid communication process in place, to inform your customer of these unanticipated delays.

As mentioned above, customers hate hearing that their order has been delayed. However, they hate not hearing anything even more! There is nothing worse than having a customer reach out to you proactively with a “Where is my order” called a (WISMO call). Having an order delayed without explanation or notification to the customer, it is like rubbing salt in a wound.

Shippers should consider implementing an internal process that notifies customers when there are delays prior to shipping. If/ when this occurs, the customer should be quickly notified. A simple email that informs the customer of the unanticipated delay will take a lot of pain out of the process. The message should be honest, apologetic, but upbeat. For example, the message could read:

“Sorry, but we were caught off guard with the popularity of our products. This has caused a delay in our ability to ship your order today. We know that you are excited about receiving your order, so our operations team is making every effort to get this shipped ASAP. We apologize for this delay, and are committed to insuring there are no further delays. Once again we apologize for any inconvenience and disappointment that this is causing for you. “

Or

“We tried our best to get your order out today, however we were not able to do so. We have prioritized your order and have confirmed that it will go out tomorrow. We know that you are anxious to receive our product, so we apologize for the frustration this may cause. Please be assured that we value your business and are equally disappointed that we could not get it shipped today.”

Similarly, Shippers need to have a process in place to inform customers when there are carrier driven delays. It is important for shippers to differentiate between Fulfillment vs Carrier delays. It has become somewhat of a common practice for shippers to point all delays towards their Carriers. Shippers often provide a tracking number to a customer even before the order has left their Distribution Center. So, customers often assume that all delays are due to carrier issues.

This is a great way to deflect away from your company. However, this could be equally damaging to the customer’s perception of your company/ brand. Customers are a lot more savvy these days. So, when they track a package in a carrier’s system and only see a “Label Created” event, it is likely that they will know that the shipper has not handed the package over to the carrier. So, failing to be honest regarding the nature of the delay, could be just as damaging as the delay itself. Furthermore, if the blame for delays is always passed onto the carrier, customers will be left thinking “Why do they use this carrier if there are constant delays?”

Implementing notifications for carrier delays should be an easy lift for most shippers if they are using the larger Integrated Carriers like FedEx and UPS. Both of these companies have off the shelf proactive notification products that are fairly easy to implement. Additionally, for shippers using a variety of carriers, regional carriers, or the USPS, there are a host of Post Purchase technology companies that can provide visibility and pro-active notification services. So, either way, it should be fairly simple to engage a process to inform customers when there are carrier delays. The cost to implement these processes often pays for itself due to the reduction of cost associated with the reduction in WISMO calls that this will drive.

When properly implemented, your customer will automatically receive notification of delays directly from your carriers. However, as an added step you may want to consider sending a direct communication from your company to acknowledge the issue and assure the customer that you are working on it. An email might read as follows;

“We notice that your order has been delayed due to an issue with our Carrier. Please be assured that we are working with them to help minimize this delay. We value your business and are committed to providing timely delivery for all of your orders. We apologize for the inconvenience that this may cause for you.”

  1. Choice – let’s face it. There are a lot of choices to make in the Supply Chain and Logistics world to help control the controllable. Shippers need to choose the right Fulfillment options, Carriers, and Technology to insure that they minimize issues. Shippers need to make the right decisions to help drive a best in class customer experience.

Questions that need to be answered include;

-Should we insource or outsource our Fulfillment operations?

-If outsourcing, who should we use?

-Where should our Distribution Center(s) be located?

-What carriers can contribute to the best customer experience?

-What technology should we use to help drive a best in class customer experience?

-How will we measure the effectiveness of the choices that we have made?

Surveys have shown that a negative customer experience is the reason 86% of consumers quit doing business with a company, and that good customer experiences lead 42% of consumers to purchase again. So it is imperative that shippers make the right decisions to minimize problems, and to have the right processes in place when problems do occur.

We know that making the right decisions can be a daunting task for shippers given the complex web of companies that exist in the Supply Chain & Logistics space. Thankfully there are companies that have a great deal of experience and insight that can help shippers make the right choices.

Please reach out to ICC Logistics to find out how we can help drive a successful Customer growth and acquisition strategy, and contribute to your company’s success.

 

FedEx Truck Drivers Furloughed!!??

For years now we have heard about a truck driver shortage, so to hear from FreightWaves that FedEx Freight, the less-than-truckload arm of FedEx Corp. and the nation’s largest LTL carrier, is reporting it will furlough an undetermined number of drivers starting in early December, is a staggering commentary.

So if anyone has any doubts about an impending business slow down, AKA recession, here is all the proof you will need.   

According to FedEx, the furloughs are scheduled to last about 90 days, during which time affected workers will continue to receive health benefits and will be allowed to file for unemployment benefits in their respective states of residence. Some eligible employees will be offered permanent transfer opportunities to other markets that have hiring needs, the unit said in a statement.

The furloughs are expected to affect a small number of drivers, and not all facilities will be targeted, said Miranda Yarbro, a FedEx Freight spokesperson. The furloughs will be voluntary, Yarbro added.

“Because of our previous experience with furlough and with the incentives we are offering, we are expecting employees to volunteer to meet the business need,” Yarbro said in an email.

The unit employs about 45,000 people. It was not immediately clear how many drivers it employs.

The action was taken in response to slowing macroeconomic conditions that have impacted LTL demand in recent weeks, the unit said. The LTL segment, which has shown very strong growth coming out of the pandemic, has seen volumes level off recently due to economic uncertainty caused by high inflation and recession concerns.

FedEx Freight has been the best performer of FedEx’s (NYSE: FDX) three transport business units. Its two larger units, FedEx Express and FedEx Ground, have been hurt by high costs and slower-than-expected demand. FedEx Freight, by contrast, has focused on profitable growth and has been willing to shed unprofitable tonnage to achieve that goal.

In its fiscal 2023 first quarter, which ended Aug. 31, FedEx Freight’s operating income increased 67%. The gains were driven by actions to improve shipment yields, as well as the positive impact of higher fuel surcharges, the parent reported.

So if the freight division, FedEx’s best performing division is having financial difficulties, just think of the impact it could have on FedEx’s overall operating revenues.

Need help navigating what’s to come? Don’t hesitate to reach out to us. We’re here for you every step of the way.