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Your UPS-Teamsters Update

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At the time we started writing this article, the official on-line Teamster countdown clock indicated that there were 61 Days, 9 hours, 32, minutes and 8 seconds until the UPS Teamster Contract expires. This seems like a very short period of time to hammer out an agreement since there are some contentious issues that have yet to be ironed out.  

Both UPS and the Teamsters have communicated internally and externally that they have made good progress on key issues. However, based on what we have seen and heard, there are still many impactful issues that have not been addressed or settled.  Here are the main issues that the Teamsters identified early on in the negotiations (detailed in the article that we released on April 19th, 2023)

  1. 22.4 Drivers (two Tiered Driver structure that exists at UPS today. 22.4 Drivers receive less pay and benefits compared to regular drivers.) Teamsters are calling for an end to this. 
  2. Wages– Teamster members are looking for improved wages, especially for Part Timers.
  3. Excessive Overtime– the Teamsters are looking for a reduction in overtime that UPS Teamsters are forced to work. 
  4. Inward Facing Camera’s/ Harassment– the Teamsters have opposed the use of technology by UPS that they consider to be an invasion of privacy. 
  5. Workforce Investment– the Teamsters are pushing UPS to create more Full Time jobs for Part Time workers, and invest more in employee pension plans.
  6. PVD’s- Personal Vehicle Drivers– the Teamsters are pushing for the elimination of these outside contractors which takeaway work from them.
  7. Subcontracting- They are calling for a reduction/elimination of subcontractors for UPS Trailer moves.
  8. Martin Luther King Day/ Juneteenth– the Teamsters are pushing to make these paid days off for their members.

As we expected, UPS Leadership has released few details regarding progress that has been made. On May 26th, “The UPS website stated, “We made good progress on key issues at the bargaining table this week. We reached agreement on several important issues for the Teamsters, our employees and UPS—including operating priorities, the use of technology and in-vehicle cameras—and advanced discussions on many other topics.”

Messaging from the Teamsters was similar. A communication to Teamster members on May 24th said that “Teamster committee members achieved tentative changes to the contract around language governing UPS’ implementation of invasive technology.” 

On May 26th, the Teamsters communicated their intent to push back on efforts by UPS to implement technology or automation that could impact Teamster jobs. An internal communication to members stated that “… our union will do everything in its power to make sure this corporation is not surveilling our members, not replacing package car drivers with drones and AV’s, and never disrespecting the sacrifices Teamsters and their families make with their labor to keep this company successful.” 

So based on information released from both sides, it is creating the appearance that the only major category that the two sides have made notable progress on is the use of technology/ surveillance cameras. We have not seen or heard anything about agreement on the most contentious issues including Wages, and the Two-Tiered Driver scenario, and outsourcing of work (PVD’s and Trailer Driver subcontracting). 

It appears that initial discussions regarding the outsourcing of work are not going well. On May 23rd, the Teamsters communicated to their members that “The Teamsters spent hours throughout the day repeatedly pushing back on attempts by UPS to maintain the status quo or weaken worker protections around its SurePost program.”

For those that are not familiar- UPS SurePost is a contractual service in which packages are picked up and moved through the UPS network, and then handed over to the USPS for delivery to the customer. So in essence, the final mile delivery is outsourced to the Post Office. This service is typically less costly than UPS Ground Service, and is used by Retailers/ E-Commerce companies as a cost effective way to ship packages. 

There is an Article in the UPS-Teamster National Master Agreement that outlines UPS’s eligibility to ship smaller packages of specific weight and size via USPS. 

So, obviously this service creates concern with the Teamsters, since they feel that it takes away union jobs. The Teamsters stated in their internal communication that “We will ensure that SurePost doesn’t hurt union work. We will make sure UPS is never allowed to unilaterally implement technology that diminishes Teamster jobs.” 

This Teamster communication suggests that the two sides are far apart regarding the outsourcing of work. UPS seems to be looking for more flexibility with the use of this service, while the Teamsters are looking to put more of these SurePost packages on union package cars.  So, one would expect that discussions related to the use of PVD’s and Trailer Driver subcontracting to be equally as challenging. 

Negotiations for wages should be extremely challenging as well. The Teamsters have been very vocal about the profits that UPS has seen in recent years. They have continually stressed the “Pandemic Profit” that UPS enjoyed ($26 Billion).  They informed their membership that “Tens of millions were given directly to the CEO, with millions more in lavish stock awards. $8.6 billion on stock buybacks alone in 2022, with billions set aside for this year.” 

So, the Teamsters are intent on “earning their fair share.” They are asking for higher wages, more union jobs, and a decrease in the use of technology that reduces the reliance on union labor. They have also stated that they are not willing to make any concessions in these negotiations.

This can only mean one thing for shippers, be prepared for costs to continue to climb!

On May 26th, The Teamsters did release a communication that created some hope that these negotiations could be concluded on-time. They stated that “Major progress has already been achieved at the bargaining table after fewer than 10 rounds in national negotiations. There’s a lot of road left to cover, but if there’s one thing Teamsters are damn good at, it’s getting to their destination.” 

In the meantime, the Teamsters countdown clock continues to tick-  Now at 61 Days, 7 hours, 33 minutes and 45 seconds- Tick, Tick Tick…….

Hopefully, the Teamsters route to their destination doesn’t include a multi-car pile-up (work stoppage)! Stay tuned for continued /meaningful updates to this situation. Or feel free to reach out to us directly to discuss this further, or to find out how to prepare for the potential for more record breaking carrier increases!

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! 

 

UPS/Teamsters: Negotiations Have Begun!

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We’re supplying you with the information you won’t find anywhere else!

In our last article, we reported that the Teamsters union had informed UPS Leadership that they were unwilling to kick-off National Negotiations that were planned for 04-17-23 until all Supplemental Negotiations were complete. At that point only 10 of the 40 Supplemental Agreements had been finalized. 

According to internal Teamsters communications, “last week began with UPS refusing to make proposals, but ended with “panicked phone calls from company negotiators after the Teamsters announced there will be no national negotiations until supplements are resolved…” The internal communications went on to say that “The hardline approach pushed two supplements- The Michigan Rider, and the Local 243 and Metro Detroit Agreement- to reach full tentative agreements.” This still leaves 28 of the 40 Supplements open.
So, we were interested to see if the Teamsters would show up in Washington, DC this past Monday.  The company had released a statement on their website, indicating that they would be there as planned, and would be prepared to negotiate the National and Supplemental agreements at that point. 

On the positive side of things, the Teamsters National Negotiating Committee, including rank and file members and representatives of all supplemental negotiating committees, were present in Washington, DC on the 17th. However, the tone that they set might have had some UPS Leaders wishing that they had not. 

According to the Teamsters, UPS provided it’s opening statement through a PowerPoint presentation, while they presented a video testimonial from members nationwide “sharing their trials and tribulations working at UPS”. This was an interesting approach as it personalized the impact of the main negotiables that the Teamsters are demanding. 

Below is a list of the demands that the Teamsters are making, along with the message that the video attempted to deliver. 

Wages– Teamster members are looking for improved wages, especially for Part Timers. Comments in the video from Teamster General President, Sean O’Brien, and General Secretary-Treasurer, Fred Zuckerman revolved around the increased profitability and stock price that the company has seen since the last contract negotiations in 2018 (both of which have doubled). Zuckerman commented that “Teamsters at UPS can’t just survive, they need to thrive, just like the company.”

22.4 Drivers- This is the two tiered Driver category that currently exists at UPS. 22.4 Drivers are paid much less, and don’t receive the same benefits as other UPS Drivers. Several 22.4 Drivers in the video expressed concern that they are being unfairly treated, and called for the elimination of this two tiered system. 

Excessive Overtime- The video featured multiple Drivers complaining how they have been forced to work 6 days per week, and how this impacts their health and family life. One driver described how he has been forced to work 6 days per week since November of 2019. Some described it as “The Peak Season that never stopped”. The fact that UPS is still charging for Peak Surcharges suggests that this could be an accurate description. 

Inward Facing Camera’s/ Harassment- Several UPS Drivers explained their opposition to the use of inward facing camera’s in their vehicles. They suggested that UPS already has significant technology in place that allows them to monitor their performance and activity including; GPS, Telematics, and their DIAD board. Some felt that using these cameras could be used improperly to harass drivers, and would be an invasion of privacy.

Workforce Investment- UPS employees stressed the need to create more Full Time jobs for Part Time workers. They also indicated that the company needs to contribute more to Pensions and to ensure Pension stability.  Other employees stressed the need for the company to invest in ways to protect workers from extreme heat. One driver described how he had experienced Heat Stroke, which required a hospital visit. 

PVD’s- Personal Vehicle Drivers– UPS employees described how the use of these drivers during peak season, takes work away from regular/ Teamster drivers. Some described situations in which there was not enough work for Regular drivers and they were sent home, while PVD’s were still working. They also suggested that PVD’s do sloppy work, and make the company and their drivers look bad. 

Subcontracting- UPS Trailer drivers complained that the company is using more Subcontractors than they need to, and that work is being taken away from Teamster Drivers. They are calling for a reduction/ elimination of subcontractors for UPS Trailer moves.

Martin Luther King Day/ Juneteenth– Several UPS employees stressed that UPS should fully recognize these holidays by adding these as paid holidays for workers. Comments made from employees suggested that UPS is big on promoting diversity, but they need to put their money where their mouth is.

Obviously, all of these items would come at a cost to UPS, some of them being significant. UPS Leadership has indicated that the two sides are not far apart, and that an agreement should be easy to reach in advance of the July 31st deadline.  So, it will be interesting to see how much the company is willing or able to give up. 

At the opening of these negotiations, Teamster leadership suggested that there is little wiggle room from their perspective. President, Sean O’Brien stated “We don’t work for this company. We work for our members. It’s not Wall Street that concerns us, it’s Main Street.  We are not going to negotiate a contract that is cost neutral or with concessions. We are going to push this company and its management harder than they’ve ever worked before, and for the first time you’re going to face a productivity standard. We have 12 weeks until this current contract expires. Let’s get to work.” 

So, obviously there is a great deal of work to do in a short period of time. Therefore, it is imperative to monitor this situation for ongoing/ meaningful developments. As previously committed, ICC Logistics will continue to monitor this situation, and provide updates to ensure that our clients and followers are duly informed.

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.  

New Postal Product: Ground Advantage

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As part of its overall strategy to enhance its shipping offerings, the United States Postal Service (USPS) filed a procedural filing with the Postal Regulatory Commission (PRC) notifying the commission of the Postal Service’s intention to replace its existing First-Class Package Service category with USPS Ground Advantage. USPS Ground Advantage will feature two-to five day service standards for packages up to 70 pounds.

The filing streamlines and simplifies package shipping options for customers and enhances the Postal Service’s ground product offering with the anticipated summer 2023 launch of this improved ground product.

In the filing, the Postal Service is notifying the Commission of its intent to rename the First-Class Package Service product and introduce the Postal Service’s enhanced ground product — USPS Ground Advantage. USPS Retail Ground, Parcel Select Ground, and First-Class Package Service will be incorporated into USPS Ground Advantage.

Over the past year, the Postal Service has focused on improving its package offerings by improving service reliability, lowering prices, and simplifying shipping product offerings, including:

  • Lower Prices for Shipping Services. In January 2022, the Postal Service implemented new pricing for Shipping Services. As a result of the implementation of approved price changes, shipping rates for USPS Retail Ground products were reduced by 7 percent, and rates for Parcel Select Ground were reduced by 12 percent, on average. USPS Retail Ground and Parcel Select Ground prices remain at the lowered, January 2022 rates.
  • Improved Reliability Through Upgraded Service Standards. In August 2022, the Postal Service implemented upgraded service standards for its USPS Retail Ground and Parcel Select Ground products, aligning service standards with the current First-Class Package Service product within the contiguous United States. Service standards for these products were accelerated from two-to-eight-days to two-to-five-days for the same affordable price.
  • Simplifying Shipping Product Offerings. On October 28, 2022, the Postal Service was granted approval by the PRC to remove USPS Retail Ground from the Competitive product list, eliminate Parcel Select Ground from the Parcel Select product, and expand First Class Package Service to 70lbs among other enhancements.

Clearly USPS is continuing its efforts to compete head on with UPS and FedEx for Ground package services. With a possible work stoppage at UPS this summer, this new service and previous lower price offerings might be just what the doctor ordered.

Need help navigating this change or looking to get a hold of your shipping expenses?  Reach out to one of our parcel experts today to help.