Update: UPS/Teamsters Talks Stall

The UPS Teamsters negotiations took a turn for the worse this week.

We had been encouraged by the progress being made.

Both UPS and the Teamsters had indicated that they had reached tentative agreement on three economic issues. However, talks came to a screeching halt early on July 5th, following a marathon negotiating session. The Teamsters had indicated that they needed to have a last, best final offer by July 5th, to have time to put the proposed contract forward for its members to ratify before the agreement expiration (July 31st). 

So, the big question is what happened?

Both parties have acknowledged that they have come to terms on 55 key issues. However, as we had predicted in the past, the two sides are far apart on wages. Based on comments being made by Teamster Leadership, it seems that Part Time wages is the big sticking point. A majority of UPS Employees are part time. 

It appears that the Teamsters union is looking to use the UPS negotiations as a rallying cry for the struggle of all Part-Time workers in the US. In an internal communication to UPS Teamster members they used the tag line “At UPS, and in the U.S., Part-Time Poverty Doesn’t work”. A statement in the communication by Teamsters General President Sean M. O’Brien stated “It’s a déjà vu maneuver for UPS who should know since 1997 that part-time poverty isn’t working for America.” 

On Thursday AM, O’Brien provided told CNN that There’s no doubt that UPS full-timers make good wages, good benefits,” O’Brien said. “Those trucks don’t go out unless they are loaded and our part-timers are the unsung heroes. They are working for poverty wages and we need to drive up those starting rates of pay.”

On-line reports that we have reviewed indicated that a UPS spokesperson disclosed that part-timers at UPS make an average wage of $20 per hour after 30 days of employment and receive healthcare benefits and pensions. We are certain that there are many individuals in the Part-Time workforce that might feel that UPS Part-Time workers also make good wages and benefits. 

During the interview with CNN, O’Brien was asked if the anxiety around a UPS strike, or actual strike, could hurt Teamster members. He responded by saying that volume lost due to a strike would ultimately come back to UPS. This is a pretty bold statement to make, given the multitude of new Small Parcel carrier options that have developed over the past couple of years. So, Sean may be missing something in his approach. 

However, Sean O’Brien and the Teamsters have continually stated the fact that they intend to take on corporate America in their fight for better pay and wages, especially Amazon.  In the press conference that he held this past Saturday, Mr. O’Brien said “This is the largest collective bargaining agreement in any private sector union,”. He went on to say that this contract could “set the tone and set the standard high for labor — not just the Teamsters but the entire labor movement.”

So the question becomes, are the Teamsters serious in their attempts to make an example of UPS, sacrificing their own members job for the better good of all workers in the US? Or is this just part of the ongoing attempt to squeeze every dime that they can out of UPS. 

Last week, we had predicted that UPS would cave into the Teamsters demands, and then just pass the cost along to customers, to avoid further Shipper anxiety or a strike.  Our prediction was based on the fact that there was a lot of progress being made. However, the recent turn of events is causing us to rethink our position. Based on this recent news, it appears that there is a greater possibility for a strike. 

However, we are sticking to our guns with one part of our prediction. Regardless of the fact that there is a strike or not, the end result will be increased costs for all shippers. UPS has already agreed to many items that will drive up their costs (Improved cooling in vehicles, elimination of Two Tiered Driver system, increased Holidays, etc.). Ultimately UPS will need to agree to an increased wage package for all employees as well. 

Also, if there is indeed a strike, UPS will need to recoup some major lost revenues. So, it appears to be inevitable that we can expect continued record level rate increases from UPS, which will drive the same from the rest of the industry. So, as they say “In Life the only thing that is certain is Death and Taxes. Well we would like to add something else to that phase “AND SMALL PARCEL RATE INCREASES.” 

We might not be able to help you avoid Death and Taxes. However, we are certain that we can help you combat the ongoing onslaught of Small Carrier Rate increases. Reach out to us today to find out how.