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.
However, Local 804 members suggested that these layoffs are being used as a scare tactic by UPS, and are designed to divide UPS-Teamster members. Perrone discussed the fact that if a worker has their hours cut, while their coworker voluntarily works overtime, the former would surely come to resent the latter.
The mood and tone at this powerful Teamster Local meeting is certainly a lot different than the mood and tone that UPS Leadership is attempting to portray. UPS CEO, Carol Tomé has said she doesn’t believe the company and the union are far apart as they prepare to negotiate a new five-year contract.
Also, following UPS’s release of Q4 2022 earnings, UPS CEO Carol Tome presented at an internal meeting which was attended by over 10K UPS employees (in person as well as on-line). Carol’s intent was to “share her vision for a better and bolder UPS.”
During her presentation, Carol stated that “if you make your numbers and you’re not taking care of your people, well you’re not really doing the right thing.” She went on to say that “what we’re about right now is doing it all, making our numbers, taking care of our customers, and taking care of our people.”
These were interesting statements to make in advance of the Teamster Contract negotiations that are scheduled to begin in April. Obviously, Teamster leadership has already taken note of the record earnings that UPS has experienced over the last couple of years. So, we are certain that they will latch onto Carol’s statements regarding the intent to take care of its employees. This will help to strengthen the Teamsters position that their members deserve more.
If UPS truly intends to reward Teamster employees for the success and financial growth that the company has experienced, it creates one very important question.
What does this mean for UPS customers?
The bottom line is that UPS Teamster raises will need to be funded somehow. The expanded use of automation and improved efficiency can help to lower costs, which can help cover some of the wage increases. But, deploying automation carries a cost as well.
So, this points to the likely situation that record level UPS Teamster wage increases will drive the need for ongoing, record level rate increases by UPS. Therefore, shippers need to prepare for this now, and take measures to gain control over shipping costs that will continue to rise at a rapid pace. Please reach out to ICC Logistics to find out how our services can help you get costs under control and improve your bottom line.
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