UPS/Teamsters- Down to the Wire!

We are getting down to the wire with the UPS/Teamster negotiations. As of today there are only 13 days left on the Teamster strike countdown clock. At this point, there has been no word of a return, or a plan to return, to the negotiating table.

This is continuing to cause a great deal of anxiety for all shippers. 

We have continued to monitor internal Teamsters communications, as well as other media sources in an effort to provide our customers and followers with the latest information. Unfortunately, most of the information that is being reported to UPS Teamsters members from their leadership team includes details related to Practice Picketing, Teamster Unity, and Rallies across the country. 

On Saturday July 15th, UPS Teamsters General President, Sean M. O’Brien and Teamsters Local 804 President Vinnie Perrone, headed up a rally on Long Island, NY. While addressing the crowd, Mr. O’Brien stated “UPS has a choice. They can respect and do right by working people, they can pay the wages that part-time and full-time workers deserve, and they can agree to terms on a strong new contract. Or UPS can wait until August 1 and regret turning its back on the hardworking people who make it a success. We are not backing down. We will take on this corporate bully for as long as it takes to get what we’ve earned.”

Although the Teamsters have stressed that they are not willing to back down, they sort have already done so. The Teamsters had told UPS that they needed to have their last, best and final offer by July 5th, as they needed at least 3 weeks to get the agreement out to vote for ratification. They have stated over and over again, that they will not be working without a contract. They had suggested that without an acceptable offer by July 5th, they would be forced to declare a strike by the end of the month. As we all know, that offer did not come by July 5th. 

So, if the Teamsters were to be true to their word, they should be saying that they will definitely be on strike as of midnight on July 31st, given the fact that the agreement could not possibly be ratified with the limited time that is left. 

On Sunday July 16th, the Teamsters held an online meeting with Teamster members. During the meeting Sean O’Brien informed Teamster members that they will not go on strike by August 1st if they could reach a tentative agreement with UPS before then. He said that “In the event we get a tentative agreement subject to ratification of our members and we recommend it, and our members are satisfied with it, we will work until the contract is ratified….” 

This goes against all of the earlier communications that the Teamsters had put out that stated that they would not be looking for extensions of the existing agreement. Earlier in the process, O’Brien had stated that “When we say the current contract expires July 31, that means we want a new contract in place starting August 1. Not in six months. Not next spring. We demand a historic new contract on August 1, with more money in our members’ pockets immediately.” 

So this does leave some time for UPS to come back with an offer that is acceptable to the Teamsters. Also, if you think about it, would it really have made sense for UPS to make their last best and final offer by July 5th? If an offer had been made, it would have left the door open for the Teamsters to keep asking for more up until the expiration date. So, it is very possible that UPS considered this scenario, and has decided to come in with their final offer as we get closer to the deadline. 

One would hope that deep down inside, the Teamsters and their members don’t want to go on strike. After all, it would also have a major financial impact on them as well. If a strike is called, the union would need to dip into the $300M Strike fund that they reportedly have amassed. This fund could be easily wiped out if the strike went on for a few weeks.  From an individual perspective, Drivers and Part Time workers would receive far less from the union than they receive in their weekly UPS wages. 

For example, a regular Full-Time package car driver would receive approximately $520 per week in strike benefits from the union.  UPS has reported that a UPS Driver receives average weekly wages of approximately $1800. So, the average driver would see a reduction of income of over 70% for each week they are on strike. 

Also, we hope that Teamster leadership realizes the additional damage that would be done to their organization for the long term if they were to strike. Sean O’Brien has gone on record as saying that volume lost to non-union competitors will come back. Based on what we know about the industry, and have been hearing from our customers, we don’t feel that volume will return to UPS the way it has in the past. 

We expect that the remaining single-sourcing customers will be forced to permanently engage the services of other parcel delivery providers to protect themselves. Many have already done so, just due to the threat of a strike. So, not sure how the Teamsters can expect that after an actual strike, they would see all of the volume come back to UPS. There are so many more options for shippers today compared to the last UPS Teamster strike that occurred in 1997, and the options can be far less costly. So hopefully this reality has set in for the Teamsters and their leaders!

We are still uncertain about the governments intent to intervene in these negotiations. In his address to the Teamsters membership on Sunday, Sean O’Brien once again used his Boston street fight analogy, where he describes how people fought in his neighborhood streets, the unwritten rule was that if it had nothing to do with you, you just kept on walking and stayed out of it. He suggested that the government should stay out of this battle.  

Well, from what we can tell, given the fact that UPS carries 6% of the US GDP, one might say that this fight might have something to do with the US Government/US economy, so maybe they shouldn’t just keep walking! 

There have been various reports of UPS preparing for a strike by training non-union delivery workers. Earlier in the process, we had speculated that UPS might try to tap into the PVD (Personal Vehicle Delivery) process that they typically utilize during their peak periods, to help keep packages moving. However, we are not certain how they would be able to support the ongoing pick-up and sortation of packages. It is pretty safe to assume that UPS would only be able to process a small amount of volume, most likely only the packages that have reached their destination delivery facility. 

So, if UPS is truly preparing for a strike, they are most likely considering that they will begin reducing the amount of volume being picked up. We would expect that UPS would need to begin eliminating pick-ups within 5-7 days of the agreement expiration, which does not leave much more time!

Or, this all can come to an end if UPS has indeed been purposely delaying an acceptable offer, in order to prevent the Teamsters from pushing for more. Getting closer to the current agreement expiration doesn’t just put UPS’s back against the wall. As described above, the Teamsters have a lot to lose as well!  So, given this, we are making the prediction that there will be a last minute acceptable offer made, and a strike will be avoided.

Once again, we provide no guarantees that this is how it will shake out. The only thing we are willing to guarantee is that we are ready, willing and able to help you in your efforts to reduce your Transportation and Logistics expenses. So, what are you waiting for?? Reach out for us today!