Some positive news has just hit the presses, so we wanted to help spread the word to our customers and followers. UPS and the Teamsters have just announced that they have reached a tentative agreement on a new contract. Although the agreement has not been officially accepted by the Teamster Membership, their leadership team had indicated that they would not call a strike if a tentative agreement could be reached before the deadline on July 31st. This will now go out to members to ratify. It will take approximately 3 weeks for this voting process to be completed.
So let us first “toot our own horn!” In the article that we released on July 19th, we made the following prediction “… there will be a last minute acceptable offer made, and a strike will be avoided.” This prediction was based on us closely following the situation, along with our unique industry knowledge and insight. It is important to note that we had made this prediction, and released our article prior to the announcement that UPS and the Teamsters were returning to the negotiating table. So with only 6 days left on the Teamsters Strike Countdown Clock, the two parties reached a handshake deal!
I guess we knew what we were talking about!
From the time that talks broke off on July 5th until now, the Teamsters had continued to build pressure and publicity around these negotiations. “Practice Picketing” and rallies continued to happen around the country, and the news media picked up on it. Teamster General President Sean M. O’Brien, was very visible in the media, where he continued to publicize the plight of the Part Time UPS worker, and he continued to threaten to strike unless UPS met Teamster demands.
Although UPS seemed to have little to say to the media from the time that negotiations broke down until now, they seemed to have launched a campaign to try to counter the negativity that the Teamsters had created regarding how they treated UPS Part-Time workers. UPS provided multiple posts on their LinkedIn page that described some of the benefits of UPS Part Time work including industry leading pay, full medical benefits, and tuition reimbursement. We also saw articles and posts from current and former UPS executives, that described how they had started with UPS as part timers, and rose through the ranks to their positions.
The interesting thing here is that historically, UPS has struggled to attract and retain employees for their part time jobs, even with these industry leading wages and benefits. Part-Time jobs at UPS tend to be difficult and physically demanding (loading, unloading and sorting of packages). Also, UPS operates under strict performance requirements. So, many individuals that are drawn in by the attractive wages and benefits package, don’t last very long with UPS due to the physical and mental demands of the job.
On top of this, UPS competes for workers with other companies (like FedEx and Amazon), who may be willing/ able to pay more with less demanding requirements. So, it appears that the Teamsters might have not have been the only ones that were concerned about Part-Time worker’s wages and benefits. In the end, the UPS Part-Time job received a lot of advertising over the past couple of months and ultimately a nice bump in salary.
The Teamsters informed their members that the new agreement will include raises of $2.75 more per hour for full time and part-time workers in 2023, and $7.50 over the life of the agreement. Also, existing part-time workers will be raised up to no less than $21 per hour immediately. They reported that existing part-time workers will receive a 48% average total wage increase over the next five years.
So, one would have to guess that UPS knew that they were going to offer substantial increases to part-time UPS Teamsters when they returned to the bargaining table. It is very interesting that they would launch a publicity campaign that would help attract part-time workers at the same time. Maybe it’s just us, but this does create the appearance that this was all well planned out. What a great way to attract and retain workers!
In the article that we released on July 13th, we had described the different ways that these negotiations could play out. One of the scenarios that we described was “The Show”. In this scenario, we explained how the Teamster leadership team needed to portray strength and a significant fight to end to fulfill their promises to members. We also explained how UPS could gain some good publicity by taking care of their part-time workforce. Given the fact that these negotiations went down to the wire, along with the large increases that UPS has agreed to provide to part time workers, it appears that another one of our predictions came through.
Sorry – Toot Toot!
One of the other things that we have predicted throughout this process is that these negotiations will ultimately be costly for shippers. Teamster General President Sean M. O’Brien, has stated that “UPS has put $30 Billion in new money on the table as a direct result of these negotiations….” So, there goes the horn again!
Given our success with making accurate predictions, we are going to make another one. That is, if you don’t do something now to protect your business from rising transportation costs, you will continue to see your profit margins erode.
Maybe it’s time to take a look at your Carrier contracts to determine if you are receiving proper market rates. Maybe it’s time to look at your current 3PL Fulfillment provider to determine if you have better/ less costly options. Maybe it’s time to look at the new carrier options that have sprung up in the last couple of years. Maybe you need to start auditing your carrier bills to ensure that you are not bleeding money due to costly billing errors.
We realize that undertaking any of these initiatives can be a daunting and impossible task. We know it’s hard enough just keeping up with your day to day responsibilities. However, the good news is that ICC Logistics can help simplify the process for all of these projects. Please reach out to us today to find out how we can help maximize your cost reduction efforts with little or no effort on your part.
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