Consultant Insight: UPS, Teamsters to begin national negotiations this month

UPS and the Teamsters will begin national negotiations April 17 in what will likely be a spirited discussion to reach an agreement before the existing contract expires on July 31. [caption id="attachment_76185" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] The rhetoric has steadily grown louder from the Teamsters over the past few months, serving as a rallying cry for union members to vote. “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,” Teamsters General President Sean M. O’Brien said in a statement. “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.” O’Brien does not want a repeat of 2018, the last time the contract for more than 340,000 package delivery drivers and warehouse logistics workers nationwide was up for a vote. At that time, 54% of union members voted no on the contract, but only 44% of the eligible members voted. Under the Teamster’s constitution, in cases where less than half of eligible members vote, at least two-thirds of voters must oppose the contract for it to be rejected. What’s at stake? The Teamsters are looking for higher wages and eliminating the “22.4” employee classification. These part-time drivers work Tuesday through Saturday and are paid less than regular drivers. In addition, the Teamsters want to eliminate the use of personal vehicle drivers, who typically use their own vehicles to deliver smaller quantities of packages in a smaller delivery area, usually during peak periods. Other issues include surveillance cameras on package cars and improved safety measures inside vehicles during extreme temperatures. UPS has been quiet and will likely continue to keep a low profile throughout the negotiations. “We are well-prepared for negotiations and are focused on achieving an agreement that is a win for our employees, a win for the Teamsters and a win for UPS and our customers. We have great jobs with industry-leading pay and benefits,” UPS Chief Executive Carol Tome told analysts Jan. 31. “We believe the best way to achieve a win-win outcome is for us to leave the details of the negotiations at the bargaining table.” However, UPS’ competition is looking to take advantage of the negotiations, particularly as a potential strike could disrupt peak season. Capacity for the peak season is usually locked in months before the season (October through January) begins. During a conference call in March, when an analyst asked about a “potential for a labor action at one of your competitors,” FedEx Executive Vice President and Chief Customer Officer Brie Carere said, “As customers are inquiring about available capacity at FedEx, we have been really clear that, yes, of course, we would entertain any good business, and we'd love to talk to them. We need to have that business on board and those contracts signed by the end of March. We will not put our staff up like this is a peak factor. We are going to plan for long-term partnerships with customers.” It is likely that the longer negotiations last, the more volume is expected to transition away from UPS to carriers such as FedEx , smaller regional carriers and the U.S. Postal Service . While many carriers have followed UPS’ lead toward focusing on more profitable volumes, declines in the overall parcel market may force many to accept volumes that may not be as profitable as they’d prefer but, instead, would help optimize trucks and routes.

Consultant Insight: UPS, Teamsters to begin national negotiations this month

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