Consultant’s Insight: Potential UPS strike would include UPS pilots

UPS and the International Brotherhood of Teamsters reached an impasse in their contract talks Wednesday as each accused the other of leaving the negotiation table first. No word on when they’ll return to negotiations, but a strike becomes more likely as each day passes. Should a strike occur, UPS pilots, members of the Independent Pilots Association (IPA), will support the Teamsters and walk off their jobs, leaving UPS without access to its asset-owned transportation services. [caption id="attachment_68221" align="alignleft" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] “It’s reassuring to know that the IPA has agreed to recommit its full and unequivocal support to assist the IBT in any way possible, including honoring our picket lines and otherwise acting in sympathy with IBT if there is a work stoppage,” Teamsters General President Sean O’Brien wrote in a June 26 letter to IPA President Capt. Robert W. Travis . The letter was shared via Twitter on June 28. The last time the IPA supported the Teamsters was during the 1997 strike against UPS. “During the 15-day strike [in 1997], IPA pilots, in full uniform, marched arm-in-arm with us on our picket lines,” O’Brien wrote in the letter. “Not only did IPA show its support of the IBT by picketing with us, but, more importantly, IPA pilots refused to ‘turn a wheel’ domestically and internationally.” In 1997, UPS Airlines was still a fledgling service established in 1988. Today, however, it’s a major global air cargo carrier, ranked third largest in scheduled cargo tonne kilometers, behind FedEx Express and Qatar Airways , in 2021 by IATA World Air Transport Statistics . Post-pandemic air cargo volumes have since slipped. UPS Chief Financial Officer Brian Newman noted during the company’s first-quarter earnings call in April that it was reducing international scheduled flights to reflect lower market demand and, domestically, it was adjusting package flows to maximize utilization on its next-day flights resulting in reduced block hours. UPS health care concerns Despite air cargo volume declines, a pilot walkout will have a damaging impact on UPS’ revenue and serious repercussions on UPS’ health care segment. “We aim to become the world’s No. 1 complex health care logistics provider,” UPS Chief Executive Carol B. Tome told analysts in April. “To help us get there, we plan to open seven dedicated health care facilities this year. In Q1, revenue from our health care portfolio reached $2.4 billion, and we expect to generate over $10 billion in health care revenue in 2023." UPS consolidated its health care holdings into one unit in 2019. The unit includes health-care-specific warehousing, United Kingdom-based temperature-controlled logistics provider Polar Speed and Marken , its clinical trials logistics subsidiary. In 2017, a year after UPS acquired Marken, Marken announced a hybrid logistics service that leverages UPS’ global transportation network. “The hybrid service enables Marken to utilize the UPS network, including its expansive airline, for a portion of the route,” Marken said in a May 2017 statement. “The hybrid offering reduces reliance on commercial aircraft for many routes. Marken can enhance their service’s quality and value proposition when using UPS Airlines.” However, a walkout will result in Marken and other parts of UPS’ health care portfolio having to use commercial aircraft and perhaps risk losing time-definite, high-valued volumes to FedEx Express or DHL Express . Strike would benefit FedEx UPS Airlines transports goods from all industries and has focused much of its expansion in the Asia-Pacific region. Over the years, UPS has also focused on e-commerce and built a significant cross-border e-commerce solution. These growth areas, geographic and solution, could be negatively impacted by a walkout. Meanwhile, FedEx Express would likely benefit from such a labor action. Still, UPS remains optimistic and plans to take possession of seven new and used Boeing 767-300 aircraft this year, 21 new Boeing 767-300 aircraft between 2024 and 2025, and two used Boeing 747-8F aircraft in 2024. Join Air Cargo Next for the second Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

Consultant’s Insight: Potential UPS strike would include UPS pilots

Eurocontrol warns of air-traffic control strike over summer

Air cargo rates ‘close to parity’ with 2018-19 levels

Related Posts

Widebody transactions carry momentum into June

From the Cockpit with K2 Aviation’s Karl Ryan

Production freighter activity highlights May FATs

Air cargo rates ‘close to parity’ with 2018-19 levels

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password