One of the biggest strikes in American history is brewing at UPS


New York
CNN Business

Over the past year, nascent labor movements in powerful corporations like Starbucks and Amazon captured national attention. But less well known is a looming clash between one of America’s oldest unions and the world’s largest parcel carrier.

Contract negotiations are expected to begin in the spring between UPS and the Teamsters Union before their current contract expires at the end of July 2023. Already, before talks even begin, labor experts are predicting that drivers and package handlers will leave in strike.

“The question is how long will it take,” said Todd Vachon, a Rutgers labor relations professor. “The union president came forward and won by taking a more militant approach. Even though they are very close [to a deal]the base will be thirsty to face the company.

If that happened, a strike at UPS would affect almost every household in the country. It is estimated that 6% of the country’s gross domestic product is transported in UPS trucks each year. The explosive growth of online retail has made the company and its drivers more crucial than ever to the country’s struggling supply chain. Beyond the company’s home deliveries, it also delivers many products found in stores, factories and offices.

About 350,000 Teamsters work at UPS as package drivers and sorters out of a global workforce of 534,000 permanent employees. And that’s growing fast — the company has added some 72,000 Teamster-represented jobs since the pandemic began.

Although there are competing services at FedEx

(FDX)
the US Postal Service and Amazon’s own delivery service, none of them have the capacity to handle more than a small fraction of the 21.5 million US packages that UPS transports daily.

“We want a contract that provides benefits to our employees and provides UPS with the flexibility to stay competitive in a rapidly changing industry,” the company said in a statement this month. “UPS and the Teamsters have worked together for nearly 100 years to meet the needs of UPS employees, customers and the communities where we live and work. We believe we will continue to find common ground with the Teamsters and reach an agreement that is good for everyone involved.

The union has not struck against UPS for almost two-week protest in 1997. If the union went on strike, it would be the largest strike against a single company in the country’s history.

There are certainly signs of strain in the relationship between the company and the union, both its leadership and its rank and file members.

A majority of members voted against ratifying the current contract in 2018, only to see the former Teamster leadership, led by then President James Hoffaput it in place because not enough members participated in the ratification vote to call a strike.

The new president of the union, Sean O’Brienwon his job earlier this year by making the The UPS contract at the center of his campaign. He has pledged to make UPS pay Teamster members a lot more this time around and he often talks about a $300 million strike fund the union has built up to pay members in case they get into trouble. strike.

“Do our members wake up every day wanting to go on strike? I would say no. But are they fed up? Yeah, they’re fed up,” O’Brien told CNN Business last week. “Whether or not there is a strike is entirely up to the company. We will use as much leverage as possible to give our members the contract they deserve.

UPS said the average salary for its delivery drivers is $95,000 a year, with benefits such as a traditional pension plan worth an additional $50,000 a year. UPS tractor-trailer drivers get paid even more. That’s far more than most salaries at FedEx and Amazon, where many drivers work for small independent contractors.

The current contract expires at 00:01 on August 1. O’Brien swears that the union will not grant any kind of contract extension beyond this deadline.

And he added that in addition to improved wages and benefits, the union will demand better working conditions, including the addition of air conditioning in panel trucks used for UPS deliveries, which the union says poses a risk for the health of drivers.

“It’s not a big burden for the company to install air conditioning,” he said. “There’s a lot of heat stroke going on.”

The company often talks about the value it places on its Teamster-represented workforce.

And in one important way — the jobs numbers — UPS is one of workers’ best friends in the executive ranks of American companies, despite the obvious tensions. UPS is one of the few unionized employers to significantly increase payroll and union membership. In other companies, the number of union members has been in constant decline for decades.

The increase in Teamsters jobs at UPS is due to the steady growth of online shopping, especially during the pandemic-era surge. Last year it took just nine months to report what was already a record full-year profit. UPS ended 2021 with operating income up 50% to $13.1 billion. In the first half of this year, profits were up another 10% from a year ago.

“Everyone keeps getting richer except our members,” O’Brien said.

UPS CEO Carol Tome, who started this job at the start of the pandemic, says the company’s union contract is a competitive advantage in a time of labor shortages.

She also tries to assure both investors and UPS customers that the company will be prepared in the event the union goes on strike. She declined to comment on what those preparations are.

“Our goal with the Teamsters is win-win-win,” she told investors in July. But she added that UPS was “building contingency plans.”

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