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UPS and Union Negotiations Begin Again

UPS Inc. and the International Brotherhood of Teamsters announced in a joint statement on July 19 that contract negotiations between the two parties will commence again.

The new labor contract for unionized drivers will be discussed the week of July 24, the current contract is set to expire on July 31.

Neither side has given a date or location for when these negotiations will take place, but they did say that decision will be announced soon.

On July 3, we reported that UPS had agreed to remove their two-tier wage system but ultimately the union rejected the company’s proposal, stating it was not the last, best, and final offer, “telling the union the company had nothing more to give,” said Union General President Sean M. O’Brien on June 27.

Since then, UPS Inc. agreed to discard a four-year old, two-tier pay and benefit scale for weekend delivery drivers and package handlers, removal of mandatory overtime provisions and installation of air conditioning in older delivery vehicles and in future newly purchased trucks.

“We are pleased to be back at the negotiating table next week to resolve the few remaining open issues,” the company said in a statement announcing the resumption of talks. “We are prepared to increase our industry-leading pay and benefits, but need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country.”

“The Teamsters’ agreement with UPS is the largest private-sector union contract in North America. UPS Teamsters are demanding the strongest possible contract or are prepared to strike,” the union said on July 19. 

Stakeholders in the transportation industry are closely following the negotiations. 

“This is very positive. We don’t know what the reason was for this positive development, but it’s much better than posturing and not talking to each other with the deadline looming at the end of the month,” said Paul Bingham, director of transportation consulting with S&P Global Market Intelligence. “It’s better for everyone involved if they are going to work towards a resolution of the contract — I don’t know how you can view it any other way. This is a very positive development.”

“Until your contract is expired you’ve got time to make a deal,” he added. “Both sides are going to suffer if there is a strike and there is no revenue flowing to the company and no wages to the workers. They’re both going to lose in the end, because some shippers will shift to other carriers and not come back. And there will be other challenges to disappointing your customers, that rely on you.”

“I don’t know that either hand has an upper hand, but they need to find a resolution.”

According to Michigan State University Associate Professor for Supply Chain Management Jason Miller, UPS transports roughly 25 million packages daily.

This accounts for 6% of the United States GDP, including vital economic sectors such as healthcare, apparel, spare motor vehicle parts, and electronic components.

Miller goes on to say that due to the volume of work UPS conducts, other carriers like FedEx and DHL would struggle to take on work of that capacity.

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