Global Courant
NEW YORK (AP) — UPS has reached a preliminary contract with its 340,000-member union, potentially averting a strike that threatened to disrupt logistics across the country for businesses and households alike.
The deal was announced after UPS and the Teamsters returned to the negotiating table on Tuesday to discuss remaining bottlenecks in North America’s largest private sector contract. Both sides had already reached tentative agreement on numerous issues, but continued to disagree on issues such as the compensation of part-time workers, who make up more than half of the UPS employees represented by the union.
The Teamsters called the preliminary agreement “historic” and “overwhelmingly lucrative” in a prepared statement. It includes higher wages and air conditioning in vans, among other things.
“Together, we have reached a win-win-win agreement on the issues that matter to Teamsters leadership, our employees, and to UPS and our customers,” UPS CEO Carol Tomé said in a written statement. “This agreement continues to reward UPS’s full and part-time employees with industry-leading compensation and benefits while maintaining the flexibility we need to remain competitive, serve our customers and keep our business strong.”
The company said the five-year agreement covers U.S. Teamster-represented employees in small pack roles and is subject to vote and ratification by union members.
The union, which had long threatened a strike, boasted of “historic pay increases” for its members, saying existing full- and part-time UPS Teamsters will receive $2.75 more per hour in 2023, and $7.50 more per hour over the term of the contract.
It said the agreement includes a provision to raise starting pay for part-time workers to $21 an hour, up from $16.20 today. It also reiterated previous concessions it had received from the company, such as making Martin Luther King Day a full holiday for the first time and ending forced overtime on drivers’ days off.
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Members of the Teamsters, angry over a contract they say was forced on them by union leaders five years ago, clashed with UPS over pay as the delivery company’s profits soared in recent years. The union’s leadership was turned upside down last year with the election of Sean O’Brien, a vocal critic of the union president who signed that contract, James Hoffa, the son of the famed Teamsters firefighter.
The two sides had reached a tentative agreement early on on safety issues, including equipping more trucks with air-conditioning equipment. Under the agreement, UPS said it would add air conditioning to U.S. small vans purchased after January 1, 2024.
Earnings at UPS have grown more than 140% since signing the latest contract as the arrival of a deadly pandemic has dramatically changed the way households get what they need.
Union workers argued that they were the ones taking on the growth at the Atlanta company and seemed determined to right what they saw as a bad contract.
The 24 million packages that UPS ships on an average day represent about a quarter of all package volume in the US, according to global shipping and logistics company Pitney Bowes. As UPS puts it, that’s the equivalent of about 6% of the nation’s gross domestic product.
Member voting begins August 3 and ends August 22.
UPS has the largest contract with private sector workers in North America, and the last labor bargaining failure a quarter of a century ago led to a 15-day strike by 185,000 workers who paralyzed the company.
If a strike were to happen, logistics experts had warned that other shipping companies would not have had the capacity to handle all the packages coming their way. Customers shopping online may have experienced higher shipping costs and longer wait times.
The deal averts a major shipping crisis just as merchants were in the throes of the back-to-school shopping season, the second largest sales period after the winter holidays.
The Retail Industry Leaders Association, a national retail group that counts retailers like Best Buy, CVS Health and Kohl’s as members, called the tentative pact “a huge relief for retailers, who have been navigating the possibility of a strike and the uncertainty that comes with it for weeks.”
“We have learned all too well over the past few years the impact supply chain disruptions can have,” the group said in a statement. “We are thankful that this challenge, which would have had a multibillion-dollar price tag and a long road to recovery, was avoided.”
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Matt Ott contributed to this report from Washington, DC and Anne D’Innocenzio contributed from New York City.
