UPS and the Teamsters are set to return to the negotiating table next week

The on-again, off-again tone of the ongoing, and fairly contentious, labor negotiation talks between Atlanta-based global freight transportation and logistics services provider UPS and the International Brotherhood of Teamsters (IBT) took a positive step today.

That step was UPS saying that it will return to the negotiating table next week.

“We are pleased to be back at the negotiating table next week to resolve the few remaining open issues,” said UPS in a statement. “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 fact that the parties are returning to the negotiating table represents, at the least, a form of modest progress, considering that on July 5, the Teamsters stated that negotiations had collapsed, with UPS having made what the Teamsters called an “unacceptable offer to the Teamsters that did not address members’ needs,” leading to the UPS Teamsters National Negotiating Committee, which represents the 340,000 full- and part-time worker UPS Teamsters members, to reject the offer.

What’s more, the Teamsters said that UPS refused to give the Teamsters a last, best, and final offer, telling the union the company had nothing more to give. As previously stated, the Teamsters said that its UPS members will not report for work after July 31, at the expiration of the current contract, which was indicated by 97% of UPS Teamsters members authorizing a strike last month.

A July 16 Bloomberg report noted that “the last major sticking point for renewing a new five-year labor agreement has to do with the Teamsters asking for higher part-time wages.

The report cited the Teamsters’ O’Brien as saying it is unacceptable that 100,000 part-time UPS workers make less than $20 per hour.

UPS countered that earlier this month, stating that part-time union employees at UPS currently make an average of $20 an hour after their first 30 days of employment and receive wage increases every year, in addition to cost-of-living adjustments.

And in addition to competitive pay, the company said UPS part-time employees receive the exact same industry-leading health and medical benefits as full-time employees.

“They are among just 7% of U.S. private sector employees to receive a pension, and also receive healthcare benefits with no premiums and low or no copays,” said UPS. “Starting part-time wages are $16.20 (at minimum).”

UPS said late last week that it is making preparations, in the event of a strike.

“We remain focused on reaching an agreement with the Teamsters that is a win for UPS employees, our customers, our union, and our company before Aug. 1,” UPS said in a statement issued on July 14. “While we have made great progress and are close to reaching an agreement, we have a responsibility as an essential service provider to take steps to help ensure we can deliver our customers’ packages if the Teamsters choose to strike.

To that effect, UPS said that over the coming weeks, many of its U.S. employees will participate in training that would help them safely serve its customers if there is a labor disruption.

“This temporary plan has no effect on current operations and the industry-leading service our people continue to provide for our customers,” said UPS. “This training is aligned with our ongoing commitment to safety and business continuity. These activities also will not take away from our ongoing efforts to finalize a new contract that increases our employees’ already industry-leading wages and benefits, allows UPS to remain competitive and provides certainty for our customers and the U.S. economy.”

Spencer Shute, a consultant for Proxima, a supply chain and procurement consulting firm told LM that there are major supply chain implications that could be realized with or without a deal on July 31st: a strike, significant cost increases, and worst-case scenario, both.  

“Addressing a potential strike is slightly easier to predict in terms of impact,” explained Shute. “A significant portion of volume (>20 million packages per day) would be disrupted if UPS Teamsters strike. Competitors FedEx, USPS, and regional and local providers simply do not have capacity to take on this volume. While some mitigation steps are in place with shippers diverting volume and UPS committing to prioritize certain customers by using non-union labor, the impacts will be felt by shippers and consumers across the country. Significant delays, held packages, and increased costs, all through spikes in demand with reduced capacity, would spark supply chain disruptions within the US across all sectors. The financial impact on the US economy is estimated to be in the billions per day and would grow if a prolonged strike is realized.”