By Bryan Jung
United Parcel Service agreed to resume labor talks with the International Brotherhood of Teamsters this week to avoid a strike that could disrupt supply chains and harm the economy.
The package-delivery service will again start labor talks with the union, which represents 340,000 employees, on July 25, ahead of the looming strike.
Labor negotiations broke down on July 5 with both sides blaming the other.
Talks between the Teamsters and UPS began in April over an existing five-year contract covering the company’s drivers, package handlers and loaders in the United States, which expires on July 31.
The Teamsters demand a five-year agreement that increases pay and full-time jobs and strengthens protections for all workers, including part-timers.
A 10-day strike could cost the American economy more than $7 billion, according to a recent estimate from Anderson Economic Group.
Both Parties Agree to Preliminary Concessions
UPS already agreed on eliminating a two-tier pay structure for delivery drivers and putting air conditioning in delivery trucks, but remains at odds with the union over pay increases for part-time workers who sort packages and load trucks.
A UPS spokesperson told CNN that part-time staffers, who represent 55 percent of the 340,000 Teamsters working for the company, actually receive the same benefits as full-time workers.
However, they make less than full-time employees, who earn, on average, $95,000 a year.
Part-timers begin with $16.20 an hour and are eligible for a higher hourly rate after 30 days and, on average, make $20 an hour, according to the spokesperson.
Experienced part-time workers are making roughly the same amount or even less than new hires, after starting wages jumped due to the labor shortage over the past few years.
The Teamsters also complained that it can take years for part-time workers to become full-time.
UPS stated that 38,000 part-time employees became full-time employees from August 2018 to December 2022, according to CNN.
Teamsters Demand More Rights for Part-Time UPS Employees
Teamsters Union president Sean O’Brien said during a July 22 rally speech in Atlanta, “We’ve organized, strategized, now it’s time to pulverize.”
Mr. O’Brien told CNN that 95 percent of the contract was already negotiated, and “now we’re down to economics, and UPS knows they need to pay our members, especially the part-timers.”
“With the contract expiration less than two weeks away, we need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country,” a UPS spokesperson told Reuters on the day of the Teamsters rally.
UPS said it hopes to “resolve the few remaining open issues” at the talks and that the company started negotiations “prepared to increase the already industry-leading pay and benefits we provide our full and part-time union employees and are committed to reaching an agreement that will do just that.”
Earlier this month, UPS stated that would temporarily start training nonunion employees in case a strike occurs.
UPS already employs nearly 100,000 nonunion U.S. employees as of the end of last year.
Although the Teamsters have accused UPS of making record profits in recent years, earnings, volume, and revenue have dropped year over year in the first quarter.
The company also warned of a possible global economic downturn in 2023.
When asked what was next if a deal between the two sides is not reached by July 31, Mr. O’Brien told CNN that they would strike after midnight on August 1.
Mr. O’Brien told CNN that a strike would be felt both domestically and internationally, “because the pilots union that represents the pilots for UPS have committed to us that they will not turn a wheel if the teamsters go on strike.”
A spokesperson for the Independent Pilots Association, the union representing cargo-plane pilots working for UPS, confirmed with CNN that that they would not cross picket lines if the Teamsters decided to strike next month.
The Epoch Times reached out to the Teamsters and UPS for comment.
Teamsters Strike Expected to Disrupt US Economy
“UPS represents our members that deliver goods and services that deliver 7 percent of gross national product,” Mr. O’Brien said.
“So, the [UPS] supply-chain solutions will take a huge hit.”
The Retail Industry Leaders Association (RILA) warned that major supply-chain issues would unfold if the union goes on strike and that it could cause it billions of dollars in economic losses.
UPS is the second-largest package delivery service in the United States, right behind the U.S. Postal Service, and delivers roughly 20 million packages per day.
“Even the most robust planning won’t shield retailers or consumers from the impact of shutting down a key component in the supply chain as we head full-steam into back-to-school and then holiday shopping seasons,” RILA said in a statement.
The association said that any disruption to UPS deliveries would be very disruptive, since the company handles about a quarter of all U.S. parcel shipments, including deliveries for Amazon, prescription drugs for hospitals. and supplies for millions of small businesses.
Logistics publication Freightwaves noted that UPS handled about 18.6 million packages a day in the United States during the first quarter.
About 30 percent of deliveries, or 4 million parcels per day, could be affected in the event of a strike, it stated.
Regardless of whether a strike occurs, UPS customers are likely to face higher shipping rates, according to analysts.
“A new Teamsters deal could drive the cost per piece [about] 2 percent higher than current expectations,” Bascome Majors, an analyst at Susquehanna, told clients in note earlier this month, according to Reuters.
The last time UPS faced a nationwide strike was a 16-day walk-off in 1997 by the Teamsters, which essentially shutdown all American operations and deliveries ceased.
The delivery service only employed 180,000 Teamsters during that strike, slightly more than half the members it has now, when it was far less central to functioning of the U.S. economy, Patrick Anderson, president of Anderson Economic Group, told CNN.
“It wasn’t a tech-centric economy built around small-package delivery then,” said Mr. Anderson.
Reuters contributed to the report.