A potential labor strike could be in the works for unionized workers of UPS, who are upset about what they claim was an unfair contract negotiation that took place in 2018. UPS workers claim that the COVID pandemic accelerated the online shopping appetite of Americans tenfold, and as a result, feel they are owed a contract renegotiation given the part they’ve played in bolstering the transformation of the new retail landscape. A strike would be highly detrimental to both business and online shoppers; UPS is responsible for delivering more than 24 million parcels daily, accounting for around 6% of America’s gross domestic product.
By Matt Ott & Haleluya Hadero; June 5, 2023
WASHINGTON (AP) — Living in New York City, working full time and without a car, Jessica Ray and her husband have come to rely on deliveries of food and just about everything else for their home. It has meant more free time on weekends with their young son, rather than standing in line for toilet paper or dragging heavy bags of dog food back to their apartment.
“I don’t even know where to buy dog food,” said Jessica Ray of the specialty food she buys for the family’s aging dog.
There are millions of families like the Rays who have swapped store visits for doorstep deliveries in recent years, meaning that contentious labor negotiations now underway at UPS could become vastly more disruptive than the last time it happened in 1997, when a scrappy upstart called Amazon.com became a public company.
UPS delivers millions more packages every day than it did just five years ago and its 350,000 unionized workers, represented by the Teamsters, still seethe about a contract they feel was forced on them in 2018.
In an environment of energized labor movements and lingering resentment among UPS workers, the Teamsters are expected to dig in, with the potential to cow a major logistical force in the U.S.
The 24 million packages UPS ships on an average day amounts to about a quarter of all U.S. parcel volume, according to the global shipping and logistics firm Pitney Bowes, or as UPS puts it, the equivalent of about 6% of nation’s gross domestic product.
Higher prices and long wait times are all but certain if there is an impasse.
“Something’s got to give,” said Thomas Goldsby, logistics chairman in the Supply Chain Management Department at the University of Tennessee. “The python can’t swallow the alligator, and that’s going to be felt by all of us.”
In other words, brace yourself for Supply Chain Breakdown: The Sequel.
In the second half of 2021, the phrase “global supply chain” began to enter casual conversations as the world emerged from the COVID-19 pandemic. Businesses struggled to get what they needed, raising prices and wait times. Automakers held vehicles just off the assembly line because they didn’t have all the parts.
Some of those problems still linger and a strike at UPS threatens to extend the suffering.
Those who have come to rely on doorstep deliveries for the basic may have to rethink weekly schedules.
“We finally reached a point where we finally feel pretty good about it,” Ray said. “We can take a Saturday afternoon and do a fun family activity and not feel the burden of making everything work for the day-to-day functioning of our household.”
UPS workers feel they have played a part in the transformation of how Americans shop since the last contract was ratified in 2018, while helping to make UPS a much more valuable company.
Annual profits at UPS in the past two years are close to three times what they were before the pandemic. The Atlanta company returned about $8.6 billion to shareholders in the form of dividends and stock buybacks in 2022, and forecasts another $8.4 billion for shareholders this year.
The Teamsters say frontline UPS workers deserve some of that windfall.
“Our members worked really hard over the pandemic,” said Teamsters spokesperson Kara Deniz. “They need to see their fair share.”
Union members rejected the contract they were offered in 2018, but it was pushed through by union leadership based on a technicality. The acrimony over the current contract was so fierce that last year workers rejected a candidate to lead the Teamsters favored by longtime union head James Hoffa, instead choosing the more combative Sean O’Brien.
O’Brien went on a nationwide tour of local Teamsters shops preparing frontline workers ahead of negotiations.
In addition to addressing part-time pay, and what workers say is excessive overtime, the union wants to eliminate a contract provision that created two separate hierarchies of workers with different pay scales, hours and benefits. Driver safety, particularly the lack of air conditioning in delivery trucks, is also in the mix.
A win at UPS could have implications for the organized labor outside the company.
Teamsters are attempting to organize Amazon workers and dozens of company delivery drivers and dispatchers in California joined the union last month. There are also prominent labor organization campaigns at Apple, Starbucks, Trader Joe’s, Apple, even strippers at a dance club in Los Angeles.
“This has just huge implications for the entire labor movement in the United States,” said John Logan, the director of labor and employment studies at San Francisco State University, referring to labor talks at UPS. “There’s greater assertiveness and militancy on the part of a lot of young labor activists and some sectors of the labor establishment. Sean O’Brien is representative of that.”
When dozens of UPS locals met with Teamsters leadership early this year, O’Brien delivered a message of urgency.
“We’re going into these negotiations with a clear message to UPS that we’re not going past August 1,” O’Brien told the gathering.
It would be the first work stoppage since a walkout by 185,000 workers crippled the company a quarter century ago.
UPS CEO Carol Tomé has remained optimistic publicly, telling investors recently that the company and the Teamsters were not far apart on major issues.
“While we expect to hear a great deal of noise during the negotiation, I remain confident that a win-win-win contract is very achievable and that UPS and the Teamsters will reach agreement by the end of July,” Tomé said.
If Tomé is wrong, Americans may need to put aside more time to shop like they used to do.
“It has the potential to be significantly impactful,” Ray said. “My husband and I have invested a lot in figuring out how to remove the burden of just making sure we always have toilet paper.”
Photo: Frank Deanrdo