- UPS Freight and its unionized employees have reached a standstill in contract negotiations.
- UPS Freight’s 11,000 truck drivers may be on strike by Monday if they do not approve UPS Freight’s final contract offer.
- As a result, UPS Freight is slowing deliveries in preparation for a potential strike.
- It would be the first UPS strike since 1997.
UPS Freight is clearing all its shipments this week to ensure its network is empty by Friday. That’s because its 11,000 drivers, who are represented by a Teamsters union, may be on strike by Monday.
“The company has now begun discussions with UPS Freight customers to inform them of the potential for service disruption and the need to arrange alternative carriers,” UPS said in a statement emailed to Business Insider.
UPS Freight and the Teamsters Freight National Bargaining Committee have reached a standstill on contract negotiations. Every five years, the two parties negotiate a labour contract applying to UPS Freight’s drivers.
On Wednesday, Teamsters members across the country began voting on UPS’s “last, best, and final offer” contract, a Teamsters representative told Business Insider. The votes will be tallied on Sunday.
If a majority does not approve the contract, UPS Freight drivers won’t work on Monday. It would be the first UPS strike since 185,000 employees held a 16-day walkout in 1997.
The drivers’ negotiating committee is demanding restrictions on subcontracting, higher wage increases, better pay for drivers who perform dock work, an elimination of certain requirements for pension and vacation benefits, and other protections, a statement the Teamsters sent Business Insider said.
UPS has responded to certain Teamsters negotiation demands. For instance, the threshold for workers to qualify for a year of pension credit was maintained at 1,500 hours; UPS tried to raise that to 1,800.
The negotiating committee said in a statement that the changes are not enough. Members have already approved a strike, which they called “a last resort.”
A UPS representative said in the emailed statement that the company felt the contract was fair and highly competitive.
“It is an offer that rewards our employees with wages and benefits at the top of the industry and compensates them for their contributions to the success of the company,” UPS said in the statement. “We are disappointed that the Freight Teamsters union leaders have chosen to announce the potential for a strike, should their members vote ‘no’ on the offer.”
A strike would most likely jack up the prices of your holiday shipments
An increase in transportation costs in 2018 has delayed shipments and jacked up the final price of goods, passed down to consumers from companies like Amazon and General Mills.
A shutdown of UPS Freight would exacerbate that. Shippers who typically rely on the service would have to quickly find a last-minute alternative, which would likely be more expensive.
According to the industry publication FreightWaves, should the strike occur, shippers’ on-time performance could fall by 5-10%, and small-to-midsize businesses could see price increases of 10-20%.
UPS Freight comprises the company’s less-than-truckload sector, where multiple shippers share a truck’s space to ship packages. It generated $US2.6 billion in revenue last year and moved 2.8 billion pounds of goods in the last quarter, FreightWaves reported.
UPS Freight differs from the small-package unit that consumers most typically interact with – those 250,000 UPS drivers are covered by an already negotiated labour contract, so “customers can remain confident” that service will remain normal, UPS said.
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