With just a week to go before the contract for more than 325,000 United Parcel Service workers expires, union and company negotiators have yet to reach an agreement to avert a strike that could derail the U.S. economy.
UPS and the union, the International Brotherhood of Teamsters, have resolved a number of burning issues, including heat safety and forced overtime. But they remain deadlocked over pay for part-time workers, who make up more than half of UPS’ union workers.
A strike that could come as early as August 1 could have significant implications for the company, the e-commerce industry and the supply chain.
According to the Pitney Bowes Parcel Shipping Index, UPS handles about one-quarter of the tens of millions of packages that are shipped to the United States each day. Experts he said competitors lack the scale to seamlessly replace this lost capacity.
The Teamsters cited the risks their members took to help generate strong company performance during the pandemic as a reason they deserve a big raise. UPS’s adjusted net income grew more than 70 percent between 2019 and last year to more than $11 billion.
Treaty negotiations broke down in battle on July 5. The two sides are due to resume talks in the coming days, but the window for a deal before the current five-year contract expires is tight.
IN Facebook post this month, the union said the company’s latest offer “left behind” many temporary workers whose jobs include sorting parcels and loading trucks. The post says part-time workers earn “near minimum wage in many parts of the country.”
UPS, which says it relies heavily on temps to handle flurries of activity during the day and boost its workforce during busier months, said it had proposed significant wage increases before negotiations broke down. Part-time workers currently earn an average of about $20 an hour after 30 days, plus paid time off, health care and retirement benefits, according to the company. The company noted that many part-timers have transitioned into full-time driver jobs, which pay an average of $42 an hour after four years.
Unions have gone to great lengths to highlight the issues facing part-time workers. In television interviews and at rallies, Teamsters President Sean O’Brien emphasized what union calls part-time “poverty”. He was often joined by other union leaders and politicians, including Rep. Alexandria Ocasio-Cortez, a New York Democrat.
UPS said Wednesday that it is “ready to increase our industry-best wages and benefits.” However, it is not clear whether the company will satisfy the union’s demands.
“UPS certainly wants to reach an agreement, but not at the expense of its ability to compete in the long term,” said Alan Amling, a former UPS executive and fellow at the Global Supply Chain Institute at the University of Tennessee.
Professor Amling estimated that a $5 an hour wage increase for all part-time workers represented by the Teamsters would cost the company $850 million a year.
A company that reports normally its second-quarter earnings in late July delayed a report this year until after the strike period. UPS said the timing was within its required earnings reporting period and that it had never disclosed a date other than August 8 for the upcoming release.
Sometimes volatile negotiations began in April and the Teamsters announced in mid-June that their UPS members voted by a 97 percent majority to authorize the strike.
Less than two weeks later, unionists said they were walking away from the table because of the company’s “appalling counter-proposal” for increases and cost-of-living adjustments, and that strike action “now appears inevitable”.
The two sides continued their discussions the week before the Fourth of July and soon resolved what was arguably their most contentious issue: the class of workers created under the existing contract.
UPS said the measure is intended to allow workers to take on dual roles, such as sorting packages on some days and driving on other days, particularly on Saturdays, to keep up with increasing demand for weekend delivery.
But the Teamsters said the hybrid idea did not materialize, and that in practice the new category of workers drove full-time Tuesday through Saturday, only for less pay than other drivers. (The company said some employees worked in a hybrid arrangement.)
Under a deal struck this month, the lower-income category would be eliminated and workers who drove Tuesday through Saturday would be converted to regular full-time drivers.
This agreement also stipulated that no driver would be required to work an unscheduled sixth day of the week, which drivers were sometimes forced to do to meet Saturday demand.
Despite progress on these issues, Mr O’Brien could face a delicate test to convince members to approve the deal if it fails to live up to the lofty expectations he helped set. In 2021, he won the highest position in the trade union criticize regularly his immediate predecessor, James P. Hoffa, for being overly accommodating to employers.
Mr. O’Brien alleged that Mr. Hoffa effectively forced UPS workers to accept a deeply flawed contract in 2018 even though they voted for it, and he accused his rival in the race to succeed Mr. Hoffa, who has been reluctant to strike against the company.
He started focusing members’ attention on the contract and a possible strike even before he formally took over the position of president in March of last year, and he spoke in superlative terms about the union’s goals regarding the new contract.
“This UPS deal will be a defining moment in organized labor,” he told activists from Teamsters for a Democratic Union, the group that backed his candidacy, in a speech last fall.
The union, led by Mr O’Brien, has held training sessions for strike captains and members of contract action teams in recent months, rallying workers to help put pressure on the company.
And he strongly urged the White House not to engage in treaty negotiations. In his youth in Boston, “when two people disagreed and you had nothing to do with it, you just walked,” he said during a recent webinar with members. “We’ve repeated that to the White House on numerous occasions.” (Administration officials said they are in contact with both parties.)
In some ways, the context for this year’s negotiations resembles the circumstances of the Teamsters nationwide strike at UPS in 1997. UPS was also at the center of several profitable yearsand the rapid growth of its part-time workforce loomed large.
But while reformist President Ron Carey did mobilized union for the fight, its ranks seemed divided between his supporters and those of Mr. Hoffa, who narrowly lost the election for president of the union the year before. The union may have more influence this time around as its members appear much more united under Mr O’Brien.
Barry Eidlin, a sociologist at McGill University in Montreal who studies labor and follows the Teamsters closely, said that while the run-up to the current contract fight is less enthusiastic in parts of the country where more conservative local officials are, Mr. O’Brien was not seriously opposed within the union.
“Not everyone is a fan of O’Brien, but they’re not actively organizing to undermine him like people did with Ron Carey in the 1990s,” said Dr. Eidlin. “It’s a huge, huge difference.
For all his pugilistic statements, Mr O’Brien remains an establishment figure who appears to prefer a deal to a strike, and he has quietly acted to make one less likely.
Earlier in the negotiations, Mr. O’Brien said UPS employees would not work after Aug. 1 without a ratified contract and that the two sides must reach an agreement by July 5 to give members a chance to approve it in time. But he said last weekend that UPS employees would resume work on Aug. 1 if the two sides reached a tentative agreement.
“This is not a shift,” a Teamsters spokeswoman said via email Friday. “That’s how you get a contract. Our pressure and UPS deadlines forced them to move in a way they hadn’t before.”
Niraj Chokshi contributed reporting.
