Teamster agrees with UPS to avoid major strike

WASHINGTON — UPS reaches tentative deal with 340,000-strong labor union, potentially averting strike. There is a risk of confusion in logistics nationwide both for businesses and households.

The agreement was announced on Tuesday, the first day UPS and Teamsters agreed. back to the table After talks broke down earlier this month, the two sides are set to discuss the remaining conundrums of North America’s largest private-sector contract. Negotiators had already reached tentative agreements on many issues, but clashes continued over the salaries of part-time workers, who make up more than half of the UPS employees represented by the union.

Teamsters called the agreement “historic”.

Under the interim agreement, existing full-time and part-time UPS members will receive an additional $2.75 per hour in 2023 and $7.50 per hour for the duration of the five-year contract. The agreement also includes provisions to increase starting salaries for part-time workers. The union argued that part-time workers were at the highest risk of exploitation among the company’s employees. Starting wages for part-time workers will be $21 an hour, up from the current $16.20. The company said the average wage for a part-timer was $20.

Sean M. O’Brien, president of Teamsters General, said the negotiations resulted in UPS injecting $30 billion in new funding.

“This deal sets new standards for the labor movement and raises the bar for all workers,” he said in a statement.

The two countries had already tentatively agreed to make Martin Luther King Jr. Day a full holiday and eliminate forced overtime for drivers on holidays. A tentative agreement was also reached on safety issues, including equipping more trucks with air conditioning.

UPS also agreed to eliminate the low-wage category of shift work, including weekends, and convert it to regular full-time drivers. The company also plans to create 7,500 full-time jobs and fill 22,500 vacancies, potentially allowing more part-timers to transition to full-time jobs.

“Together, we have reached a win-win-win agreement on issues that are important to Teamsters management, employees and to UPS and our customers,” UPS CEO Carol Tomé said in a written statement. “This agreement will continue to provide industry-leading salaries and benefits to UPS full-time and part-time employees, while maintaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

Voting on the new contract will begin on August 3rd and end on August 22nd.

In Washington, President Joe Biden applauded the two sides for reaching an agreement.

“This agreement is a testament to the power of employers and employees to come together to resolve differences at the bargaining table, helping companies succeed while ensuring workers have wages and benefits to support their families and to leave with dignity and respect,” Biden said in a statement.

With the delivery company’s profits soaring in recent years, union members have clashed with UPS over wages, furious over contracts allegedly enforced by union leadership five years ago. The union leadership was upended last year with the election of Sean O’Brien, who has been a vocal critic of the contracted union president, son of James Hoffa, the famous Teamsters firefighter brand.

UPS’s profits have increased more than 140% since the last deal was signed as the arrival of the deadly pandemic dramatically changed the way Americans get what they need.

The unionized workers, who claimed they were responsible for the growth of the Atlanta company, seemed intent on fixing what they deemed to be bad contracts.

UPS ships an average of 24 million packages a day, equivalent to about a quarter of all packages in the United States, according to global transportation and logistics company Pitney Bowes. According to UPS, this represents about 6% of the gross domestic product.

The last labor-management breakdown a quarter-century ago resulted in a 15-day strike by 185,000 UPS employees. paralyzed the company. At a time when millions of Americans are accustomed to online shopping and fast delivery, the strike will have far-reaching effects.

Consulting firm Anderson Economic Group said the UPS 10-day strike cost the U.S. economy more than $7 billion and may have caused “substantial and lasting damage” to small businesses, domestic workers and online retailers across the country.

Logistics experts warned that other carriers combined would not have the capacity to handle the influx of packages during the UPS shutdown, which would ultimately drive up shipping costs and commodity prices. Customers who shop online could face higher shipping charges and longer waiting times.

Over the past few weeks, both large and small businesses have been working to develop contingency plans in the event of a UPS strike.

Small business owner Joseph Devicella, who runs an online site that sells bridesmaid gifts, said about 50% of his company’s orders are shipped through UPS. He had never used FedEx before, but created an account with the company two weeks ago due to the buzz around the strike. He said he had heard from UPS drivers about the negotiations and that deliveries were slowing down as the July 31 deadline for the new contract approached.

Devicella, who lives in Charlotte, N.C., said she was concerned about cost because the site offers free shipping to customers who spend $99 or more.

Macy’s CEO Jeff Gennett told The Associated Press that the department store chain is reviewing contingency plans in the event of a strike, and that the department store’s supply chain team is planning what a strike might look like and how it will affect deliveries.

The deal, which has roiled retailers during the second-biggest shopping season after the winter holidays, could prevent major logistical disruptions.

The Retail Industry Leaders Association, a national retail trade association whose membership includes retailers such as Best Buy, CVS Health and Kohl’s, said the interim agreement was “a great relief for retailers who have been navigating weeks of possible strikes and the uncertainty that comes with them.”

“Over the past few years, we have learned a great deal about the impact of supply chain disruptions,” the group said in a statement. “We are grateful that we have avoided a challenge that would have cost us billions of dollars and would have required a long road to recovery.”

Labor experts see the showdown as a labor show at a time of low U.S. union membership, but it’s been very lively this summer after a series of organized worker pressures at giants like Starbucks.

Hollywood actors and screenwriters are picketing over compensation issues. The National Auto Workers Union also potential strike.

“This is how we do it!” Cabin Crew Association-CWA President Sarah Nelson issued a statement congratulating Teamster on signing. “And the solidarity of workers this summer has become even stronger.”