Teamsters announced Friday that United Parcel Service workers have authorized their union, the International Brotherhood of Teamsters, to call a strike on August 1.
The Teamsters represent more than 325,000 UPS employees in the United States, where the company has about 450,000 employees overall. union said 97 percent voted in favor Strike authority.
Many unions hold such votes in order to create leverage at the bargaining table, but are eliminated after a very small percentage. “The results do not mean a strike is imminent and do not affect our current business operations in any way,” UPS said in a statement, adding that “we are confident we will reach a settlement.”
A UPS strike could have significant economic consequences. The company handles about one-quarter of the millions of parcels shipped daily in the United States, according to the Pitney Bowes Parcel Shipping Index. And while UPS’s competition has increased in recent years, rivals will be hard-pressed to quickly replace that lost capacity, leaving some customers in the lurch and others facing higher costs.
“What happens when you try to stuff 25 percent more food into a stomach that is 90 percent full?” said Alan Amling, a fellow at the University of Tennessee’s Global Supply Chain Institute and former UPS executive.
Since starting talks on a national contract in April, the two sides have reached tentative agreements on a range of issues, most recently on heat protection, including a Requirements for Air Conditioning Additional fans and venting in new trucks starting in January and for existing trucks.
But negotiators have yet to settle a pay increase, which Teamsters say is overdue amid the company’s strong pandemic-era performance. The company’s adjusted net income grew by more than 70 percent from 2019 to the previous year.
The union has again focused attention on pay disparities for a category of driver that typically works on weekends.
UPS chief executive officer Carol Tomey, who started in that position in 2020, recently said income call UPS was aligned with the union on “several key issues”. He added that outsiders should not put too much stock in the “great noise” generated during the conversation.
The political position of Teamsters leader Sean O’Brien is dominating the talks, who repeatedly accused his predecessor, James P. Hoffa, of over-compromising employers during his campaign for the union’s presidency in 2021. Imposed.
Mr. O’Brien complained that Mr. Hoffa essentially forced a subsidized contract on UPS employees in 2018 after union members rejected the deal. He criticized his opponent for the presidency, the Hoffa-coalition candidate, as unlikely to strike.
“You’ve already admitted that in your 25-year career, you’ve only struck six times, so UPS knows you’re not going to strike,” Mr O’Brien said. candidate debate,
Mr. O’Brien has largely maintained his aggressive stance on UPS since taking over as chairman last year. Speaking in October to workers from Teamsters for a Democratic Union, a reformist group that endorsed his candidacy, Mr. O’Brien vowed that “this UPS agreement is going to be a defining moment in organized labor.”
Compensation for UPS drivers is generally higher than the salaries of the company’s competitors. UPS said the average full-time delivery driver with four years of experience makes $42 an hour, and part-time employees who sort packages earn an average of $20 an hour after 30 days.
The company says the groups receive the same benefits package, which includes health care and pension contributions and is worth about $50,000 per year for full-time drivers.
Beyond overall pay levels, the union has said it wants to eliminate a category of driver created under the 2018 contract.
The company said the category was intended for hybrid workers who performed tasks such as sorting packages on certain days while driving on other days, especially Saturdays, to meet the increased demand for weekend deliveries.
But the Teamsters said these workers never followed the hybrid arrangement and drove full time Tuesday through Saturday for less pay than other full-time drivers. The company says weekend drivers earn about 87 percent of the base pay of regular full-time drivers, and that some employees work under a blended arrangement.
In the event of a strike, delivery to consumers, such as e-commerce orders, will probably be the first to be disrupted. But experts said supply chains could also suffer. Some suppliers will struggle to quickly ship goods such as automotive parts to manufacturers, potentially causing production slowdowns.
Even a small strike can have an effect on the UPS. Mr. Amling said many customers had long relied exclusively on the company, but that began to change after the Teamsters last went on strike in 1997. After that strike, which lasted just over two weeks, more customers began working with multiple carriers. The results were overshadowed by the rise of e-commerce and the advantage of having fewer competitors to choose from, but the company may not be so lucky today.
Neeraj Choksi Contributed reporting.