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Union Members at UPS Ratify Five-Year Agreement After Intense Negotiations Threatening Service Disruption

by Lucas Garcia
5 comments
UPS contract negotiations

The labor union that represents 340,000 UPS employees announced on Tuesday that its members had given their approval to a preliminary contract agreement that was struck last month. This approval finalizes a bitter and intense period of labor negotiations that had the potential to halt package deliveries to millions of businesses and homes across the country.

In a statement, the Teamsters Union declared that 86% of the votes cast were in support of ratifying the nationwide contract. It was emphasized that this marked the highest voting approval for any contract in the history of the Teamsters’ relationship with UPS.

Additionally, the union ratified over 40 supplemental agreements, excluding one that pertains to around 170 members in Florida. The national master agreement is set to become effective immediately once that particular supplement is renegotiated and ratified.

UPS has indicated that the results of the voting for agreements that cover employees under two local branches will be announced in the near future.

Teamsters General President Sean M. O’Brien lauded the contract, describing it as the most lucrative deal ever negotiated at UPS by the union. “This contract will enhance the lives of hundreds of thousands of workers,” he said, noting that it establishes new benchmarks for wages and benefits.

O’Brien also gave a warning to nonunion companies such as Amazon, saying, “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better take heed.”

Voting on the new five-year contract commenced on Aug. 3 and came to a conclusion on Tuesday.

Tense negotiations led to a breakdown in early July, but Atlanta-based UPS managed to reach a tentative contract agreement with the Teamsters just before the Aug. 1 deadline. This occurred as businesses large and small were developing backup plans to deal with a potential strike, an event that would have driven up shipping costs and created chaos in supply chains.

UPS, whose revenue dropped in the second quarter amid the union negotiations, has also felt the effects of inconsistent consumer spending in the shipping industry. The company has reduced its full-year revenue predictions by $4 billion and previously stated that it anticipated a return to bargaining if members had rejected the deal. Rejection could have also paved the way for a strike, leading to broad disruption.

Under the agreed terms, both full- and part-time union employees will receive a pay increase of $2.75 per hour in 2023, totaling $7.50 more by the end of the five-year contract period. Part-time starting pay has been raised to $21 per hour, although some workers have expressed dissatisfaction with this amount.

According to UPS, by the end of the new contract, an average full-time driver at UPS will earn roughly $170,000 annually, including pay and benefits. The exact breakdown of this figure has not been clarified.

As part of the agreement, UPS will acknowledge Martin Luther King Jr. Day as a full holiday, end mandatory overtime on drivers’ off-days, cease the use of driver-facing cameras in vehicles, and address other matters. The company also eliminated a two-tier wage system for drivers and made tentative agreements on safety issues, including the addition of air conditioning in more trucks.

Union members, frustrated by a contract they perceived as being imposed on them five years ago, have insisted that the over 140% profit growth at UPS during the pandemic be reflected in their contract. They were keen to rectify what they viewed as a flawed agreement, previously signed by a prominent Teamsters leader in 2018.

UPS, responsible for shipping 24 million packages daily, accounts for nearly a quarter of all U.S. parcel volume, equivalent to about 6% of the country’s GDP, according to global shipping and logistics firm Pitney Bowes.

This is not the first labor disagreement between the union and the delivery company. A quarter of a century ago, a breakdown in talks led 185,000 UPS workers to strike for 15 days, severely hampering the company’s operations.

A strike at this juncture would have far-reaching consequences, especially since millions of Americans rely on online shopping and swift delivery. Analysts at Anderson Economic Group estimated that a 10-day strike at UPS could have inflicted more than $7 billion in damages on the U.S. economy, causing “significant and lasting harm” to businesses and workers.

Observers in the labor field interpret this confrontation as a strong display of union power in a period of declining U.S. union membership. Similar disputes have been observed this summer among Hollywood actors, screenwriters, and auto workers.

UPS CEO Carol Tomé, expressing satisfaction with the agreement, said, “Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees, and to UPS and our customers.”

The deal has also drawn praise from various industry groups, the U.S. Chamber of Commerce, labor leaders, and President Joe Biden.

Frequently Asked Questions (FAQs) about UPS contract negotiations

What is the new agreement between UPS and the Teamsters Union?

The new agreement is a five-year contract that was ratified by the union representing 340,000 UPS workers. It includes wage increases, improved benefits, and additional provisions such as making Martin Luther King Jr. Day a full holiday and ending forced overtime on drivers’ days off. The contract was approved by 86% of the votes cast, marking the highest approval in the history of the Teamsters’ relationship with UPS.

When did the voting on the new five-year contract begin and conclude?

Voting on the new five-year contract began on August 3 and concluded on Tuesday.

What would have been the impact of a strike by UPS workers?

A strike would have had far-reaching implications, disrupting package deliveries to millions of businesses and households nationwide. It could have driven up shipping costs and created chaos in supply chains. Analysts estimated that a 10-day strike at UPS could have inflicted more than $7 billion in damages on the U.S. economy.

What are the pay increases under the new contract for UPS workers?

Under the agreed terms, both full- and part-time union employees will receive a pay increase of $2.75 per hour in 2023, totaling $7.50 more by the end of the five-year contract period. Part-time starting pay has been raised to $21 per hour.

How many packages does UPS ship daily, and what percentage of U.S. parcel volume does that represent?

UPS ships 24 million packages daily, amounting to nearly a quarter of all U.S. parcel volume, equivalent to about 6% of the country’s gross domestic product.

Was this the first labor disagreement between UPS and the Teamsters Union?

No, this was not the first labor disagreement between the two parties. A quarter of a century ago, a breakdown in talks led 185,000 UPS workers to strike for 15 days, severely hampering the company’s operations.

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5 comments

Bill.J August 23, 2023 - 5:20 am

UPS says by end of the new contract avg full-time driver will make about 170,000 annually! that’s some good money for driving. good on them for sticking up for what they deserve!

Reply
Megan R August 23, 2023 - 8:10 am

My cousin works for UPS and he says the workers are pretty happy with the new deal. Makes sense with those pay increases. Wonder what amazon thinks about all of this?

Reply
John Smith August 23, 2023 - 11:36 am

Finally, the UPS workers get what they deserve! Great to see the union standing up for them, but what’s with the pay bump for part-timers? Seems low to me.

Reply
Tom43 August 23, 2023 - 4:19 pm

Took them long enough to negotiate, hope it’s fair for everyone. these negotiations can get real ugly, real fast.

Reply
Sally T August 23, 2023 - 9:26 pm

I can’t imagine what would have happened if they’d gone on strike, my business relies on UPS. glad it’s resolved, things are shaky enough with the economy.

Reply

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