Negotiations for a new labor contract between UPS and the Teamsters collapsed this morning, with each side blaming the other for walking away from the table.
The Teamsters had demanded that UPS make its “last, best, and final” contract offer by Friday. That means an offer that includes all concessions UPS is willing to make, to be evaluated by the union. This was an artificial deadline the Teamsters created days earlier. The current contract does not expire until July 31, so the sides still have over three weeks to negotiate.
Unsatisfied with UPS’s offer, the Teamsters put out a statement this morning saying that UPS walked away from the table at 4 a.m. UPS put out a statement saying it was the Teamsters who had walked away and that UPS was still happy to continue negotiations. The Teamsters’ statement said that no further negotiations are currently scheduled.
The Teamsters have already voted to authorize a strike, which means they are free to strike if a new contract is not agreed to by the end of the day on July 31. Teamsters president Sean O’Brien has been clear about his willingness to strike against UPS even before he became union president in 2022. “The largest single-employer strike in American history now appears inevitable,” he said last week.
O’Brien continued:
Executives at UPS, some of whom get tens of millions of dollars a year, do not care about the hundreds of thousands of American workers who make this company run. They don’t care about our members’ families. UPS doesn’t want to pay up. Their actions and insults at the bargaining table have proven they are just another corporation that wants to keep all the money at the top. Working people who bust their asses every single day do not matter, not to UPS.
UPS is one of the only large private-sector employers in the country that currently has and has desired to maintain a relatively positive relationship with a labor union. While the percentage of the workforce that is unionized has been declining for years, hitting a record low in 2022, UPS has added thousands of Teamsters jobs and currently employs around 340,000 Teamsters members, by far the most of any single company. The last time the Teamsters struck against UPS, in 1997, there were only about 180,000 Teamsters at the company.
UPS said in its statement, “Refusing to negotiate, especially when the finish line is in sight, creates significant unease among employees and customers and threatens to disrupt the U.S. economy. Only our non-union competitors benefit from the Teamsters’ actions.”
Those non-union competitors, FedEx chief among them, have been warning customers about labor strife at UPS for months. FedEx was urging UPS customers to switch carriers back in March, saying that it was prepared to handle the excess volume if shippers switched far enough in advance of a strike. And Amazon, currently UPS’s largest customer, now has its own delivery service and could speed up its efforts to move more shipments in-house in response to a strike.
Logistics expert Satish Jindel told CNN that after the 1997 strike, UPS was able to regain 90 percent of its pre-strike volume. This time, in a more competitive market, he expects the company would only gain back 70 percent.
UPS and the Teamsters had already made an agreement on air-conditioning in delivery vans, which was hyped as a major issue earlier in negotiations. Both the union and the company praised that deal earlier this month.
As I noted in the Morning Jolt on June 19, that deal was hyped by the media, likely for its sensational value, but it couldn’t be too crucial to negotiations, for the simple fact that many of the Teamsters-represented employees at UPS are not drivers. The Teamsters represent at least as many UPS warehouse workers as UPS drivers. Warehouse workers tend to be lower paid than drivers, and they probably don’t care a whole lot about whether drivers have air-conditioning. Now the Teamsters are emphasizing pay raises as the sticking point in negotiations, which were probably the sticking point all along. Neither side has revealed publicly exactly what the pay offer was.
If the Teamsters refuse to return to the negotiating table, even though the two sides still have until the end of the month to reach a deal, they will be embracing the same tactic they are currently using against less-than-truckload (LTL) carrier Yellow. Despite the obstructionism against UPS and Yellow, the Teamsters did reach a deal for a labor contract with LTL carrier ABF Freight on Friday. ABF is one of the three remaining major unionized LTL carriers, along with Yellow and TForce. Thirty years ago, there were nine major unionized LTL carriers that accounted for three-fifths of the market. Now, the three that remain hold less than a quarter.
In addition to the UPS strike in 1997, the Teamsters struck against 23 LTL carriers in 1994. With these topics in the news again, shippers are saying they feel like it’s the ’90s again — and not in a nostalgic way. Most of those 23 LTL carriers aren’t in business anymore, and the non-unionized firms that dominate the market now intend to stay non-union, viewing the experiences of the unionized LTL carriers as cautionary tales.
The trucking industry has moved on from the Teamsters-dominated 1970s, when federal-government prohibitions on competition between firms meant the Teamsters could ask for just about anything they wanted. A minor win for the Teamsters at non-union carrier XPO was reversed last week when XPO employees near Miami voted to decertify the Teamsters after only two years of representation. Their last stronghold is UPS, and now that relationship could be falling apart as well.