With negotiations between the International Brotherhood of Teamsters and UPS having failed so far, here's what could happen if a strike occurs on August 1.
According to the global shipping firm Pitney Bowes, UPS delivers 37% of the United States's total parcel volume, which is an average of over 21 million packages a day. UPS claims it represents the equivalent of about 6% of the nation’s gross domestic product. It has only increased since the pandemic, as the company delivered roughly 10 million parcels fewer each day in the years leading up to 2020.
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TEAMSTER PRACTICE PICKETS SPREAD TO MORE UPS BARNS ✊
— Teamsters (@Teamsters) June 29, 2023
In overwhelming numbers, @UPS locals and rank-and-filers are answering the call to action by the #Teamsters National Negotiating Committee to assemble practice picket lines all over the country. #1u pic.twitter.com/5X6BnyexCK
The rest of the parcel market is made up of FedEx with 33%, the U.S. Postal Service with 16%, and Amazon Logistics with 12%. During the last UPS strike 25 years ago, competitors to UPS benefited. The U.S. Postal Service saw a $450 million increase in revenues in 1997, and FedEx received an additional 15% of the shipping volume.
Even three months after the 15-day strike, UPS volume was down 2%, not to mention the backlog of 90 million packages that met employees once the strike was over. Thousands of employees still opted not to return at all, even when UPS struck a deal with the Teamsters.
Americans were seemingly not bothered by the slowdown in package delivery during the 1997 strike, as 55% supported it while 27% did not, according to a Gallup poll performed at the time.
This time around, there are more carrier options than there were 25 years ago, especially as retailers such as Walmart and Target ramp up their own delivery services. Most stores also now feature a pick-up option as well.
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UPS has been negotiating with the Teamsters, representing some 340,000 workers across 176 unions, since April. Both came to an agreement on 55 non-economic issues on June 19, but it remains to be seen when the two will agree on wage negotiations.
In 2022, UPS shipped 5.2 billion parcels, which earned it the highest carrier revenue at $73 billion. This comes after a 5.5% increase in revenue year-over-year, compared to FedEx's 5% growth. Meanwhile, USPS did not increase in revenue but remained flat.