UPS contract talks are heading down the wire as a potential strike looms

Barely a week before the contract of more than 325,000 United Parcel Service workers expires, union and corporate negotiators have yet to reach an agreement to avert a strike that could fracture the US economy.

UPS and the union, Brotherhood International, have resolved a variety of thorny issues, including heat safety and forced overtime. But they remain deadlocked over pay for part-time workers, who account for more than half of union workers at UPS.

The strike, which could come as soon as August 1, could have serious consequences for the company, the e-commerce industry, and the supply chain.

UPS handles about a quarter of the tens of millions of packages shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index. Experts said competitors lack the scale to seamlessly replace this lost capacity.

The Teamsters point to the risks its members have taken to help generate the company’s strong performance in the era of a pandemic as a reason why they deserve big raises. UPS’ adjusted net income rose more than 70 percent between 2019 and last year, to more than $11 billion.

Contract talks collapsed on July 5 due to slander. The two sides are scheduled to resume negotiations in the coming days, but the window is narrow to reach an agreement before the current five-year contract expires.

in Facebook share This month, the union said the company’s latest bid would have “left behind” several part-time workers, whose jobs include sorting packages and loading trucks. The post said that part-time workers earn “nearly the minimum wage in many parts of the country.”

UPS, which says it relies heavily on part-time workers to navigate bursts of activity throughout the day and to ramp up its workforce during the busiest months, said it proposed big pay increases before talks broke down. According to the company, part-time workers currently earn about $20 an hour on average after 30 days plus paid vacation, healthcare, and retirement benefits. The company noted that many of the part-time workers graduated to jobs as full-time drivers, paying an average of $42 an hour after four years.

The union has done its best to highlight the challenges facing part-time workers. In TV interviews and at rallies, Teamsters president Sean O’Brien emphasized what’s what union calls Part time poverty jobs. He was often joined by union leaders and other politicians, including Democratic Rep. Alexandria Ocasio-Cortez of New York.

UPS said Wednesday that it is “ready to increase our industry-leading salary and benefits.” But it is unclear whether the company will meet the union’s demands.

“UPS certainly would like to strike a deal, but not at the expense of its long-term competitiveness,” said Alan Amling, former UPS executive director and fellow at the University of Tennessee’s Global Supply Chain Institute.

Professor Amling has estimated that a $5 an hour wage increase would cost the company $850 million annually for all the part-time employees represented by the Teamsters.

which company Usually reports Its second-quarter earnings in late July delayed reporting this year beyond the strike deadline. UPS said the timing was within the window required to report its earnings and that it never published a date other than August 8 for the upcoming release.

The sometimes volatile negotiations began in April, and the Teamsters announced in mid-June that UPS members had voted, by 97 percent, to authorize the strike.

Less than two weeks later, the union said it was walking away from the table because of the company’s “appalling counterproposal” on cost-of-living increases and adjustments and that a strike “now appears inevitable.”

The two sides resumed their discussions in the week before July 4th and arguably the most contentious issue: the class of workers created under the existing contract was soon resolved.

UPS said the arrangement is meant to allow workers to take on dual roles, such as sorting packages on some days and driving on others — especially Saturdays — to keep up with rising demand for weekend delivery.

But the Teamsters said the hybrid idea didn’t pan out, and the new class of workers drove full-time from Tuesday to Saturday, for less than other drivers. (The company said some employees worked under the hybrid arrangement.)

Under the agreement reached this month, the low-wage category will be eliminated and workers who drove from Tuesday to Saturday will be converted to full-time regular drivers.

The agreement also stipulated that no drivers would be required to work on an unscheduled sixth day of the week, which drivers sometimes had to do to keep up with Saturday demand.

Despite the progress made on these issues, Mr. O’Brien could face a critical test of persuading members to agree to a deal if it falls short of the lofty expectations he helped set. He won first place in the syndicate in 2021 while regularly criticizing his immediate predecessor, James B. Hoffa, being more accommodating to employers.

Mr. O’Brien argued that Mr. Hoffa had actually forced UPS workers to accept a deeply flawed contract in 2018, even after they voted against it, and accused his rival in the race to succeed Mr Hoffa because of his reluctance to strike against the company.

He began focusing members’ attention on the contract and potential strike even before he officially took over as chairman in March last year, and spoke in grandiose terms of the union’s goals for a new contract.

“This UPS agreement will be the defining moment in organized labor,” he told activists with Teamsters for a Democratic Union, a group that supported his candidacy, in a speech last fall.

Mr. O’Brien’s union has held training sessions in recent months for strike leaders and members of the contract labor force, who have rallied co-workers to help put pressure on the company.

He strongly urged the White House not to enter into contract negotiations. In his Boston youth, “If two people had a quarrel, and you had nothing to do with it, you kept walking,” he said during a recent talk. Webinar with members. “We’ve echoed that to the White House on many occasions.” (Administration officials said they are in touch with both sides.)

In some ways, the context of this year’s negotiations is similar to the circumstances of the UPS National Teamsters strike in 1997. UPS was also in the midst of Several profitable yearsThe rapid growth of the part-time workforce looms large.

But while the reformist president, Ron Carey, had rallied the union to fight, its ranks appeared to be split between his own supporters and those of Mr. Hoffa, who had narrowly lost election to the union’s presidency the year before. The union may have more clout this time because its members appear more united under Mr O’Brien.

Barry Edlin, a sociologist at McGill University in Montreal who studies labor and follows the Teamsters closely, said that while the intensification of fighting in the current decade has been delayed in some parts of the country, where more conservative local officials have been less enthusiastic, Mr. O’Brien has had no serious opposition within the union.

“Not everyone is a fan of O’Brien, but they don’t organize as actively to undermine him as people were with Ron Curry in the ’90s,” said Dr. Edlin. “It’s a huge, huge difference.”

Yet for all his hard-line statements, Mr. O’Brien remains an institutional figure who seems to prefer an agreement to a strike, and has acted skilfully to reduce the likelihood of it.

Earlier in the negotiations, Mr. O’Brien said that UPS employees would not work after August 1 without an approved contract, and that the two sides needed to reach an agreement by July 5 to give members a chance to agree to it in time. But last weekend he said UPS employees would continue to work on Aug. 1 as long as the two sides reach a preliminary agreement.

“This is not a shift,” a Teamsters spokeswoman said Friday via email. “This is how you get the contract. Our pressure and our deadline on UPS have forced them to move in ways they haven’t before.”

Neeraj Chukchi Contribute to the preparation of reports.