This week’s free brief is written by one of our industry experts, Thomas Cullen, discussing how UPS Teamsters vaguely threaten strikes in major contract negotiations. Published 7th June 2018 in Logistics Briefing – sign up to receive FREE news & briefs weekly click here 

  • There are suggestions of strikes at UPS over wage negotiations
  • UPS brief journalists no immediate action is expected
  • Issues at the heart of discussions concern changing nature of last mile operations, including job intensity and overtime
  • Outcome vital to UPS in long run

The International Brotherhood of Teamsters, a trade union that represents 280,000 workers at UPS in the US, released a statement on Wednesday asserting that “UPS and UPS Freight Teamsters have approved giving their respective negotiating committees the right to call a strike, if necessary. The UPS members authorized a strike, if necessary, by a 93 percent margin. At UPS Freight, the margin was 91 percent”.

UPS are briefing journalists that the strike approval is a tactic to attract media attention and that there is no immediate threat of action. There are also suggestions that the leadership of the Teamsters is fearful of criticism within the Union of not bargaining aggressively enough.

UPS and the Union are negotiating about a new set of contracts, generally known as the ‘national master agreements’, which are complex and cover not just delivery and truck drivers but warehousing and sortation staff at hubs and maintenance workers on aircraft. The present national master agreement was agreed five years ago and expires at the end of July.

Issues being discussed reflect the changing nature of UPS, with more intense last-mile operations and greater seasonality creating a requirement for more flexibility from UPS’ workforce. Overtime in particular is an issue, especially during the lead-up to Christmas. One item being intensely debated is the concept of ‘hybrid drivers’. This is an idea to employ package handlers working at hubs as drivers at weekends, especially during the peak season.  The expansion of such workers would lessen the need for full-time drivers to work overtime at weekends and ultimately reduce costs by avoiding overtime rates. Whilst the comparatively well-paid full-time ‘brown-truck’ drivers welcome the potential to reduce their often substantial and obligatory overtime burden, they are nervous about lower-cost workers eating into their lucrative driving jobs. 

These issues are vital for UPS in the long-run. It is under pressure to respond to Amazon’s ambitions in the last-mile sector, whilst over the past couple of years, UPS’ profits have been hit by poor capacity management of e-retail driven demand. Getting the mix of cost and flexibility right will have a significant impact on their results over the next five years.

Source: Transport Intelligence, June 7, 2018

Author: Thomas Cullen












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