Live from the ACC: UPS Chief Says Strike Unlikely

Chicago–United Parcel Service chairman/CEO Mike Eskew says that catalogers shouldn’t worry about the ongoing contract negotiations between UPS and the International Brotherhood of Teamsters. “We’re confident we’ll get it done,” Eskew said yesterday in an exclusive interview with CATALOG AGE here at the Annual Catalog Conference. The Teamsters contract with the parcel carrier expires July 31.

Referring to the Teamsters strike of 1997, which paralyzed UPS for nearly two weeks, Eskew said, “The last go-round had a lot to do with what was right for [former Teamsters leader] Ron Carey. So he called a strike. But he’s no longer there. Now it has a lot to do with what’s right for the Teamsters and for UPS. Yes, they’ll negotiate hard to give their people the best contract, but I think this is going to be a ‘what is right for the people’ contract.”

Eager to avoid another strike, the union and UPS began their current labor negotiations in January. “Last time, we didn’t even do anything until at least June,” Eskew said. “And this time, the Teamsters have said all the way through that they’d like to work this thing out in a timely manner.”

Eskew did warn, however, that its customers will likely have to pay a price for the labor negotiations. The new contract will “increase some cost elements,” he said, and a rate increase in early 2003 is likely. Then again, February rate increases have been the norm for UPS for more than a decade.

Whereas UPS once owned a 75%-plus share of the catalog market for standard package deliveries, Catalog Age’s Benchmark Reports indicate that it now commands about 55% of the market. To regain catalog market share, especially in the face of mounting competition from the U.S. Postal Service, which is expected to unveil delivery confirmation tracking this summer for its Parcel Select service, Eskew said UPS is relying on technology.

“We’re working with catalogers to drive efficiencies to their networks so that they can move as many packages to our ground service as possible and find ways to optimize their supply chains,” Eskew said. “Nobody competes with our inventory, fulfillment, returns, site locators, and the whole level of service in terms of number of delivery attempts and what we do with some of our other new businesses.”

And in addressing a touchy subject–the alleged arrogance of UPS reps in dealing with smaller mailers–Eskew said he’s never heard of such complaints. “I don’t hear the word ‘arrogance,’” he said. “We talk a lot about creating solutions with our reps, and our approach has changed over time, and the way we look at customers’ needs in terms of sales resources.”

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