Two separate reports paint a portrait of the once-robust e-grocery market continuing to face challenges, one that has never been the same since the pandemic lockdowns lifted and consumers returned to physical stores en masse for everyday essentials. It goes against rosy predictions of hockey-stick growth from three years ago, even though gains have mostly held.
UPS has begun training nonunion workers among the manager ranks to step in as drivers and package handlers, should a contract settlement with the Teamsters fail to materialize before the July 31 deadline, a move that has angered the union as talks remain stalled with about two weeks remaining. The union president also said they don’t want or need the White House to mediate in the talks.
Can UPS and the Teamsters reach agreement in time? Should UPS meet the union’s demand for higher part-time worker pay, or leave its last offer on the table? Is there a joint realization that too much is at stake? And if it happens, how will other carriers pick up the slack? We discuss all this with Gaston Curk, CEO of postal consolidator OSM Worldwide in this MCM CommerceChat podcast.
The U.S. Postal Service this week launched a new service called Ground Advantage that seeks to win back some of the parcel volume lost to FedEx and UPS when the major carriers insourced much of what they once handed to USPS Parcel Select Ground, which is being folded into the new offering.
One ultimatum deadline between UPS and the Teamsters union was passed successfully on Friday, raising hopes of a contract settlement, but another one came and went today with prospects somewhat dimmed as the two sides cut off talks. Each party blamed the other for the breakdown, with three weeks left until the July 31 expiration of the current five-year agreement and pay the main sticking point.
Logistics experts had mostly positive reactions to Amazon Hub Delivery, the company’s latest last-mile move which enlists local businesses to earn extra money by making nearby deliveries in their spare time. Amazon is hoping to have 2,300 businesses recruited by the end of 2023 as it builds scale. Most saw it as a more economical option than the DSP model, giving Amazon more control.
Stepping up its hardball tactics, the International Brotherhood of Teamsters walked away from the bargaining table Wednesday in the midst of contract negotiations with UPS, demanding the carrier provide its last, best offer Friday or a strike would be a likely outcome, with worker pay the key issue. UPS says it is working around the clock to reach a settlement before the July 31 deadline.
A recent trend in ecommerce network design supports a strategy of “getting product closer to the customer,” a more efficient model that delivers on service-level promises. Then came COVID-19, upending everything and accelerating the pace of change in inventory and supply chain strategy, in turn affecting network design. Retailers and analysts discuss the current state and where it’s headed.
FedEx reported a 10% drop in Q4 revenue as demand remains challenged and cost-cutting initiatives continue in an effort to boost the balance sheet, including idling more planes, while announcing it is folding Ground operations into Express in Canada, the first step in a much broader consolidation outlined in April. It’s a radical departure from the operating model of retired founder Fred Smith.
After a strike authorization vote, the International Brotherhood of Teamsters said it reached agreement on a couple key points with UPS, including increasing the number of grievance arbitrators and the amount due in penalties for errors in pay, according to a report in Scripps News. Meanwhile, a separate 8-1 U.S. Supreme Court ruling against the Teamsters was seen as weakening the right to strike.