FedEx, sensing an opportunity against its main rival, has posted a general rate increase for next year three weeks earlier than usual and lower than the current year’s figure, coming in at 5.9%, as UPS is dealing with a new union contract cost that the Teamsters estimates at $30 billion over five years. Analysts believe it will lead to a rethinking of UPS’s approach to its GRI strategy.
As expected, the International Brotherhood of Teamsters voted overwhelmingly to ratify a new five-year contract with UPS, giving the 340,000 members at the carrier higher wages for part- and full-time workers, and eliminating a hated two-tier system of driver classification. More than 86% of union members voting said yes to the new contract, the Teamsters said, a record for a UPS deal.
UPS and the International Brotherhood of Teamsters reached a five-year contract settlement today, averting a costly strike of 340,000 members that would have begun a week from today and giving part-time workers the pay increases their leadership had pushed for over the past few weeks, while handing newly energized organized labor a major victory. Starting part-time pay will be $21 per hour.
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.
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.
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.
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.
More than 80 delivery drivers and dispatchers for an Amazon contractor who just joined the International Brotherhood of Teamsters in April have initiated the first strike against Amazon at a hub in Palmdale, CA, saying the company needs to address wages and working conditions. Amazon begs to differ, saying it terminated the contract with the DSP, and that the Teamsters are making up facts.
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.