Image source: CNN
Labor movements have sprung up since late 2021, with Starbucks and Amazon gaining national attention.
However, one of the country’s oldest unions has clashed with the world’s largest parcel delivery company.
UPS and the Teamsters Union will begin contract negotiations before their contracts expire next year.
Although there is still a long way to go, labor experts are speculating that drivers and parcel delivery will go on strike.
How would this affect the country?
According to Todd Vachon, professor of Labor Relations at Rutgers, the question is how long it will take.
“The union’s president ran and won on taking a more militant approach,” he explained.
“Even if they’re very close [to a deal], the rank and file will be hungry to take on the company.”
If Vachon’s speculation were to come true, a UPS strike would affect nearly every household in the United States.
It is estimated that 6% of the country’s gross domestic product is transported annually on UPS trucks.
Along with the explosive growth of online retail, the company and its drivers are vital to the country’s struggling supply chain. UPS also supplies many products to retail stores, factories, and offices.
Teamster and UPS
Over 350,000 Teamsters work as UPS drivers and package sorters at UPS, with a global workforce of 534,000 permanent employees.
The number is also growing rapidly, as UPS has added 72,000 jobs represented by Teamster since the start of the pandemic.
Despite competition from FedEx, the US Postal Service, and Amazon, none can handle more than a fraction of the 21.5 million US packages that UPS delivers every day.
This month, UPS released a statement stating:
“We want a contract that provides wins for our employees and that provides UPS the flexibility to stay competitive in a rapidly changing industry.”
“UPS and the Teamsters have worked cooperatively for almost 100 years to meet the needs of UPS employees, customers, and the communities where we live and work.”
“We believe we’ll continue to find common ground with the Teamsters and reach an agreement that’s good for everyone involved.”
Teamster hasn’t gone on strike since the protest nearly two weeks ago, 25 years ago, and if the union were to strike, it would be the largest strike against a company in US history.
Tensions between UPS and Teamster
In 2018, a majority of Teamster members voted against ratifying the current treaty.
However, the former union leadership (then President James Hoffa) introduced it because there were not enough members who participated in the ratification vote to bring about a strike.
Sean O’Brien became the new union leader this year by reshaping his campaign around the UPS contract.
He promised to make more UPS Teamster members and spoke often of the $300 million strike fund the union had raised to pay members in the event of a strike.
“Do our members wake up every day wanting a strike, I’d say no. But are they fed up? Yes, they’re fed up,” said O’Brien.
“Whether or not there is a strike, that’s totally up to the company. We’re going to utilize as much leverage as we can to get our members the contract they deserve.”
Meanwhile, UPS said the average delivery driver’s salary ($ 95,000 per year) includes benefits like a traditional retirement plan, which is worth an additional $ 50,000 per year.
UPS truck drivers are also better paid. Compared to FedEx and Amazon salaries, Teamsters earn far more than drivers working for small independent contractors.
The current contract expires at 12:01 a.m. on August 1, 2023, and O’Brien promises the union will not award a contract extension past the deadline.
The Teamsters president says that in addition to improved wages and benefits, the union will also demand better working conditions, such as better working conditions, including air conditioning in vans used for UPS deliveries, which the union says poses a health risk to drivers.
Despite the tensions, UPS has always spoken about how it values the workforce represented by Teamster.
The company is also one of the most union-friendly organizations in the United States compared to other companies that have seen a steady decline in union membership.
The growing number of Teamster jobs at UPS is due to the increase in online shopping, especially during the pandemic outbreak.
In 2021, the company managed to record a record full-year profit in nine months.
UPS closed the year with an operating profit of 50%, at $13.1 billion.
In the first half of 2022, sales increased by a further 10% compared to the previous year. However, O’Brien said: “Everyone gets rich except our members.”
Meanwhile, Carol Tome, CEO of UPS, who took over at the start of the pandemic, says the union agreement is a competitive advantage in times of labor shortages.
Tome is also trying to reassure investors and customers that UPS will be ready in the event of a union strike.
“Our goal with the Teamsters is a win-win,” she said in July.