UPS Inc. should be prepared to lose as much as 30% of diverted volume should the Teamsters strike the company by the end of the month and a work stoppage last for a decent duration, a leading parcel consultant said Monday.
UPS handled about 18.6 million parcels in the U.S. per day in the first quarter. Under a contingency plan, it expects to handle 4 million parcels on its own. The balance of about 14.6 million parcels, most of which would be ground deliveries, would be subject to diversion.
Satish Jindel, president of consultancy ShipMatrix, said in a communique to FreightWaves that the 30% of volume that could be lost would be equivalent to more than 4 million parcels a day.
Because there are about 80,000 package car drivers and each driver delivers about 230 parcels per day, the diverted volume, if it never returns to UPS (NYSE: UPS), could result in 4,300 lost driver jobs and those of a few thousand package handlers for every 1 million packages diverted, he said.
Unlike the last Teamster strike in 1997, there is plenty of competition for diverted volume. For example, FedEx Corp., (NYSE: FDX) whose ground unit didn’t exist back then, is delivering on-time performance for air and ground on par with UPS, according to Jindel. This will give shippers more confidence to keep diverted volumes with FedEx, he said.
On Sunday, the U.S. Postal Service launched “Ground Advantage” with two-to-five-day transit times comparable to FedEx and UPS. Jindel envisioned a scenario in which large shippers divert lightweight parcels under 5 pounds that can fit in a mailbox to the Postal Service and the heavier parcels to FedEx.
The potential damage to UPS and its unionized workers behooves both sides to return to the table and resume negotiations, Jindel said. Talks collapsed last week reportedly over an inability to come to terms on part-time wages. No new talks are scheduled. The current contract expires July 31.
“Being very tough in negotiations is analogous to stretching a rubber band,” Jindel wrote. “No one knows the full limit before it snaps and then one has to start all over again with a new set of conditions.”
Separately, for the minority of Teamsters union members at UPS who don’t favor a strike should a contract not be agreed to in three weeks, the National Right to Work Legal Defense Foundation on Monday issued some advice.
All UPS employees can resign their membership in the union and continue to do their jobs, according to a legal notice issued by the foundation. “If you don’t support the union you can send the union a letter resigning your membership at any time,” the notice said.
In addition, employees who resign their membership — or who are already nonmembers — have the right to work even if the union orders a strike. “Union officials can — and often do — fine union members thousands of dollars for working during a strike,” the notice said. “So you should seriously consider resigning your union membership before you return to work during a strike, which is the only way to avoid fines and discipline.”
Employees working in a “right-to-work” state, where union membership and financial support are voluntary, can resign their membership and opt out of all union financial support, according to the notice.
Employees not working in a state with those protections have the right to opt out of paying dues for union politics and may be able to avoid other union financial support, according to the notice. In non-right-to-work states, unions can still only mandate that employees pay dues as a condition of employment if the union and management have finalized a union monopoly bargaining contract that contains a valid forced-dues clause, the notice said.
About 97% of UPS’ members have voted to authorize a strike if a contract is not reached by July 31. The Teamsters represent 340,000 UPS employees, many of them part-timers.
Sum Guy
Y’all aren’t that far off. If there’s a strike, it’s ALL on O’Brien. He is doing you and the rest of your brothers and sisters a huge disservice. Your last president didn’t help your cause much in 2020, but O’Brien’s tactics are nothing short of terroristic.
Ka
Hey Midwest teamster, point out other calls Jindel has been wrong on.
We’ll wait.
Neal Golden
I think the management need to do our job for a week to see how hard this job. I definitely think preloader and loader deserve a raise. Drivers make good $$. Second tier driver should get the same pay as a driver. We need more $ per hours. I have been w UPS five and half year. I should be making at least $25.00 an hour. This is hard work and physical demanding on our body. The pension pay need to be increase for preloader and loader. Drivers are making good $$ but they deserve to have better ventilation in their truck. They need to get rid of bad management at the Deerfield hub. Management is horrendous and high turnover .
Derek R Fausneaucht
Oh don’t worry the government will bail them out just like Yellow… They say the disruption of goods and services is illegal so even if half your part time workers and half of your full time work force is unable to put food on your tables and on welfare… Go Back to Work… Keep working for the greedy leaches who pay for these huge buildings and huge wages for the top owners and managers… We are nothing but dirt and should just lie down and eat dirt…
Bruster
Unions are not in this for the workers. They are a leech on society and free market. First thing they ask for is for due to come out of the employees pay checks. As an employee you are not even allowed to talk with management with out a union rep, non-union companies are more efficient and operate better as a team.
Jay S
I quit reading after you said FedEx delivery is on time performance. Is journalism just a lazy man’s job anymore that goes by what it believes in its head over facts? FedEx can’t even get people to work for them and some towns aren’t even delivered daily. People have to go to their building to pick up their packages if they want them. They aren’t going to be able to handle anymore pkgs. Stop with the half assed journalism.
Stephen Webster
All truck drivers and lease ops should belong to a union or a association. We need better protection for the part time and lower wage so called essential workers. In Canada many foreign people who came to ont and parts of B C ended up living in cars or homeless yet still have 2 part time jobs
In ont we have over 500 homeless truck drivers who go sick or injured. What does he suggest for people who do not get proper medication if injured or suffer heat stroke or pneumonia from the heat or the cold.like I have .
Midwest Teamster
It’s one thing to call the clown Jindal a “leading consultant.” But it’s crossing a line to promote union-busting hucksters and their recommendations on resigning from participating in the strike.
You’re failing your readers and folks in the industry, many of whom seem to think this is some sort of temporary fad. The UAW will likely strike a month after us, Hollywood is shut down, etc. Polls show widespread disenchantment and malaise by workers at every level. Failing to acknowledge that workers in this country are more fed up than any time in probably a century is going to result in a lot of pain for business leaders.
And it’s just shameful.