The contract negotiating process between UPS Inc. and the Teamsters union was expected to get loud and emotional. Judging from comments made at the first Teamster meeting to discuss bargaining strategy, the union didn’t disappoint.
On Monday in Washington, Teamsters General President Sean O’Brien and General Secretary-Treasurer Fred Zuckerman convened a meeting of what is known as the UPS National Screening Committee. The gathering brought together representatives from dozens of UPS (NYSE: UPS) locals to review proposals that the Teamsters may, or may not, take into upcoming talks with the nation’s largest transportation company.
The contract, which covers approximately 350,000 UPS employees, is the largest of its kind in North America. It typically runs for five years. The contract covers drivers, loaders, unloaders and other personnel.
At the meeting, O’Brien reiterated his “clear message to UPS” that a contract must be agreed to no later Aug. 1, the day after the current pact expires. If not, the union will strike, according to O’Brien.
Read More: If the Teamsters union strikes, will UPS close its doors?
O’Brien said the company will take a hard line on UPS expanding its use of full-time personal vehicle drivers who deliver packages using their own vehicles and get reimbursed by the company on a per-mile basis. Another key issue is the status of so-called “22.4 drivers,” full-time drivers who are paid less than full-time drivers and who typically work Tuesday-through-Saturday instead of Monday-through-Friday shifts. The Teamsters want to bring those drivers up to the senior pay scales. Subcontracting and part-time wages are other issues that will be on the bargaining table, O’Brien said.
But the toughest language came from Zuckerman, who has battled UPS for years as head of Louisville, Kentucky’s Local 89, the largest Teamster local in the company’s system. Louisville is home to UPS’ primary air hub known as Worldport.
“Sean is going to pick a fight with this company, and that fight is to get the very best contract we can get for our members,” Zuckerman said.
This contract will be unlike prior ones where UPS said it wanted what Zuckerman called a “cost-neutral” outcome. “It’s not going to be a cost-neutral contract,” Zuckerman said of the 2023 agreement. “We’re going to take from them what our members deserve.”
UPS executives have said publicly they expect negotiations to start relatively late and get heated along the way. CEO Carol B. Tomé, who will be sitting in on her first contract, has said she expects the agreement to yield mutual benefits.
The timing of the contract cycle virtually ensures the rank and file will receive a significant wage bump. The current contract, negotiated in 2018 but not ratified until the following year, has allowed UPS to skirt the significant labor cost inflation that has hit FedEx Corp.’s (NYSE: FDX) ground-delivery unit. UPS Teamsters have been receiving wage increases and annual cost-of-living adjustments of about 3% since 2018.
UPS would be willing to agree to significant wage increases in return for muted concessions in so-called back-end areas like work rules, according to sources familiar with the company’s thinking. The Teamsters, which have created a separate division dedicated to organizing Amazon.com. Inc.’s (NASDAQ: AMZN) warehouse workers, have said the UPS agreement will serve as a template to demonstrate to Amazon workers the value of joining the union.
In a somewhat surprising twist, UPS, which counts Amazon as its largest individual customer, is mulling a strategy where it would turn a blind eye to Teamsters’ efforts to use its wage success at UPS as leverage against Amazon, according to the sources.
As of early 2022, Amazon accounted for about 11% of UPS’ annual revenue. However, that percentage has dipped into the single digits, per sources. UPS is happy to let go of lower-margin Amazon business as it aggressively courts, especially from rival FedEx, more profitable small and midsize business (SMB) revenue, the people said.
The two-day Teamsters meeting ended Tuesday. Its small-package division, which will be responsible for negotiating the UPS contract, has so far received more than 11,000 proposals from local leaders and the rank and file suggesting how to structure what will be a complex agreement.
Besides the master agreement, UPS and the Teamsters will negotiate a multitude of local agreements known as “supplementals.” About 14 of the supplementals cover densely populated and strategically important regions. There are also additional supplementals smaller in scope.
ka
Curious who over 5 years a 5 dollar an hour raise is “cost neutral” when the other rules didnt change over the same 5 year period.
Would like to understand that better as well as what specifics UPS is hoping for with the rules relaxation.
Butch Traylor
I worked 44 years as a driver, shop steward, Teamster business agent, & local union officer. We had a great contract when I started in 1977 then every new contract had new concessions to the company. We went from 90% full time to 45% full time and 55% part time with part timers making as little as 1/3 the hourly rate for doing full time work. The last contract was a low ball offer that the company never expected to get which created an even more inequitable pay rate for newly promoted drivers. It was voted down decisively by the members, but was “imposed” by the Hoffa administration because he had lost the domestic vote in his reelection attempt only wining by a 3000 vote margin that he received from Canadian Teamsters. His biggest loses we’re in UPS locals. He will always be remembered as the guy who sold out the membership. That should be rectified with this contract.
Doug Berry
The work force is much more educated and should ask, what would be my benefit level, particularly in wages, if a large percent of my wage was not going directly to the Teamsters? Teamsters who have a poor record of money management. An organization who makes no profit except off the shoulders of the members they take from……
Freight Zippy
If any company in America has shown how to handle a potential strike, it is UPS.
Back when they owned UPS Freight, as the contract expiration time drew closer, UPS ceased picking up shipments based upon transit times. For example 5 day lanes stopped being picked up first, next day 4 day lanes etc..
By the time they got to 2 day lanes the teamsters ran back to the table and signed anything they had offered.
Then UPS fooled all of them and sold UPS Freight.
Paul Leinhos
I’ve been retired 4 years but 2 things need to change. 1) Reduce from 4 years to 1 where employees reach top scale. 2) Supervisors who receive 3 plus harassment grievances are disciplined. Remember reading the UPS charter in the 80’s saying to “treat employees with dignity and respect “. What a joke.
G.Keaton
I feel that we should continue to be aggressive, for so long we as teamsters have given many conssesions, and I see a few on the tread not feeling confident in our Union, that’s because not to sound cleshay we are only as strong as our people in the union, as a 26 year teamster I have seen alot, and I see alot of workers afraid to stand up for what is our livelyhood, we work hard and we have what we because of our “UNION”not because of ups !
UPS Driver RM
The Teamsters Union has been weaken by poor leadership. With the vigor these two bring to the table. The Teamster’s membership is waking up, UPS seems to forget, they have the most powerful workforce in the country. The employees might complain and be difficult, but when the pandemic hit, they all stepped up and performed above expectations for two years. Running at Christmas time numbers and spending less time with their families. Injuries went up dramatically and so many pushed through their injuries and kept working. After the pandemic harassment skyrocketed and a company that received record profits became more greedy. UPSers have earned a lot the past couple years, and hopefully the contract reflects the sacrifices these hard working people made to keep the country going.
Professional Cardboard Massager
Pay for part-timers must be competitive & commensurate with the required work. Except for increasing pension payouts & shorter timelines to retirement, the rest of the pay issues can continue to increase as in the past.
The larger issues at hand are work/life balance, forced overtime outside of peak, and the overall harassment of employees. These are the “work rule” issues that the employees have the biggest issues with. If they are not addressed, the rank & file will be forced to strike by this uncaring, multi-billion profit company.
Time to “PayUP”!