UPS, Teamsters reach agreement; more freight on the road, Sunday deliveries seen

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The Teamsters late Thursday announced it had reached an agreement in principle with UPS for a new five-year deal, avoiding the possibilty of a strike.

The announcement of the deal was made by the Teamsters. A UPS spokesman told The Wall Street Journal it would have a statement later Friday. 

Among the key highlights, according to the Teamsters' announcement on the deal:

--From an operational standpoint, the most significant development in the new contract--at least what has been disclosed by the Teamsters--are new mileage rates for UPS "sleeper teams." The rates "far surpass any rates in the industry," the Teamsters said. The agreement also will see UPS taking loads off the rails and on to the "newly-created" sleeper teams, "resulting in at least 2,000 new full-time jobs for the members." The irony is that this deal is being put in place as there is increasing evidence that tight capacity on the roads is leading some shippers to move freight to rail. "Sleeper team jobs are the highest paying jobs in the bargaining unit," the Teamsters statement said. "This will also open up more full-time opportunities for part-time employees as full-time employees fill these jobs, creating full-time openings."

--A general wage increase that appears to have settled the issue of Sunday deliveries, which was a key UPS concern as it sought to move deeper into 7-day ecommerce deliveries. The new wage provisions "will help to resolve several membership concerns, including Saturday and Sunday delivery, excessive forced overtime, time off, create additional high paying, full-time opportunities for part-time employees and provide thousands of additional contributors to our Teamster pension funds." UPS previously has not had Sunday deliveries; the mention of it in the Teamsters statement could be taken as an indication that with this contract, that service will be added.

--More chances for part-time workers to become full-time workers. And if a worker stays part-time, wages will be better. The starting rate of $13 on August 1, 2018 will be $15.50 on August 1, 2022. There is no longer a two-tier wage structure for part-time employees.

--Greater UPS contributions toward health and pension costs.

The current contract expires July 31. UPS drivers have not struck since 1997.