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

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.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.