After complaining in August that UPS hasn’t upheld contract commitments for new air conditioned vehicles, job creation, alleged overtime abuses and distribution of aircraft maintenance assignments, the Teamsters union is preparing to bring forward another grievance in an effort to fight what it perceives as an ongoing attack on members’ rights.
UPS (NYSE: UPS) is denying a Teamsters union accusation that it has improperly diverted delivery work to Roadie, a subsidiary that uses a technology platform to match freelance drivers to packages available for delivery.
Teamsters Local 804 claimed on Instagram that UPS is subcontracting parcel deliveries to gig drivers working for Roadie, in violation of the union’s 2023 collective bargaining agreement, to avoid paying overtime and skirt safety laws.
“Roadie will be in 30 cities and metro areas by the end of the year. Everywhere they go they are taking packages that should be on UPS trucks driven by UPS Teamsters,” the flyer says. It also accuses Happy Returns, another UPS company, of using independent contractors to handle e-commerce returns that would have gone through UPS Store counters and clerks.
Union members are being encouraged to gather evidence of alleged company violations. “If you see a Roadie package in UPS trailer or being stored in a warehouse, take action,” the flyer advises. “Photos, documents, tracking information. Anything that documents a Roadie package is in the UPS network” should be sent to Local 804’s office.
But, according to Roadie’s website and parcel industry professionals familiar with both companies, Roadie handles same-day, urgent shipments that never go through the Brown parcel sortation network and oversize items that don’t fit in a box.The crowdsourced delivery platform instead picks up orders for customers, such as Walmart, Tractor Supply, FilterBuy, Spirit Halloween, paint brand Benjamin Moore and Nothing Bundt Cakes, at local stores and warehouses for last-mile delivery to shoppers.
And Happy Returns is a reverse logistics specialist. With a network of drop-off locations — including the UPS Store — it consolidates returned merchandise at its hubs into less-than-truckload shipments back to the vendor, inspects the contents to avoid fraudulent returns and processes credit back to the consumer.
UPS, which acquired Roadie in 2021, said in a statement that the Teamsters’ outsourcing charge is without merit.
“We have several business units with different operating models to meet different customer needs. Our contract with the Teamsters requires that UPS drivers handle all deliveries for our small package business unit directly and we remain in compliance with the terms of our agreement. We address any disputes through our long-established grievance process,” the Atlanta-based company said in a statement.
UPS is violating Article 1 of the master contract signed in 2023, Teamsters national spokeswoman Kara Deniz explained in an email. The Teamsters’ national office is consolidating multiple grievances filed by local organizations across the country and plans to soon file a complaint that will require arbitration to resolve, she told FreightWaves.
“Since acquiring Roadie, UPS has transferred Teamster work to nonunion Roadie drivers every day. It must stop. UPS is violating the contract and putting good union jobs in jeopardy while exploiting other vulnerable workers,” Deniz said. She said Roadie uses UPS labels, tracking and equipment, which proves Roadie is taking work from Teamster drivers. “Clearly, UPS is using Roadie as a shell to avoid its contractual obligations to the Teamsters.”
The Teamsters’ Package Division represents 340,000 UPS drivers, unloaders, sorters, clerks and mechanics. UPS does use part-time workers to perform seasonal support work using their personal vehicles, which was a sticking point during the 2023 labor negotiations.
Satish Jindel, who advises companies on the best way to allocate their parcel and less-than-truckload shipping budgets, said that as long as packages being moved don’t end up in the UPS network there should not be a problem with Roadie receiving support from UPS.
UPS is in the process of consolidating its parcel network and reducing its workforce to better align with slower parcel growth, but no credible evidence has publicly surfaced so far to indicate UPS is outsourcing core package delivery. About 2,000 drivers accepted a buyout from UPS in the third quarter, according to company data and calculations by Jindel. Management last week revealed it has eliminated about 32,000 warehouse jobs this year through its network consolidation program.
Jindel recently recommended in a commentary piece that FedEx, which doesn’t have a unionized delivery workforce, quickly adopt a gig worker model for residential e-commerce deliveries because of the better economics.
Union contract pressures costs
UPS, which saw the need to utilize last-mile delivery agents when it purchased Roadie, has been unable to fully capitalize on the investment because of the union restrictions on replacing drivers. Many new courier companies offering lower rates than FedEx and UPS have captured market share in recent years.
Jindel, the president of Shipmatrix, said the Teamsters have themselves to blame for UPS trying to shed drivers where possible. Other carriers can offer lower pay because drivers no longer need to have a photographic memory of their routes.
“If you hadn’t been so difficult with wanting to have a high school graduate get paid $65/hour when other people with similar skills are getting $35/hour at FedEx and Amazon, UPS wouldn’t be doing this,” he said in an interview.
“Fifteen years ago the UPS driver knew the route, he knew where to turn right, where to turn left, where every address was. You don’t need a driver to know that. Just like if you went to New York and used the Yellow cab, the driver had to know where your hotel was. Now any Uber or Lyft guy can do it because they just get the directions from a GPS.
“So, it’s the technology that has diminished the value of a UPS delivery route and the driver. It’s not UPS doing it. It’s technology. And Teamsters should realize that Amazon is even finding automation is more cost effective than a worker in the warehouses making just $19.50 per hour. Go fight the technology. Complain to Google and the other automation companies,” he advised the Teamsters.
UPS last week said it would retrofit 5,000 package cars with air conditioning, a step it characterized as going beyond terms in the collective bargaining agreement. It previously settled some local disputes with the union at its air hub in Louisville, Kentucky.
Roadie and Happy Returns are part of UPS Digital, which saw revenue growth of 9.5% year over year in the third quarter.
Click here for more FreightWaves/PostalMag stories by Eric Kulisch.
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