Contract negotiations between UPS and the union representing 340,000 of the company’s workers broke down early Wednesday morning with each side blaming the other for walking away from talks.
The Teamsters have imposed several deadlines for United Parcel Service (UPS) negotiators to submit their “last, best and final” offer to their union workers in recent days. Union officials said Wednesday that UPS “walked away from the bargaining table after submitting an unacceptable offer,” specifically regarding the economic package.
UPS told a different story. The package delivery company said it was the Teamsters who walked out of negotiations, “despite UPS’s historic offer that builds on our industry-leading pay.”
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“We have not walked away, and the union has a responsibility to stay at the table,” the Atlanta company said in a prepared statement.
Whatever the case, talks are stalled and the end of the contract, midnight on July 31, is fast approaching. UPS workers represented by Teamster voted for a strike authorization last month and union boss Sean O’Brien said last week that the strike was imminent.
The Teamsters say any tentative deal must be endorsed by their national committee before being released and voted on by members. The union has said it will not negotiate beyond the expiration of the current contract.
Shares of United Parcel Service Inc. fell more than 2%. Shares of rival FedEx rose slightly.
The Teamsters represent more than half of the company’s workforce on the largest private sector contract in North America. If there is a strike, it would be the first since a 15-day strike by 185,000 workers paralyzed the company a quarter of a century ago.
UPS has grown tremendously since then and has become an even more integral part of the US economy with consumers relying on fast delivery for most household essentials. Small businesses that rely on UPS could also be left looking for alternative shipping options if the company’s remaining workforce couldn’t keep up with demand during a strike.
The United States Postal Service announced that it will increase the price for certain products and services. These rates will go into effect on July 9.
The company says it delivers the equivalent of about 6% of the nation’s gross domestic product. That means a strike would have potentially far-reaching implications for the economy, particularly the supply chain, which has only just begun to recover from pandemic-related entanglements.
Negotiations appeared to be progressing in recent weeks, with tentative agreements on a number of issues since national contract talks began in April. The parties agreed to scrap the two-tier wage system for drivers who work weekends and earn less money, which was a major sticking point.
The union also said it has also reached a tentative agreement to make Martin Luther King Jr. Day a full holiday for the first time and end unwanted overtime on drivers’ days off.
Last month, the union and the company reached another tentative agreement to equip more trucks with air conditioning equipment. Under that agreement, UPS said it would add air conditioning for delivery vehicles small US cars purchased after January 1, 2024. Existing vehicles would not receive this upgrade, but the union said they will get other additions like two fans and air vents.
UPS’s annual profits in the past two years are almost triple what they were before the pandemic. The company returned about $8.6 billion to shareholders in the form of dividends and share buybacks in 2022, and forecasts another $8.4 billion to shareholders this year.
