As UPS deadline nears, strike appears more likely with no deal in place

Some 340,000 UPS employees are inching toward a strike that appears increasingly likely, threatening the largest work stoppage in over half a century, that could upend a part of the broader package delivery system that Americans have come to depend on.

On Wednesday, UPS and the Teamsters, the union representing UPS workers, announced that after a two-week impasse, they had agreed to resume negotiations next week with time running out before the Aug. 1 deadline.

While the two sides have resolved conflicts over 95 percent of their issues, including air conditioning in trucks and the elimination of a lower paid class of workers, they remain at odds over some key issues—pay and benefits for part-time workers who make up more than half of UPS’s workforce.

“I think it’s likely a work stoppage will occur and the key question at this point is how long it will last,” said Alan Amling, a fellow at the University of Tennessee’s Global Supply Chain Institute and a former UPS executive.

As the strike deadline has neared, so-called “practice pickets,” or dress rehearsals for the potential strike, have sprung up outside UPS facilities from Hawaii to New York, with hundreds of Teamsters UPS members in brown work uniforms marching and chanting: “What do we want? Contract!”

A strike at UPS would have far-reaching implications for the U.S. economy, as well as the country’s labor movement. When UPS went on strike in 1997, businesses large and small strained to keep shelves stocked.

But now far more companies as well as a bigger percentage of Americans’ consumer spending depends on delivery infrastructure that can get packages across the country within days of purchases. And though its overall market share has dropped, UPS plays a big role in that, with an estimated quarter of the 59 million packages shipped in the United States each day passing through UPS’s brown delivery vans, split equally between homes and businesses.

Labor leaders say the UPS Teamsters contract is critical to the future of the U.S. labor movement, and has long set and raised standards for workers nationwide. For decades, the UPS Teamsters contract has set and raised standards for workers around the United States, ensuring a path to the middle class for many Americans who do not have college degrees.

“This is a fight we must win to protect the future of good-paying, dignified careers at UPS,” Sean O’Brien, president of the International Brotherhood of Teamsters, the union that represents UPS employees, at a rally in Long Island last week.

Meanwhile, a spokesperson for UPS said the company is pleased that it will back at the bargaining table next week and is “prepared to increase … industry-leading pay and benefits,” but stressed the need to resolve the remaining issues quickly.

The parties walked away from the bargaining table in early July, when the Teamsters rejected an offer from UPS on wages and benefits packages, leading experts to warn that a strike was increasingly likely. Once back at the bargaining table, the parties will have about one week to reach a deal, which includes putting it before members for a vote.

The union has not released its specific wage demands for part-timers. Well over 100,000 Teamsters union members are part-time employees who load and sort packages in warehouses for a starting wage of $16.20 an hour—pay that has not kept up with inflation and is similar to wages in the fast food industry, union members say.

“We don’t want to go on strike, but sometimes we have to make hard choices,” said Lennox James, a part-time UPS warehouse employee in Brooklyn, who makes $20.50 an hour after 16 years at the company. He works a jerk chicken food cart on the side. “Our demands are not draconian. They are very reasonable.”

Company officials have rejected claims that part-timers are underpaid, noting that part-time employees at UPS make an average of $20 an hour after their first 30 days on the job. They also receive annual raises, the same health benefits as full time employees and pensions that today are exceedingly rare for private sector workers.

In 2021, O’Brien, the Teamsters president, ran on a campaign to reform the country’s biggest transportation union, promising to take a harder stand on UPS contract negotiations. His victory ended decades of Hoffa family leadership. In 2018, during the last UPS contract negotiations, president James Hoffa forced workers to accept a contract that they had rejected.

Winning a strong UPS contract is part of O’Brien’s strategy to also organize workers at Amazon, the country’s second largest employer, which continues to oppose unionization efforts.

“We’re going to be able to take this contract, and we’re going to the nonunion Amazon workers and say you’re going to have a path to … a long-term career,” O’Brien said at a rally earlier this year. “It’s about organizing our competition.”

In recent days, O’Brien has led fiery rallies in Long Island with Rep. Alexandria Ocasio-Cortez (D-N.Y.) and in Los Angeles with Hollywood actors and screenwriters who are also on strike. O’Brien will appear in Atlanta on Friday.

Experts say a UPS strike would hit e-commerce deliveries first, creating delays similar to those experienced by consumers in the early days of the covid-19 pandemic. If the strike extends beyond a few weeks, business shipments, including critical medical supplies, could be disrupted. And a months-long strike could create backlogs that extend into the upcoming holiday season, logistics experts say.

The union representing thousands of UPS pilots has said they will not cross picket lines if Teamsters strike on Aug. 1, which would result in the immediate grounding of the company’s global air flights, according to the supply chain industry outlet FreightWaves.

In anticipation of a strike, major companies have moved their shipments to other carriers, including FedEx, supply chain analysts said. The consulting firm AEG has estimated that a 10-day strike would result in losses of more than $810 million for UPS. The company’s operations would likely continue in the case of a strike at a limited capacity, with corporate employees and its fleet of gig workers taking on warehouse and delivery roles.

During the 1997 UPS strike, which lasted 15 days, UPS lost more than $600 million in business. But the biggest blow was losing loyal customers who sourced exclusively with UPS to other shipping companies, such as FedEx. Over the years, FedEx, Amazon, and other regional carriers have mushroomed.

But the 1997 strike resulted in major wins for UPS workers, including increasing starting pay for part-time workers for the first time in over a decade and 10,000 part-time jobs converting into full-time positions.

Some industry experts say that a strike could inadvertently hurt the Teamsters by shrinking UPS’s market share and labor force. But labor experts contend that a strike with big gains for workers could help reignite a labor movement that has been shrinking for decades, especially at a moment when workers have the leverage of a tight labor market.

More than 170,000 actors and screenwriters in Hollywood are currently striking, and another 150,000 autoworkers employed by Ford, General Motors and Stellantis could strike as soon as Sept. 14. “There’s a reason to have a strike,” said Nelson Lichtenstein, a labor historian at UC Santa Barbara. “Workers want to demonstrate the power of labor and this is the time to do it.”