What to Know About a Potential UPS Strike

UPS national contract negotiations began this month between company leadership and the Teamsters union that represents its workers. 

If an agreement cannot be reached before the current contract expires on July 31, a strike would begin the next day. UPS ships about 24% of all parcels, according to 2021 data, which means major disruptions are at stake.

If you’re a UPS shipper, it’s time to start contingency planning in the case of a strike.

What’s Happening Between UPS and the Teamsters Union?

The Teamsters union, which represents 350,000 UPS workers, is negotiating a 5-year contract with its members. 

Contract negotiations began shortly after UPS reported record profits, including record revenue exceeding $100 billion, according to a news release from the Teamsters union.  

Pay increases, scheduling and improved working conditions are the primary issues at stake in the negotiations, and the union is taking a hard line in negotiations. 

“Our union is resolved to win the best contract for UPS members and to reset the standards for wages and benefits in this industry by August 1, 2023,” Teamsters General President Sean O’Brien said at a rally last year. “We won’t extend negotiations by a single day. We’ll either have a signed agreement that day or be hitting the pavement.”

In early April, supplemental bargaining meetings became tense between the two parties. UPS insisted on cost-neutral agreements, while the Teamsters held firm in their disapproval. 

Supplemental negotiating committees said they will not accept a cost-neutral contract after UPS announced record profits in the previous year. Additionally, the committees are continuing to present proposals to meet their goals around paid time off, working conditions, and other issues. The union said in a statement that UPS negotiators have either ignored their proposals or asked that proposals be paid for with concessions in other areas. 

“We are here to send UPS one message — that we are united in this fight,” Sal Valenti, a UPS Teamster and New England negotiating committee member, said in a statement. “Throughout the pandemic we've worked six, seven days a week, and we are going to make sure we get what we deserve.”

UPS says its philosophy is to negotiate in good faith and work constructively with the Teamsters. The company has created a page on its website, sharing its position on the ongoing negotiations.  

The company is committed to fostering a positive work environment, facilitating open and honest communication, and following all laws and internal codes of conduct, the website states. UPS also touts opportunities for advancement and collaboration within the with Teamsters union. 

In a January earnings call, CEO Carol Tomé expressed optimism that the company and Teamsters union could come to a mutually beneficial agreement. 

How Likely is a UPS Strike? 

Package volumes are falling across the industry, and increased competition from smaller carriers is threatening to disrupt the established duopoly. In this environment, consequences of a work stoppage would be dire for UPS and its customers. 

To set the stage, all major carriers saw a decline in package volume in 2022, though revenues increased because of inflation and higher surcharges. UPS saw a 2.5% decrease in package volume, but revenue increased $1.5 billion from 2015-2022.

Should a strike happen, it would not be unprecedented. In 1997, union members went on a strike that lasted for two weeks. 

Common sentiment among industry experts is that an agreement will eventually be reached before the deadline – though it will be hard-fought. 

UPS knows it will likely have to make concessions, and probably won’t let negotiations extend, according to Parcel Magazine. The most likely outcome is that UPS will negotiate hard, but will eventually concede where it must, the Parcel article says. 

Alan Amling, distinguished fellow at the University of Tennessee’s Global Supply Chain Institute and former VP of corporate strategy for UPS, told Supply Chain Dive that he believes an agreement would be reached. “But I also think the risk of a strike is the highest it’s been since 1997, and it’s a completely different environment,” he told the publication.

What’s at Stake for UPS Shippers?

A strike would mean large-scale disruptions for UPS customers. It would also cause disruptions for FedEx and the other carriers who would step in for scrambling shippers. 

At UPS, the company has reportedly told managers not to take time off in August and September, in case they’re needed to prevent a full work stoppage. 

Rival FedEx has also jumped on the news, warning that that the only way shippers can prevent a disruption is to act immediately. The shipper set a March 31 deadline to prioritize shipments from UPS customers, whether there’s a work stoppage or not. 

What Can UPS Customers Do to Prevent Disruptions?

If you ship UPS, it’s time to start making contingency plans and determine the best way to communicate with your customers, should a strike happen and your shipments become delayed. 

Unfortunately, it will be tough to simply switch to FedEx (or another carrier). The deadline to secure FedEx capacity has already passed. Regional carriers and USPS may have capacity to sell. However, regional carriers aren’t thrilled about the idea of becoming short-term contingency plans.

If you’re a UPS shipper looking for advice on how you can prepare, get in touch. Our industry experts can provide you with insights and industry knowledge to help you make the best decisions for your business.