Dive Brief:
- UPS and the Teamsters Union are negotiating a proposal that would create a "two-tier" driver structure and permit Sunday deliveries, The Wall Street Journal reports.
- The proposal is part of one of the largest collective bargaining agreements in the United States, covering 280,000 of UPS’s 454,000 employees. The current contract expires on July 31.
- The proposal, however, would create a "hybrid driver" position that would pay less and avoid overtime, union dissidents assert.
Dive Insight:
Driven by e-commerce and increased customer demand for on-time delivery, the agreement, should it be enacted, would greatly improve last-mile efficiency. It would be similar to the arrangement that the U.S. Postal Service has with Amazon and others for Sunday deliveries.
UPS has been automating its network to meet the demands of e-commerce. At last year’s UPS investor conference, company chairman and CEO David Abney announced the beginning of “the most sweeping transformation of our network in its history.”
Shortly thereafter, UPS began rolling out Saturday delivery options to the largest metropolitan areas and throughout the U.S. Full weekend deliveries would allow UPS to compete with the service USPS provides for Amazon and others, making the last mile more efficient.
If UPS and the Teamsters agree, those big brown trucks will be seen on Sundays, too.
But the path to a deal is far from clear. A dissident group, Teamsters United, opposed the package and told the Journal that three of its members were removed from the negotiating committee.
The “hybrid driver” position would pay between $15 and $30 per hour (the rate still is being negotiated) for employees working Sunday to Thursday or Tuesday to Saturday, thus avoiding overtime for weekend drivers. Under the current contract, most package-truck drivers work Monday to Friday and receive double-time wages for weekends — reaching around $74 per hour.
Further talks are scheduled.
