Dive Brief:

• UPS and the Teamsters Union reached a preemptive deal Thursday to permit Saturday and Sunday deliveries in exchange for a $4.15 minimum wage increase, improved benefits, 2,000 new trucking jobs and a new class of full-time workers, according to a Teamsters update.
• The deal comes after months of negotiations between the two parties, which are working to renew a master contract that expires July 31 of this year. The new agreement would begin August 1, but must first be ratified by affiliated UPS employees, according to a UPS press release.
• The two parties are not done negotiating. A set of "supplemental agreements" — such as specific deals with local unions — remain unresolved by the master deal. The next round of talks is scheduled for July 9 to 12, in Minneapolis.

Dive Insight:

Negotiations for a renewed contract come at a pivotal time for UPS, which is trying to adapt its business model for the new world of e-commerce and last-mile delivery.

Seeing the benefit of Saturday deliveries, and the need to compete with other last-mile delivery providers, UPS has been pushing its labor force to work weekends in exchange for significantly higher pay. However, the third-party logistics provider (3PL) has been unable to push Sunday deliveries due to the high costs.

If a new agreement between UPS and the Teamsters Union passes muster by July 31, the 3PL would be able to guarantee labor peace and full weekend deliveries through 2022. Such a deal is no small feat: to succeed, UPS is granting various wage, benefits and job concessions to the union.

One example is the addition of 2,000 new trucking jobs for the UPS fleet. For years, UPS has relied heavily on rail transportation for its cargo, Rail Insider reports.

In the new deal, the Teamsters "negotiated a provision to pull many loads that are currently moved by the railroad off of the rails and move those loads to newly created sleeper teams," according to the union update. "This will also open up more full-time opportunities for part-time employees as full-time employees fill these jobs, creating full-time openings."

Yet the added jobs and higher pay to new workers is but a drop in the bucket for many existing and long-time UPS employees, which recently voted to authorize a strike if a suitable deal is not reached by July 31.

The debate over the new contract was lively with comments on a post by UPS Rising, the official Facebook page for UPS contract updates to union members. Some called a $4.15 per hour raise over four years "weak." Others criticized the pay equity new hires would receive with UPS veterans, or the lack of information provided over how much the company would increase its contributions to benefits.

"93% of us voted yes to a strike authorization to give the union more leverage to do better! Glad this is the last contract for me," said Jeff Lindbom, a member of Teamster Local 344, on the thread. "Vote no, they still have a month to negotiate."

The union asserts the deal will appear more suitable once they release the full terms. 

“I am confident that once the membership has reviewed and understood the changes, they will see that this agreement is among the very best ever negotiated for UPS members,” said Denis Taylor, co-chairman of the Teamsters UPS National Negotiating committee in a statement.

“I realize that the membership is anxious to see the improvements," he added, "but as I explained at the beginning of this process, the specifics must be held until the Supplements have been settled and the entire proposed contract has been reviewed by the two-person committee" (of local unions).