Dive Brief:
- During negotiations for a new labor contract with the Teamsters Union, UPS "has as much said that across the table to us they have absolutely no concrete plans to do Sunday delivery," Denis Taylor, co-chairman of the Teamsters UPS National Negotiating committee, told reporters Monday.
- Taylor said the contract has terms that will protect labor, in case UPS changes its mind. "We firmly believe that at some point during the term of this agreement, that Sunday delivery would be a distinct possibility for our members," Taylor said.
- UPS told Supply Chain Dive it was not providing further comments on the pending contract's details. "UPS believes the agreements reward our employees for their contribution to our success and provide flexibility to keep our company strong," the company said in an email.
Dive Insight:
UPS' new labor contract is a story of a company facing greater costs in a season of high demand. The call with Taylor revealed a wide variety of initiatives UPS had to get drivers to work longer, or in different ways, to get as much volume shipped as possible.
Last-mile delivery providers like UPS have been suffering under the weight of an e-commerce rush. Despite initiatives like lockers or in-store pickup programs, the number of packages handled by carriers like FedEx and UPS continues to rise. And until the age of autonomous vehicles, each delivery — to a store via truck, or to a home by package car —still requires a driver.
In April, UPS announced it sought to make Saturday delivery available in 5,800 markets by the end of 2018. Sunday deliveries will likely wait until the third-party logistics provider can prove its weekend model sustainable. Part of the argument for Saturday was to ease drivers' burden during the week.
But the new business model has also given rise to a new class of driver, which, the Teamsters argued, requires a new class of pay.
Article 26 of the new contract creates what is called a "full-time combination driver," according to a highlight sheet Taylor provided to reporters.
If ratified by the membership, the new contract would allow such drivers to work five consecutive days with an eight hour guarantee. As of August 1, 2018, these drivers' start rate would be $31.34 per hour, significantly higher than the current $20.50 for regular package car drivers.
It also limits the new classification to 25% of the regular driver workforce, however, as a "safeguard" for regular drivers.
The pay structure, Taylor said, would resolve current issues some drivers have when it comes to working overtime or on weekends. It also sets up the 5-year contract so that, if Sunday delivery does become a reality, as Taylor fears, the labor terms are already set up.
