Dive Brief:
- Just weeks after UPS parcel carriers approved a new labor contract, UPS Freight will stop picking up shipments from customers and suspend all service beginning Nov. 7 in anticipation of a possible strike, according to a statement issued last week.
- The latest round of negotiations between UPS and the Teamsters Freight National Bargaining Committee ended on Oct. 25 and produced an agreement in which union members will vote this week, but since a strike is already approved, should the vote be "no," UPS is preparing for the worst. A "yes" vote would see service resume on Nov. 12.
- “To help you plan to maintain business continuity while we do not have a contract extension, please note that UPS Freight can only guarantee delivery of ground freight (LTL) shipments through November 8, after which we recommend you seek alternate arrangements,” UPS said in a statement. Small package deliveries to individuals will not be affected.
Dive Insight:
The freight contract covers 12,000 of UPS's 374,000 U.S. workers and $867 million of the company's $7.5 billion in third-quarter revenue, according to Reuters. The far larger segment of UPS' business, smaller parcel service, is assured through the holidays as the International Brotherhood of Teamsters ratified a master agreement with UPS last month.
"You can remain confident UPS is ready to continue to serve our small package customers throughout the holiday season and beyond," said the company's statement.
But with peak retail season beginning, and other carriers eager to add more capacity to their fleets amid continuing healthy demand, a prolonged strike could drive spot prices even higher since spot market rates don't seem to be falling despite a slight ease in volume.
The last days for ground freight (LTL) pickup will be as follows:
- Thursday, November 1 for 5-day shipping commitments
- Friday, November 2 for 4-day shipping commitments
- Monday, November 5 for 3-day shipping commitments
- Tuesday, November 6 for 2-day shipping commitments
- Wednesday, November 7 for 1-day shipping commitments
Despite UPS laying down its "last, best and final offer," the Teamsters remain dissatisfied with subcontracting and the use of rail freight, wage increases, pension and vacation issues according to Logistics Management.
"UPS’s offer, which we believe should be ratified, is an offer that rewards our employees with wages and benefits at the top of the industry and compensates them for their contributions to the success of the company," said the company in a statement.
If it goes forward, this would be the first strike for UPS workers since 1997.
