UPS starts contract negotiations with Teamsters Union

UPS begins talks this week with the Teamsters Union on the largest collective bargaining agreement in the US, with the union calling on the parcel-delivery giant for improvements in part-timers and drivers’ compensation. 

The national negotiations held in Washington, DC will likely bring out an update to the current contract that expires on July 31, mapping out the delivery giant’s cost structure at a time when customers demand more delivery options, The Wall Street Journal reported. 

The union is demanding that UPS increase pay for part-time employees and eliminate a second category of drivers who handle weekend deliveries. UPS is seeking more flexibility to have employees work on weekends in response to changes in demand, as parcel recipients now expect deliveries on any day of the week.

The upcoming UPS contract is expected to cover approximately 330,000 employees in a five-year deal that will extend through 2028.

“We are committed to reaching an agreement that provides wins for our employees, the Teamsters, UPS and our customers,” said UPS spokesman Glenn Zaccara. 

“What we do in these upcoming negotiations is going to be the road map for the success of the labor movement, moving forward. So all eyes are upon us,” said Sean O’Brien, president of Teamsters, in an interview. “Every contract we negotiate is a template for nonunion industries, doing similar work.” 

The current two-tier system for drivers, according to the Teamsters, has allowed the company to use lower-paid workers to deliver packages on weekends, curbing delivery costs, and these drivers are doing the same amount of work as the higher-paid drivers who work on the weekdays and should get the same pay and benefits.

“We are not going to negotiate a contract that is cost neutral or with concessions. We are going to push this company and its management harder than they’ve ever worked before, and for the 1st time you’re going to face a productivity standard,” Sean O’Brien, President of Teamsters, told UPS across the table. 

O’Brien took over leadership of the Teamsters in March 2022 and was critical of the prior agreement with UPS. It is also the first negotiation for UPS CEO Carol Tomé, who took over in June 2020.

Around 55% of UPS workers represented by the Teamsters are part-timers, and according to O’Brien. 

UPS said its part-time employees currently receive at least $16.20 an hour and average $20 an hour after 30 days, and these workers receive the same health care benefits as its full-time employees, a pension, paid time off and tuition reimbursement.

The talks surrounding supplemental agreements, which started in January, deal with provisions not covered under the national agreement such as paid time off, discipline, grievance procedures, seniority, overtime and work hours. 

Delivery drivers and package handlers were designated essential workers during the pandemic, and many worked extra hours to cope with outsized demand. The union says that workers should have more say over whether or not to accept overtime work.

The delivery titan reported record operating profit in 2021 and 2022, but said in January that it is preparing for a global delivery slowdown this year.

The parcel-delivery landscape has evolved since the International Brotherhood of Teamsters and UPS last inked a five-year deal in 2018. 

In recent years, both UPS and its rival FedEx have shifted their focus towards delivering more profitable packages instead of pursuing volume growth.

Despite a pandemic-induced dip in online sales, e-commerce remains a robust market segment, and delivery companies seek greater workforce flexibility to provide weekend services. FedEx recently unveiled a cost-cutting restructuring plan that merges its networks.

In the last contract negotiation in 2018, the Teamsters members voted down the agreement, but it was eventually ratified due to low turnout. The Teamsters have now confirmed that this loophole has been resolved in 2021 and will not impact the ratification process.

With Post wires