Experts Weigh in on Potential UPS Strike
About 340,000 UPS workers who make up the Teamsters union for the company voted overwhelmingly on Friday to strike if their demands for higher wages, more full-time jobs, increased workplace safety and a ban on forced overtime aren't met by July 31 in a new contract.
The current contract between the shipping company and the union -- made up of package delivery drivers and warehouse logistics workers -- expires July 31. It's the largest private-sector contract in North America, according to the UPS Teamsters. About one in four parcels shipped in the U.S. is handled by UPS, according to CBS.
“The strongest leverage our members have is their labor and they are prepared to withhold it to ensure UPS acts accordingly," Teamsters General President Sean O'Brien said in a statement Friday.
UPS said in a statement that negotiations between the company and the union are ongoing and that the vote doesn't mean a strike is imminent.
"We continue to make progress on key issues and remain confident that we will reach an agreement that provides wins for our employees, the Teamsters, our company and our customers," the company said.
The starting pay for part-time warehouse workers, who account for roughly half of UPS workers represented by the Teamsters, is $15.50 an hour, Mother Jones reported. UPS CEO Carole Tomé's total compensation was $19 million in 2022.
Total Retail's Take: The Hill reported that if negotiations break down, it could lead to the largest U.S. strike in decades, right around the back-to-school shopping season. UPS workers last went on strike in 1997, walking out on the job for 15 days.
Chris Creyts, senior director in the consumer and retail group at the global professional services firm Alvarez & Marsal, said any strike longer than one or two days would have a "massive impact" on UPS' parcel operations.
"UPS parcel service as we know it would almost certainly grind to a halt until the strike was resolved," he said in an email, adding that shopping orders would take much longer than expected, and that the strike could produce ripples in supply chains.
Inna Kuznetsova, the CEO of global supply chain planning and optimization firm ToolsGroup, said we may see a higher impact compared to the 1997 strike, especially given our higher reliance on e-commerce, globalization, and complex supply chains.
"The good thing is that we also have better software today and a higher level of technology adoption in the supply chain, which allows distributors and retailers to model and plan for risks and alternatives with a higher level of granularity," she said.
Anthony Robinson, the CEO of ShipScience, said in a LinkedIn post that the risk of a strike is low, but the economic damage could be massive.
"The best thing to do is consider the impact to your business if a strike occurs, and make a contingency plan. This should include multi-carrier shipping ops software and a baseline relationship with FedEx," he said.