Tentative Deal Averts Strike by UPS Drivers

(Photo by Tai L via Unsplash)
(Photo by Tai L via Unsplash)

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Labor peace just landed on UPS’ doorstep.

On Tuesday, the giant courier inked a tentative deal with its army of primarily Teamster delivery drivers, thus avoiding what would’ve been one of the costliest strikes in recent American history. The agreement comes amid a wave of labor negotiations across the country, including far outside of Hollywood.

One, Two, Three Strikes You’re Out

Both sides of the negotiating table had long promised to deliver a deal ahead of a Monday deadline, at which point some 340,000 drivers were prepared to go on strike. Such a walk-off would’ve cost the US economy roughly $7 billion in its first 10 days, according to forecasts from the Anderson Economic Group, with UPS customers losing more than $4 billion, UPS drivers suffering wage losses of $1.1 billion, and the company itself possibly incurring over $800 million in losses. UPS delivers nearly 25 million packages a day, or roughly a quarter of all US parcel shipments.

The new five-year deal will deliver some $30 billion of new money to drivers over the lifetime of the contract, the Teamsters unions said in a statement. It also included a handful of other key concessions from management, including guaranteed air-conditioning in new delivery vehicles, following the heat-related hospitalization of over 100 drivers in recent years, and a much sought-after pay raise for part-time drivers (veteran full-time drivers already pulled salaries of up to $100,000 a year, plus benefits and a pension plan). In sum, it’s a win-win for both sides in a summer where such outcomes have been hard to come by:

  • On Monday, the roughly 5,000 unionized pilots working for fellow courier giant FedEx rejected a tentative agreement on a renewed labor contract following over two years of negotiations. The pilots fall under the Railway Labor Act, essentially barring them from strikes.
  • Meanwhile, the United Auto Workers union is gearing up for a possible strike as its contracts with each of the Big Three automakers barrel toward expiration this September. Plans for a new EV battery plant in Indiana announced by Stellantis on Monday highlighted tensions between the two sides, with the UAW saying wages and benefits offered at battery plants are far behind typical assembly plants.

“We have been absolutely clear that the switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom,” UAW President Shawn Fain declared in a recent statement.

How Yellow Was My Valley: The Teamsters secured another victory this week when less-than-truckload shipper Yellow agreed to pay some 22,000 drivers over $50 million it owed in missed benefits and pension accruals as the company scrambles to refinance pandemic-era loans. It all sounds like decent fodder for a Hollywood miniseries, if Hollywood can ever figure out its own labor troubles.