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Negotiations between UPS and the International Brotherhood of Teamsters broke down early Wednesday, raising the possibility of a strike just weeks before their contract expires.
The marathon negotiations, which stretched over the July 4 holiday, ended with each side blaming the other for abandoning the effort.
in one opinion, the union said UPS walked out of the table around 4am after refusing to make a “last, best and final offer” and saying it had “nothing left to give”. The company’s offer was rejected by the union’s collective bargaining committee.
“This billionaire corporation has a lot to offer American workers — they just don’t want it,” Teamsters CEO Sean O’Brien said in a statement. “UPS had to make a decision and they clearly chose to go down the wrong path.”
But UPS claims the Teamsters have “stopped negotiations,” pointing out that they have nearly a month to negotiate a deal.
“We have not resigned and the union has a responsibility to remain at the negotiating table,” the company said in an unsigned statement.
It’s the latest labor dispute that is threatening a pillar of the country’s transportation and ecosystem. A nearly year-long dispute over pay and automation led to temporary closures of several West Coast ports earlier this year, though workers never officially went on strike, disrupting trade routes from Asia. President Biden had to intervene personally last year to prevent a railroad workers’ strike.
A strike by UPS, the country’s largest shipping company, would disrupt the movement of goods and merchandise across the country and have serious consequences for the economy. About 6 percent of the country’s gross domestic product is processed through UPS each year.
Last month union members voted overwhelmingly to authorize a strike. Teamsters leadership has said they will not work past the end of their current contract at the end of July. According to a statement from the union, no new talks are planned until early Wednesday morning.
It is unclear what exactly needs to be worked out. Compensation was a key issue in the negotiations, as were questions about creating more full-time jobs and UPS’s reliance on a lower-paying delivery tier.
The union has criticized the wage increases included in the company’s previous offers, which it says have not kept pace with the cost of living, particularly for part-time workers. Company drivers average $95,000 per year, part-time drivers average $20 per hour after 30 days.
The two sides have reached tentative agreements on a number of issues, including fitting new vehicles with air conditioning and conditions that would prevent the installation of driver-facing cameras.
The negotiations come as UPS faces declining sales and significant competition for its core business. The company reported revenue of $22.9 billion in the first quarter, down 6 percent from a year earlier. Operating profit fell 21.8 percent to $2.5 billion.
There are solvent competitors who are investing massively in expanding their logistics networks. The US Postal Service is launching a $9.6 billion plan to electrify its fleet over the next five years, including adding 66,000 delivery vehicles.
This is an evolving story and will be updated.
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