How could strike of UPS employees affect you, supply chain?

Cheryl McCloud, The Daytona Beach News-Journal
·5 min read
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As talks between United Parcel Service and the International Brotherhood of Teamsters continue, speculation is increasing on what will happen if employees walk out at the end of July.

The Teamsters represent more than 340,000 package delivery drivers and warehouse logistics workers nationwide, which is more than half of the company’s workforce in the largest private-sector contract in North America.

If a strike occurs, it would be the first since a 15-day walkout by 185,000 workers crippled the company 25 years ago, according to the Associated Press. It also would be the largest single-employer strike in U.S. history.

The Teamsters voted in June to authorize a strike if a deal isn’t reached before July 31.

UPS said in 2020 the shipping company transports more than 3 percent of global gross domestic product and about six percent of U.S. GDP daily.

That means a strike would carry with it potentially far-reaching implications for the economy, particularly the supply chain, which has just begun to recover from pandemic-related problems.

UPS Airlines pilots who are members of Independent Pilots Association union reportedly would support the picket line, as they did in 1997.

UPS by the numbers

  • UPS was founded in 1907 in Seattle, Washington.

  • There are about 500,000 employees worldwide, with about 340,000 represented by the Teamsters.

  • The company serves more than 220 countries and territories with almost 2,000 daily flights.

  • The company returned about $8.6 billion to shareholders in the form of dividends and stock buybacks in 2022, and forecasts another $8.4 billion for shareholders this year.

How serious would a UPS Teamsters strike be?

The U.S. economy depends on logistics and shipping industry. Remember those bare shelves during supply-chain problems during the COVID pandemic?

Customers could see slower delivery of goods to their homes, higher prices on products and shipping, and yet another breakdown of the supply chain, according to the Associated Press.

“This strike is a serious threat to the U.S. economy,” Patrick Anderson, president of Anderson Economic Group, a Michigan think tank with expertise in the economic costs of strikes told CNN Business.

“The sheer scale of the number of people and the breath of impact across the country is very serious. And the degree to which us economy has become dependent on fast delivery of small items that can be carried by UPS hasn’t really been tested.”

UPS has grown since its last strike in 1997 and has become even more integral piece of the U.S. economy, with consumers relying on swift delivery of most essential home items, according to the Associated Press.

Small businesses that rely on UPS could be left looking for alternative shipping options if the company's remaining workforce can't meet demands during a strike.

What could strike mean? UPS employees authorize strike. What that means for you.

What happened during the 1997 UPS strike?

The last time the UPS Teamsters had a strike was in 1997. The 15-day strike by 185,000 workers “largely crippled the world's largest package delivery company,” according to a New York Times article from August 1997.

“The strike hobbled package deliveries around the nation, cutting UPS' volume to less than 10% of normal and nearly overloading the post office and Federal Express,” the New York Times reported.

If there's no UPS, what are the alternatives and could they handle it?

FedEx: In the event of a strike affecting the shipping industry, FedEx announced July 6 that its priority is protecting capacity and service for existing customers. Shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, were encouraged to begin shipping with FedEx now.

Will FedEx benefit from strike? As UPS and Teamsters hit contract impasse, how much does FedEx stand to benefit?

U.S. Postal Service: USPS on July 10 officially launched ground advantage, a new way for customers to ship packages that is replacing three existing postal offerings.

Officials said Ground Advantage will be simpler to use and more reliable and puts the organization in a good position to handle the influx of customers if a strike were to happen.

Jacqueline Strako, an executive vice president at USPS who serves as the chief commerce and business solutions officer, said workforce and other efforts would ensure the agency “absolutely can” handle more workloads if a strike were to happen.

Amazon: While Amazon has its own delivery service, it still could feel an impact from a UPS strike.

UPS’ revenue tied to Amazon fell from 13.3% in 2020 to 11.3% in 2022, according to a UPS securities filing.

Amazon needs UPS to deliver in areas where Amazon’s sprawling network of logistics facilities hasn’t yet reached, according to supplychaindive.

What do the Teamsters want from UPS?

According to Teamsters Local 89, the demands from the union include no more excessive overtime, no more two-tier pay, higher part-time pay, more full-time jobs, job security for feeders and package drivers, and video camera and harassment protection.

Air conditioning in UPS trucks? Air conditioning coming to UPS vehicles for first time to combat heat hospitalizations

According to UPS, the company believes the union will bargain over job creation and opportunities, pay and benefits, paid time off, part-time jobs, two-tier drivers, overtime, personal vehicle drivers, heat safety, and vehicle cameras.

This article originally appeared on The Daytona Beach News-Journal: UPS, Teamsters strike could disrupt supply chain, slow deliveries