Key Insights into the UPS and Teamsters Labor Negotiations

The United Parcel Service (UPS) and International Brotherhood of Teamsters (Teamsters) are in the final stages of negotiating a new, long-term collective bargaining agreement for approximately 340,000 UPS employees. These negotiations will establish compensation, benefits, work hours and conditions for several years, so while both sides report significant progress in reaching an agreement, it is not unusual for talks to become strained before a deal is reached.

Background

UPS is one of the world’s largest package delivery companies and a leading provider of global supply chain management solutions, including a variety of transportation, distribution, logistics, and customs services. Every day UPS moves approximately 5% of the nation’s GDP – or roughly $3.8 billion of goods.

Important to performing this work are the approximately 340,000 UPS package car drivers, feeder drivers, loaders, sorters, clerks, and others, who are represented by the Teamsters. Indeed, UPS is the single largest employer in the Teamsters union.

The current contract, which expires on August 1, 2023, is unpopular with the new Teamsters’ leadership – Sean O’Brien, the Teamsters’ new president, promised to reverse several of its provisions as part of his campaign for the union’s top post.

Despite this, both sides have reported productive discussions since negotiations began in April to negotiate a new agreement. In late June, Mr. O’Brien expressed optimism to reach a new agreement by early July. To date, both sides have reached tentative agreements on 55 issues – which includes virtually all of Mr. O’Brien’s stated priorities such as installing new heat safety measures for UPS vehicles, the use of technology, prohibiting in-vehicle cameras, and eliminating the “22.4 drivers” (also known as “combo drivers”) classification. This leaves a handful of issues to resolve.

In recent days, news reports show heightened rhetoric by the Teamsters, including demands for a “last, best, and final offer,” and walking away from the negotiating table. While these actions are cause for concern, they are not unexpected. Historically, contract negotiations can become more heated during discussion of the most important items. Further, it is important to remember that the current contract remains in place until August 1. As long as a contract is in place the Teamsters may not legally strike, meaning time remains to negotiate.

A Broader Look

The UPS-Teamsters negotiation is the latest labor negotiation to capture the nation’s attention. Last year, the six largest freight railroads reached an agreement with their twelve unions only after the threat of a national rail strike and the direct intervention of the Biden Administration and Congress. More recently, the West Coast port terminals reached an agreement with the International Longshore and Warehouse Union (ILWU) following a year of negotiations and service stoppages and immediately after the Chamber called for President Biden to directly intervene in helping finalize the negotiation. 

Just like with the current UPS-Teamsters negotiations, rhetoric was heated in these two negotiations, especially towards the end.

Bottom Line

UPS and its workers are incredibly important to our economy and the business community. For 100 years, UPS has collaborated with the Teamsters to provide industry leading pay & benefits for their employees, while achieving industry-leading marks on safety and on-time-performance. 

U.S. businesses and American consumers rely on UPS and its workers for timely deliveries of everything from critical medical supplies, agricultural equipment, baby formula, semiconductors, school supplies, and other critical business goods. While the Teamsters have increased their rhetoric in recent days, it’s important that both sides stay at the negotiating table for the sake of not just UPS and the Teamsters rank and file, but for U.S. businesses and consumers.

About the authors

John Drake

John Drake is vice president for transportation, infrastructure, supply chain policy at the U.S. Chamber of Commerce, the world’s largest business advocacy organization. In his role, Drake is responsible for representing the business community on transportation, infrastructure, and supply chain issues before Congress, the administration, the media, the business community, and other stakeholders. Drake is also a member of the Commercial Customs Operations Advisory Committee, which advises the U.S. Customs and Border Protection on improvements to U.S. trade.

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