UPS addresses Teamsters contract, set to expire this summer, in earnings call

A key theme in Atlanta-based global freight transportation and express delivery and logistics services provider UPS’s fourth quarter earnings call yesterday centered around its contract with the Teamsters, which is set to expire on July 31.

On the earnings call, UPS CEO Carol Tomé made it clear where UPS is coming from, in. advance of its negotiations with the Teamsters, noting that the Teamsters have very important to the company for the better part of the last 100 years.

“Our approach with the Teamsters is a win, win, win; win for the Teamsters, win for our employees, and win for UPS and our customers,” she said. “I would submit that a win, win, win is very achievable because we are not far apart on the issues. And let me make this real for you by giving you a few examples. First, both Teamsters and UPS agree that a healthy and growing UPS is good, good for Teamsters, good for our people, and good for our customers. In fact, we've added more than 70,000 Teamster jobs since 2018. So, we're aligned that a growing and healthy UPS is good. To be growing and healthy, we need to be competitive and make sure that our offerings meet the needs of our customers.”

And she added that a lot has changed since the last time UPS negotiated its current contract with the Teamsters.

“[R]ecipients want their packages delivered when, where, and how they want them delivered, which means we can…delivery will become table stakes,” she said. “Teamsters fully acknowledge that but have worried about the pressures placed on our workforce with weekend operations. And they refer to that [as]] the sixth punch, which is when people work six days a week. We share the same concerns. I don't want people working six days a week unless they want to. So, we're aligned on this. We just need to get to the bargaining table and work it out.”

This is not the first time UPS and the Teamsters have been in high-profile labor negotiations. In 1997, UPS Teamster workers went on strike for more than two weeks. Teamsters’ officials described that ordeal as a “high-stakes shutdown over Teamster jobs and benefits.” And they added that UPS wanted to take over members’ pensions, with management’s goal being to freeze pension benefits and replace pensions with 401k plans, while also noting that UPS wanted the right to increase subcontracting of good feeder jobs. Low-wage part-time jobs were on the rise.

At a January Teamsters meeting of the UPS National Screening Committee in Washington, DC, Teamsters General President Sean M. O’Brien made it clear that the Teamsters are focused on getting a new deal done—and getting what they want out of a new deal.

“We’re going into these negotiations with a clear message to UPS that we’re not going past August 1,” O’Brien said. “We have to deal with 22.4s, PVDs, subcontracting, part-time wages and other issues that we’re taking a hard line on with the company.” 

An industry consultant told LM that it seems that UPS feels this potential strike is a very real possibility, but they are controlling the messaging to not insinuate fear amongst their customers.

“Carol Tome indicated ‘Our goal with the teamsters is win- win- win,’ while also mentioning they are ‘building contingency plans,’” he said. “To me, this means they are hoping for the best, but also planning for the worst (strike). Although the strike of 1997 occurred over 20 years ago, many shippers have not forgotten. Based on the current uncertainty within the industry, I believe UPS truly feels the pressure of this possible strike, but they are not trying to worry shippers in fear of many building their own contingencies in preparation.”