UPS Union Weighs Going On Strike

Out for Delivery

The UPS (UPS) Teamsters Union is holding a vote on whether or not to strike against the massive logistics company. The vote is expected to pass.

Even if the vote does pass, that doesn’t necessarily mean a strike will happen. A worker vote to authorize a strike is typically an early step to establish leverage in a union contract negotiation. The current contract is set to expire on August 1st.

But, with 330,000 members, a strike by UPS workers would be the largest single-employer strike in US history. And it could have a dramatic impact on any American who shops or sells online.

Negotiating the Deal

As is often the case, the UPS workers union seeks better wages and working conditions. The union has not publicly stated how much of a pay increase it’s seeking. But workers have voiced frustrations over the fact they have not enjoyed their fair share of UPS’s profit growth over the previous five-year contract period. Since 2018, the postal carrier’s net income soared from $6.3 billion to $11.3 billion last year.

Another major demand from the union is for UPS to outfit all 95,000 postal vans with air conditioning. Few of them currently have AC. UPS management has offered to install fans, but the union considers that insufficient.

Outsized Impact

A strike of this magnitude could have repercussions for both UPS and the US economy.

UPS delivers an average of 17 million domestic packages each day, accounting for roughly 6% of the US GDP. The volume is likely too great for FedEx (FDX) or the USPS to pick up the slack. Plus, if a strike occurs, it will happen during one of the busiest postal times of the year: back-to-school and end-of-year holiday shopping.

On the plus side, UPS CEO Carol Tomé is confident a deal will be reached and a strike avoided.

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