UPS and Teamsters Union Reach Tentative Contract Deal for 340,000 U.S. Workers
In a major development for the transportation industry, UPS and its Teamsters union have reached a tentative contract deal for approximately 340,000 U.S. workers at the parcel delivery firm. This agreement comes just one week before a threatened strike that could have disrupted a quarter of the nation’s package shipments and cost the economy billions.
While the deal still needs to be ratified by union members, it is expected to be approved, marking a significant moment for transportation labor groups. This agreement strengthens their bargaining power, as they have gained increased support due to labor shortages and public appreciation during the pandemic.
Had the strike taken place as scheduled on August 1, customers may have turned to rival delivery companies like FedEx. However, with this contract in place, UPS can avoid such a scenario. The agreement includes historic wage increases, an additional paid holiday, and even air conditioning in UPS delivery trucks. It also eliminates a two-tier pay system and forced overtime for delivery drivers.
The International Brotherhood of Teamsters General President Sean O’Brien praised the contract, calling it a new standard in the labor movement. He commended UPS for not requiring any concessions from the union. UPS, on the other hand, declined to comment on the estimated financial impact of the agreement but stated that it rewards employees while maintaining competitiveness.
Although UPS shares initially rallied after the announcement, they closed down 1.9% on Tuesday. However, investors and business groups expressed relief and support for the agreement, given that a 10-day UPS strike could have cost the U.S. economy over $7 billion, according to estimates.
The deal also garnered praise from President Joe Biden, who highlighted its positive impact on workers and the economy. Interestingly, the Teamsters asked President Biden not to intervene in the negotiations.
Voting to ratify the deal is scheduled to take place from August 3 to August 22. If approved, full- and part-time UPS workers will receive significant wage increases. For example, in 2023, they can expect a wage increase of $2.75 more per hour. Part-time workers will receive double the general wage increases compared to the previous contract, with existing part-time workers enjoying a 48% average wage increase.
Investors are keeping a close eye on the new starting part-time wage, as analysts predict it could reach $25. This development will also put pressure on other delivery companies, including FedEx, whose pilots union is restarting talks after union members rejected a tentative agreement.
Furthermore, UPS faces competition from nonunion delivery rivals like Amazon, which pay workers significantly less. Following the news of the UPS contract announcement, shares of FedEx and Amazon closed up slightly.
In reporting this news, ‘Celebrity Beauty Buzz’ follows Reuters’ standards for accurate and factual reporting.
“Zombie enthusiast. Subtly charming travel practitioner. Webaholic. Internet expert.”