Teamsters Ratify New Five-Year Labor Contract With UPS

Date: Wednesday, August 23rd, 2023
Source: Wall Street Journal

The International Brotherhood of Teamsters said its members have ratified a new five-year, $30 billion contract with United Parcel Service, ending the prospect of a labor standoff that could have been damaging for U.S. supply chains.

UPS UPS 0.86%increase; green up pointing triangle and union leaders last month agreed to a pact that would cover roughly 330,000 package-delivery drivers and package sorters. The prior contract expired July 31.

The Teamsters said Tuesday that 86.3% of members voted to ratify the contract, which is the highest vote for a contract for Teamsters at UPS. The union has said the contract provides raises for new part-time workers as well as current employees.

The UPS-Teamsters contract is the largest collective-bargaining agreement involving a private employer in North America. It also covers the majority of UPS’s U.S. workforce, which totaled 443,000 at the end of last year.

While negotiations were ongoing, Teamsters members voted to authorize a strike if a deal wasn’t reached, a move that could have harmed the supply chains of many companies. UPS moves about 5% of the country’s gross domestic product, or roughly $3.8 billion of goods every day, according to the U.S. Chamber of Commerce.

Earlier this month, UPS Chief Executive Carol Tomé said that the new agreement restores labor certainty and addresses the concerns of workers, shareholders and the company. She said that by the end of the new contract, the average full-time driver would make $170,000 annually in pay and benefits. She added that UPS is focused on winning back customers that moved business away from the company because of the threat of a strike.

Under the agreement, UPS would pay new part-time workers a wage of $21 an hour, the Teamsters said. Currently, starting part-time hourly wages are $16.20, though it could be higher in places where there is more competition for labor.

Existing workers would get a raise of $7.50 an hour over the life of the contract, including a $2.75-an-hour pay bump this year.

The UPS pact with the Teamsters reflects the landscape for transportation workers, many of whom have called for earning better pay and recognition for showing up through the health crisis when other staff was able to work remotely.

American Airlines pilots Monday ratified a new contract that would boost wages by more than 40% over its four-year term after the carrier agreed to sweeten terms to match a rival’s deal.

Negotiations involving other groups of transportation workers haven’t gone as smoothly. Pilots at FedEx rejected a tentative agreement in July. The cargo airline pilots will remain paid under the terms of the existing contract for now. The union and the company will go back to the negotiating table for a new agreement.

Protracted labor negotiations this year have irked businesses and caused some supply-chain disruptions. The union representing auto workers, which is negotiating a new four-year contract, said last week that its negotiations with Detroit automakers have been sluggish. Talks had not progressed beyond noneconomic issues, the United Auto Workers union said then, and the existing contract expires Sept. 14.

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