More than 300,000 United Parcel Service Inc. workers hurtled toward a strike after the company failed to reach an agreement with the International Brotherhood of Teamsters, threatening to plunge the US supply chain into disruption.
Weeks-long talks between UPS and the Teamsters fell apart early Wednesday morning in Washington after stretching through the July 4 holiday, with beleaguered negotiators emerging just after 4 a.m. to say the talks had collapsed.
“The company walked out,” Teamsters spokeswoman Kara Deniz said.
A UPS official declined to comment immediately after the union’s announcement.
There is still time to reach a deal. The current labor contract — the largest private-sector union agreement in the US with 330,000 workers — expires at the end of July, but labor leaders have said they need a few weeks to educate their members and persuade them to ratify it. Union employees will not work beyond July 31 when the current contract expires, Deniz said, and no more bargaining sessions are scheduled.
Read More: UPS Agrees to Ax Two-Tier Wage System in Win for Teamsters
The high-stakes negotiations had been teetering for several days, with the Teamsters walking away from the bargaining table, insisting a strike was imminent, only to return. They then struck a deal with UPS to eliminate a two-tier wage system that the union said underpaid part-time drivers.
But the two sides ultimately couldn’t agree on larger issues surrounding pay and cost of living increases. Full-time delivery drivers make $95,000 a year, and tractor trailer drivers typically make six figures, according to UPS. But the Teamsters say wages haven’t kept up with the profits the company raked in during the Covid-19 pandemic — or matched the risk workers faced to deliver packages.
UPS is confronting difficult headwinds with package demand declining and customers looking to claw back the surcharges and price increases that couriers applied liberally during the pandemic. The market weakness compelled one of UPS’ biggest competitors, FedEx Corp., to undertake an effort to slash $4 billion in costs by fiscal 2025 and reap another $2 billion of savings by fiscal 2027 from the restructuring of its networks.
Tough Talk
On the Teamsters side, talks were led by union President Sean O’Brien, who campaigned on taking a tougher stance with UPS than his predecessor, James P. Hoffa. He lived up to that promise during talks, hurling public insults at the company and practically daring its leaders to call his bluff.
The possible strike adds to a wave labor unrest in the transportation sector over the past couple years, with a backlog at the ports leading to a protracted dispute with West Coast longshoremen and Congress intervening last year to prevent a nationwide rail strike.
--With assistance from Thomas Black.