With the expiration of the current contract between the Teamsters and UPS less than three weeks away, lots of people are wondering: Will there be a strike?
Guess what? Everyone is stumped!
What we do know however is that if your company has parcel shipments, you better have a contingency plan that addresses the possibility of a strike or some level of labor disruption at UPS. Suffice it to say that since UPS moves approximately 20 plus million packages EACH DAY even a very short strike could have a major impact on supply chains around the world.
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As we have covered in some recent Two Minute Warnings, there have been numerous highs and lows throughout the negotiations with UPS and the Teamsters and the situation is extremely fluid.
Last week, the Teamsters demanded a “final and best” from UPS by July 5. To nobody’s surprise, UPS delivered their offer and the Teamsters rejected the offer. Then, to make matters a bit more interesting, around 4am in the morning of July 5, the Teamsters walked away from the negotiating table. Right now there is no date for next steps or news about how they plan to communicate. The parties are reportedly far apart on some important economic matters, including the pay structure for part time workers.
Right now no one knows whether there will be a strike. If the Teamsters follow through on the threat from their President, Sean O’Brien, that there will be a strike if the agreement is not fully ratified by July 31, then a strike is imminent. The Teamsters imposed the July 5 deadline because they said it would take that much time to get the agreement voted on and ratified by their members. Some experts believe that if the Teamsters will accept a “hand shake agreement” with UPS and continue to work pending the ratification process, they can avoid a strike.
Two Resources for Managing Parcel Shipments
There are really two important issues to consider. First, how will your company respond if there is a strike? Second, how will the new contract affect your parcel costs? And for those FedEx shippers who are not too concerned about that second question, don’t kid yourself! A rising tide - or in this case rising wages - included in this contract with UPS will affect all parcel shippers!
To address these questions, we’ve created a valuable resource for you. Our new guide: “Strike or No Strike: How to Effectively Manage Your Parcel Shipping Portfolio Now and Into the Future.” We're providing this exclusively to shippers and to get a copy you can sign up here.
We also have another valuable resource that can help you analyze your parcel shipping activity called the Parcel Toolbox. This is an online portal that can help you with identifying shipping patterns, breaking down the financial impact of potential changes, and creating reports to assess your options. Sign up for a demo or get in touch to learn more.
Yellow Update
The Teamsters and Yellow have also gained a lot of attention in the past few weeks as tensions mounted over the One Yellow Initiative. After the second phase of this initiative was met with resistance, Yellow has asked the White House for intervention and filed a $137 million lawsuit against the Teamsters.
A measure of reprieve was granted to them last week according to FreightWaves, by the SEC granting them “a deal that waives certain covenants under its credit agreements.” And with the news that Yellow has sold a terminal in Compton, CA for $80 Million, and the proceeds were used to pay down debt, Yellow may see some forbearance from their lenders.
As we have previously stated, Yellow is no stranger to adversity. And for shippers who are wondering about why they should be concerned about Yellow's future, here is a sobering note: If there is consolidation in the LTL industry, it will likely result in higher LTL rates.
If you’d like to learn more about either of these issues or have questions, simply give us a call, send us an email, or schedule time to meet on Calendly.
