A marathon negotiating session between UPS and the Teamsters union ended early Wednesday morning with both sides accusing the other of walking away from the table. There are no signs of a contract settlement in sight.
The current contract expires July 31, which means 340,000 UPS workers could go on strike August 1. The two sides had been trying to reach a deal to stop nervous UPS customers from starting to move their business to rival delivery services including the US Postal Service and nonunion FedEx.
Despite a strike deadline being almost four weeks away, some customers are likely to sign long-term deals with UPS competitors by the end of this week if there is not a tentative agreement between the two sides, said Satish Jindel, president of ShipMatrix, a software provider that works with parcel shippers. Many in the shipping community had been looking for a deal between UPS and the teamsters by the end of the July 4 holiday weekend, he said.
“This is a negative development,” he said about the lack of a deal. “If they don’t have a handshake this week, both UPS and Teamsters will pay a price.”
Jindel said that during that last strike at UPS in 1997, the company was able to recapture 90% of its business once the strike ended. He said it might be able to only recover 70% of its business in a strike this time because of a greater number of alternatives. FedEx did not have a lower-cost ground service in 1997, and the Postal Service was not set up to handle as many package deliveries. Amazon also has its own delivery service now.
“The clock is ticking faster now than it was last week,” he said.
The two sides had previously said there had been agreement on a large number of issues already, including UPS promising to start buying only air conditioned delivery vans, which currently do not have air conditioning, and to retrofit its existing fleet of 95,000 vehicles with some features to reduce the heat in the cargo area. The union said that beyond comfort, the high heat in the vans poses a safety risk for its members.
But the union said its negotiating committee has unanimously rejected the company’s most recent economic offer. It accused the company of breaking off talks.
“This multibillion-dollar corporation has plenty to give American workers — they just don’t want to,” said Teamsters President Sean O’Brien. “UPS had a choice to make, and they have clearly chosen to go down the wrong road.”
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