What Looming UPS Strike Would Mean For PA Consumers And Businesses

PENNSYLVANIA — Thousands of UPS drivers in Pennsylvania could go on strike by the end of the month if they’re unable to resolve differences over cost-of-living raises and increasing part-time workers’ pay.

The current contract for the 340,000 UPS workers nationwide that are represented by the International Brotherhood of Teamsters is set to expire July 31. In Pennsylvania, Teamsters said more than 19,000 UPS delivery drivers and warehouse logistics workers are represented by the union. There are 20 Teamsters Local Union chapters across the Keystone State.

UPS Teamsters overwhelmingly voted for a strike authorization last month, and Teamsters General President Sean O’Brien said an Aug. 1 strike now appears inevitable. Teamsters at UPS locations "continue to reinforce strike plans and hold practice pickets," the union said Thursday as O'Brien met with workers on the ground in New Jersey.

O'Brien, the head of the union representing 340,000 UPS workers, gave the shipping giant a Friday deadline to improve its offer after what he called an "appalling counterproposal" earlier this week.

The threat of a strike by Teamsters Union-represented package delivery drivers and logistics workers comes as Pennsylvania residents become increasingly reliant on package deliveries.

UPS moves about 24 million packages a day across the country — an amount equivalent to 6 percent of the nation’s gross domestic product, the company said. More than 70 percent of UPS’s U.S. employees are represented by a union.

A strike could make it harder for Pennsylvania residents to get everything from food to medical supplies.

“A lot of people will be affected,” Philadelphia Teamsters Local 623 secretary-treasurer Richard Hooker told the Philadelphia Inquirer. “A lot of small businesses, a lot of corporations, will be affected by us not being able to work.”

Even before the pandemic, consumers were swapping in-store shopping for door deliveries, and that could make a strike more disruptive than the last strike in 1997 when 185,000 UPS workers picketed, crippling the company. With some 340,000 workers — more than half of UPS’ total workforce — set to strike, the economic pain could be more widespread. If it happens, it would be the largest single-employer strike in U.S. history.

Small businesses in Pennsylvania that rely on UPS for package deliveries may have to find alternative shipping options if the company’s remaining workforce isn’t able to meet demand during a strike.

“There’s no good that comes from this for the consumer. There’s no good that comes from this for the merchants. And there’s no good that comes from other players in the industry,” Gregg Zegras, president of Pitney Bowes’ global e-commerce business unit, told Vox.

Jason Miller, interim chair for the supply chain management department at Michigan State University’s business school, agrees.

“If I had to put it on a scale with one being not at all disruptive and seven being pure economic catastrophe, this is probably a five right now,” he told Vox.

UPS stands to lose in the strike, too. Logistics consultant Satish Jindel told Reuters that FedEx, which handles about 12 million packages a day, has the capacity to handle three or four million more “easily without sweating,” adding, “And they would love to keep it.”

Competitors such as FedEx and the U.S. Postal Service could pick up some deliveries, but logistics networks are already strained. UPS handles about quarter of U.S. package deliveries, according to the shipping technology company Pitney Bowes, which collects data on the package delivery industry.

Negotiations broke down last week, with each side blaming the other for the impasse.

UPS has already agreed to get rid of its two-tier wage system, which the Teamsters said underpaid part-time workers. And they’ve agreed to add air conditioning to UPS trucks, a major victory for drivers amid mounting reports over the past few years of drivers suffering heatstroke and having to go to the emergency room.

The main sticking point now concerns wages paid to part-time workers. In Pennsylvania and around the nation, the starting rate for part-time UPS employees is $15.50, according to Teamsters. The average part-time UPS employee makes $20 an hour after the introductory period of 30 days. After 30 days, they’re eligible for health insurance and tuition reimbursement.

UPS offered $6 or $7 less per hour for part-timers than the union wanted, O’Brien told the industry publication Supply Chain Dive.

The Teamsters Union says any tentative agreement must be endorsed by its national committee before it is sent to the locals for ratification. The union has said it will not negotiate past the expiration of the current contract.

UPS’s profits over the past two years are more than three times what they were before the pandemic. UPS returned about $8.6 billion to shareholders in the form of dividends or stock buybacks in 2022, and forecasts another $8.4 billion for shareholders this year.

In its third-quarter 2022 earnings report, UPS reported revenues of about $24.2 billion, up about 4.2 percent from the same period a year prior. That calculates to about $170 million UPS stands to lose every day its workers strike.

The negotiations could help set a new standard for all package delivery companies. Overall, 1.115 million workers are employed in the courier and messenger industry, according to the Federal Reserve Bank. UPS employs about a third of those workers.

“This is a crucial time in American labor,” Hooker told the Philadelphia Inquirer. “We’re just demanding more because we have been pushed to the brink, and we’re not gonna settle for anything less than what we are worth.”

The Associated Press contributed reporting.