The Teamsters Union said on Wednesday United Parcel Service “walked away” from negotiations over a new contract, a claim the shipping giant denied, lobbing its own accusation that the union had stopped negotiating.
The two sides traded salvos in early morning statements as they attempt an agreement to prevent a strike when the current contract, which covers some 340,000 workers, expires at the end of the month.
Workers of UPS have already authorized a strike should the talks break down. Such a labor action would be the first since 1997 for UPS workers, in a strike that lasted 15 days, cost the company $850 million and sent some customers to rivals
Both the union and company officials have said before that they wanted a deal finalized to prevent a strike, which could put millions of daily deliveries at risk.
If a strike happens, UPS may struggle to get back the volumes it loses to rival FedEx (FDX.N), said Satish Jindel, president of logistics consulting firm ShipMatrix, as both delivery firms are facing weak e-commerce demand.
“Now UPS handles about 20 million (packages) a day, and FedEx is handling 12 million. So they have capacity for three or four million easily without sweating. And they would love to keep it,” Jindel said.
WORKERS’ BARGAINING POWER
After missing out on wage increases during the pandemic, unions are now pushing back on contract offers from companies grappling with labor shortages, seeking higher pay and better working conditions.
“The Teamsters have stopped negotiating despite UPS’s historic offer that builds on our industry-leading pay,” the company said, adding that the union should return to negotiations.
The union had earlier in the day said UPS made an offer that was unanimously rejected and that the company had “walked away from the bargaining table.”
“UPS had a choice to make, and they have clearly chosen to go down the wrong road,” said Sean O’Brien, general president at the Teamsters, which represents roughly 340,000 full- and part-time U.S. drivers, package handlers and loaders at the company.
UPS sweetened its offer last week, but O’Brien said it did not go far enough to reward workers who risked their lives to keep packages moving during the early days of the COVID-19 pandemic that fueled big profits for the company.
“Refusing to negotiate, especially when the finish line is in sight, creates significant unease among employees and customers and threatens to disrupt the U.S. economy,” UPS said on Wednesday.
Meanwhile, the National Retail Federation (NRF) urged the company and the union to continue talks and avert a strike.
“The NRF is disappointed by the breakdown in negotiations earlier today…avoiding a strike or other disruptions as we enter the peak shipping season for the holidays is critical for retailers,” said Jonathan Gold, vice-president for supply chain and customs policy at the trade body.
In case of a strike, retailers are looking to lean on the diversified delivery options they had chalked out during the disruptions caused by the pandemic.
“There are a lot of other tools in the toolbox that retailers have, including in-store pickup, crowdsource deliveries and other delivery services,” said Jessica Dankert, vice-president of supply chain at Retail Industry Leaders Association.
Shares of UPS closed down 2% at about $180.
By Abhijith Ganapavaram