Port labor negotiations on the West Coast are progressing slowly after one year of talks. Also this week, negotiations between the Teamsters and UPS officially began.
Filling in for Jim Geraghty last month, I wrote a Morning Jolt about the then-forthcoming UPS negotiations. UPS is one of the last union strongholds in the private sector and one of the only places where union membership is growing. UPS has added 72,000 Teamsters-represented jobs since 2018. About 330,000 drivers and warehouse workers are Teamsters members, and 70 percent of UPS’s U.S. workforce is unionized.
SupplyChainDive reports that each side made its opening demands on Monday, and talks continued on Tuesday. These talks were supposed to start in mid-April, but the Teamsters demanded that UPS make a few regional agreements first.
Unlike the dockworkers, who have been working (notwithstanding some major disruptions) without a contract for almost a year, the Teamsters say they will not work if a new contract is not agreed to by July 31, the expiration date of the current agreement. Teamsters president Sean O’Brien campaigned on taking a more combative approach towards UPS when he was running to lead the union.
The SupplyChainDive story says:
The negotiations between UPS and the Teamsters have two facets, according to UPS. One is the National Master Agreement, covering topics like wages, healthcare and pensions. The other is the various supplemental agreements that address local topics in specific regions.
UPS CEO Carol Tomé said in an April 25 earnings call that the company and the Teamsters have established five subcommittees at the national bargaining table to focus on key areas of the contract, enabling the negotiation process to move faster.
Tentative agreements have already been reached on five issues, including more opportunities for union members to fill job vacancies prior to UPS hiring external workers, according to the Teamsters.
“What’s most critical about these early hours of national negotiations is that big gains are already being made and the Teamsters have made zero concessions to get them,” General Secretary-Treasurer Fred Zuckerman said in a statement Tuesday. “The progress made since yesterday at the national table has been hugely consequential for the rest of the bargaining process.”
UPS faces more competition than it did the last time the Teamsters struck against it in 1997, including from non-union FedEx, the Postal Service (which is now a much bigger player in the parcel market), and Amazon (which is currently UPS’s largest customer but is looking to move more of its deliveries in-house). Failing to make a deal could be more consequential for UPS because customers could move to competitors. FedEx has been courting UPS customers for months, noting the possibility of a strike.
All of which militates in favor of a deal being made, but O’Brien’s combative rhetoric (he called UPS a “white-collar-crime syndicate,” for example) combined with tight labor markets and high inflation could make a deal more difficult. The Teamsters would be foolish to throw away one of their last strong employer relationships for the sake of being the center of attention during a strike this summer.