UPS strike looms after stalled negotiations. Experts say that could result in delays, lost money

A potential UPS worker strike over wages, air-conditioning in trucks and pensions after stalled negotiations could have serious consequences.

By one estimate, a UPS strike could cost more than $7 billion if it goes on for 10 days, accordingto Anderson Economic Group.
A chunk of that lost money would be striking workers not receiving a paycheck. An estimated 340,000 workers that are part of the Teamsters union could strike across the country if negotiations aren’t met by Aug. 1. UPS customers across the country could lose $4 billion, causing disruptions in various sectors, from medical suppliers to the auto industry, said Shay Manawar, senior analyst for Anderson Economic Group.

“It's a serious concern,” Manawar said. “Not just for those who are employed at or through Teamsters or UPS, but also who use those facilities, for example, small mom-and-pop shops, and businesses who rely upon UPS and their services, to ensure that their revenues keep flowing.”

In the Dallas-Fort Worth area alone, a strike would affect about 10,500 workers, said David Reeves, president and principal officer of Teamsters Local 767. After negotiations came to a standstill on July 5, workers have been practicing picketing at UPS sites across the area, including in Fort Worth. Among the discussions in the new contract is adding air-conditioning units to all new trucks to avoid heat-related injuries.

But the negotiations have stalled out over pensions and wages, Reeves said.

“We believe our members went and made UPS a very successful company throughout the pandemic,” Reeves said. “This gives UPS the opportunity to show our members, their employees, exactly what they're worth.”

UPS generated $11.3 billion in profits in 2022.

What if UPS workers strike?

UPS said the company is focused on reaching a contract by Aug.1, but it istraining employees as part of a business continuity plan if a strike does happen. UPS said in a statement it is meeting at the bargaining table next week, before the deadline to reach a deal.

The company handles 24 million packages a day. The U.S. Postal Service and FedEx can only handle so many packages to offset supply chain delays. Cliff Defee, an associate professor of supply chain management at the Texas Christian University Neeley School of Business, estimates 40-50% of packages can’t easily be shifted to other carriers.

“Locally if you're a small business, or if you are someone that's getting deliveries at home, as a consumer from UPS, you can expect to see some service failures,” Deffee said. “And as a small business customer, the inability to get some shipments out on time.”

It’s still uncertain whether workers will strike. Many negotiations go until the last minute, Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations.

Striking can be stressful, both for the company and employees striking. Striking employees won’t get paid while they strike. UPS might face complaints and lost business. As of now, UPS and Teamsters negotiators have until 11:59 p.m. on July 31 to solidify a contract.

“That's when I would expect you to hear a resolution,” Wheaton said. “That's if they want to avoid some of the really big heartache and pain that the strike would cause.”

Then again, Wheaton said, a lot more unions are willing to strike. Large leaps in prices leave a gap between the company’s last contract and increased prices. A low unemployment rate means plenty of available jobs and the perception that workers can go somewhere else if things don’t work out. People also have a positive impression of unions, a high not seen since the 1960s, Wheaton said.

Right now, actors and writers in Hollywood are striking.United Airlines pilots recently got a 40% raise over four years in recent negotiations, spurring pilots at Fort Worth-based Americans Airlinesto call for a bargaining redo. Flight attendants at American Airlines are also voting to authorize a strike.

“People are hitting a tipping point,” Wheaton said. “And are willing to try to say, you know what, if we ever had a time to try to get a better deal, now is the time.”

The last UPS strike was in 1997, and lasted 15 days. The last contract was ratified in 2018.

Seth Bodine is a business and economic development reporter for the Fort Worth Report. Contact him at seth.bodine@fortworthreport.org and follow on Twitter at @sbodine120. 

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