Breaking News: UPS Strikes Deal to Prevent Massive Union Walkout! You Won’t Believe How They Did It!

NEW YORK — UPS on Tuesday reached a tentative contract agreement with its 340,000-person union, potentially averting a strike that threatened to disrupt logistics nationwide for businesses and households alike.

The agreement was announced after UPS and the Teamsters came back to the negotiating table Tuesday to talk over remaining sticking points in the largest private-sector contract in North America. Negotiators had already reached tentative agreements on a host of issues but remained at odds over pay for part-time workers, who make up more than half of the UPS employees represented by the union.

The Teamsters called the tentative agreement “historic” and “overwhelmingly lucrative” in a prepared statement.

Under the tentative agreement, existing full- and part-time UPS union workers will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the five-year contract. The agreement also includes a provision to increase starting pay for part-time workers, which the union had called the most at risk in the company’s workforce of being exploited and cast aside. Starting pay for part-time workers will be $21 per hour, it said, up from $16.20 today. The average pay for part-timers had been $20, according to the union.

The two sides had already agreed tentatively to make Martin Luther King Jr. Day a full holiday for the first time, and to end forced overtime on drivers’ days off. Tentative agreements on safety issues had also been reached, including equipping more trucks with air conditioning. UPS agreed to add air conditioning to U.S. small delivery vehicles purchased after January 1, 2024.

They had also agreed to eliminate a lower-paid category of drivers who work shifts that include weekends, and to convert them into regular full-time drivers.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” Carol Tomé, UPS chief executive officer, said in a written statement. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

Voting on the new contract begins on Aug. 3 and concludes Aug. 22.

Tim Nichols, president of the Teamsters Local 878 in Little Rock, said the announced agreement is “huge” and he believes “the membership is gonna be very pleased” with it.

The 878 covers the eastern half of the state and has a membership of about 2,400, but Nichols said it represents “probably double that.” Roughly 1,000 of its paid members are UPS employees in Little Rock, Blytheville, Jonesboro, Pocahontas, Forrest City, Searcy, Conway, Pine Bluff and Dermott. The Local 373, based in Fort Smith, covers the western half of the state, where Nichols estimated another 1,000 UPS employees are members.

Nichols, who has been part of the 878 since 2002 and is a former UPS employee, said about 60% of the UPS employees who are members of the 878 are part-time employees, which he noted is reflected in national UPS employment totals.

Under the prior agreement, Nichols said part-time employees were guaranteed three-and-a-half hours a day, five days a week.

Of the new jobs that would be created by the agreement, Nichols said “that’s 30,000 new full-time jobs for people that could be life-changing.”

Nichols said it would “just be a guess” how many of those jobs would be created in Arkansas, but “we’ll certainly get a percentage” and it would be based on what the job classification is.

“Without knowing the details there, if part of those jobs are, say, over-the-road sleeper team drivers, then we’ll probably get 10 or 15 of those in our local,” Nichols said. “If there are jobs that are going to be created inside the actual hubs that will not be driving jobs, would be things like sorters … janitors, what we call porters, then we’ll probably get maybe 50 of those in Arkansas.”

In a separate interview conducted moments before the new agreement between UPS and the Teamsters was announced, Nichols was asked about the state of labor in the country in general when major strikes, like the ones in Hollywood by the writers and actors guilds, and the potential of a UPS strike, are major forces in the news cycle.

“I’ve had conversations, not just with with upper-level management people at UPS, but several different companies over the past several years,” Nichols said. “Companies that have been extremely profitable. And in our conversations, I’ve tried to share that at some point, we want companies to make money, lots of money, because that’s what supplies our members with jobs. But when large corporations don’t acknowledge that the employees are primarily the ones that are out there, with sweat, blood and tears that are producing this profit for the organization — if they don’t acknowledge that and acknowledge that by sharing the wealth, then eventually we’re gonna end up in this situation.”

Nichols added that “people have been kind of patient for years and years. Assuming that the right thing would be done by them. And now they’re in situations where the cost of their gasoline and the cost of their groceries, everything has gone up to the point that it’s taken such a large bite out of their wages, employees don’t feel like they have any choice anymore to just wait on the graces of their employer.”

Profits at UPS have grown more than 140% since the last contract was signed, as the arrival of a deadly pandemic drastically transformed the manner in which households get what they need.

Unionized workers argued they were the ones shouldering growth at the Atlanta company and appeared deadset on righting what they saw as a bad contract.

The 24 million packages UPS ships on an average day amount to about a quarter of all U.S. parcel volume, according to the global shipping and logistics firm Pitney Bowes. As UPS puts it, that’s the equivalent of about 6% of the nation’s gross domestic product.

The consulting firm Anderson Economic Group estimated that a 10-day strike would have resulted in losses of more than $810 million for UPS.

The last breakdown in labor talks a quarter-century ago led to a 15-day walkout by 185,000 UPS workers that crippled the company. The company has less market share compared to then, but a walkout would have had far-reaching implications this time around with consumers more reliant on online shopping and speedy deliveries.

AEG said a 10-day UPS strike could have cost the U.S. economy more than $7 billion and triggered “significant and lasting harm” to small businesses, household workers and online retailers across the country.

Logistics experts had warned that all of the other shipping companies combined would not have had the capacity to handle all the packages that would flow their way during a work stoppage, and that prices on shipping and goods would eventually increase. Customers who shop online could have faced more shipping fees and longer waits.

In recent weeks, large and small businesses worked to create contingency plans should there be a work stoppage at UPS.

Joseph Debicella, a small-business owner who runs an online site that sells bridesmaid gifts, said his company ships roughly 50% of its orders through UPS. He hasn’t used FedEx before, but created an account with the company two weeks ago as chatter over a strike picked up. He was also hearing about the negotiations from his UPS driver, who told him his deliveries were getting lighter as the July 31 deadline for a new contract neared.

Debicella, who lives in Charlotte, N.C., says he’s been concerned about costs since he provides free shipping to customers who spend more than $99 on the site.

The Retail Industry Leaders Association, a national retail trade group that counts retailers Best Buy, CVS Health and Kohl’s among its members, called the tentative pact “an enormous relief to retailers, who have been navigating the possibility of a strike and the associated uncertainty for weeks.”

“We’ve learned all too well over the last several years the impact supply chain disruptions can have,” the group said in a statement. “We’re grateful that this challenge, which would have had a price tag in the billions of dollars and a long runway for recovery, was avoided.”

Information for this article was contributed buy Haleluya Hadero, Matt Ott and Anne D’Innocenzio of The Associated Press, Daniel McFadin of the Arkansas Democrat-Gazette and Lauren Kaori Gurley of The Washington Post.