The potential impact of the looming UPS strike

Later today, UPS and the Teamsters Union, which represents 340,000 UPS workers, will once again be sitting across the negotiating table. And like meat hanging from a ceiling, the steaks stakes are high – the two sides will be working to avert America’s biggest strike in 60 years.

What’s at stake

If a deal isn’t reached before next Tuesday, the union has promised to walk off the job. Should that happen, it would have a very real impact on the US economy.

• UPS delivers ~24 million packages per day – or about a quarter of all US parcel shipments. And if its workers strike, analysts say this shipping volume could not feasibly be absorbed by competitors like FedEx and USPS.
• To put a number to this problem, a 10-day walkout would cost the US economy an estimated ~$7 billion – and consumers would bear at least some of the brunt. According to analysts, a walkout could add up to 0.2% to the annual inflation rate and would almost certainly impact shipping times overall.

💬 The asks: Most of the non-economic components of the new five-year contract have already been hammered out, per negotiators. UPS agreed last month to a range of new heat-safety protections, including bringing air conditioning to its iconic brown delivery fleet for the first time.

But one of the key sticking points remaining is the issue of pay for part-time workers. Neither side has made their offers public, though Bloomberg reports the difference is as much as $6 to $7 per hour.

📸 Big picture: As they say, there’s nothing new under the sun. And in many ways, the context for this year’s negotiations resembles the circumstances that led to a nationwide Teamsters walkout at UPS in 1997 (the last time UPS workers went on strike). The company was also in the midst of several profitable years, and the rapid growth in its part-time workforce loomed large, the NY Times reports.

• That particular strike involved ~185,000 workers, lasted 15 days, and cost UPS at least $600 million. The union centered its demands on securing better wages and job security – and secured employee gains on both fronts.