Major UPS Strike Looming: Americans’ Packages Could Be in Jeopardy

A United Parcel Service (UPS) driver loads a cart with boxes before making a delivery in San Francisco on June 17, 2014. Justin Sullivan/Getty Images

Potentially hundreds of thousands of unionized United Parcel Service (UPS) workers could strike in the near future, in a move that could significantly impact the U.S. economy.

UPS has previously stated that it transports some 6 percent of the U.S. gross domestic product (GDP) on a daily basis and about 3 percent of the worldwide GDP, according to a news release. It means that a nationwide strike could have far-reaching effects on commerce, while impacting Americans’ orders and package-delivery services.

Global shipping firm Pitney Bowes says UPS has about about 37 percent of the United States’ total parcel market share among shippers in 2023, while it averaged about 24 million packages per day last year. FedEx has about 33 percent of the parcel market share, the U.S. Postal Service has 16 percent, and Amazon has about 12 percent, the firm said.

What do the Teamsters Want?

The UPS Teamsters contract ends on July 31, and if a deal isn’t made soon, a portion of the company’s drivers could go on strike this summer. The Teamsters posted photos of “Teamster practice pickets” in a social media post on Thursday, showing workers in UPS uniforms holding signs.

UPS has said that it is the United States’ “single-largest employer” of the Teamsters union, comprising some 300,000 delivery drivers, transportation workers, and warehouse employees.

In June, the union voted to authorize a strike if UPS doesn’t meet its demands by the end of the month. The Teamsters says the group wants “higher wages for all workers, more full-time jobs, an end to forced overtime and harassment from management, elimination of a two-tier wage system, and protection from heat and other workplace hazards.”

This week, the Teamsters warned that a strike is “imminent” and set a Friday deadline for the firm to “return a last, best, and final offer.” If an agreement isn’t met, the union added the shipping giant “risks putting itself on strike by August 1 and causing devastating disruptions to the supply chain in the U.S. and other parts of the world.”

The Teamsters are an international union that represents truck drivers and warehouse workers. Notably, the union gained some notoriety under former boss Jimmy Hoffa, who served as the president of the union from 1957 until 1971 but also became involved in organized crime and later disappeared under suspicious circumstances in 1975.

Problems?

UPS, in several statements, said that it has been able to find common ground with the union. However, the company said that no compromise has been made yet on wages, pension plans, and healthcare.

Teamsters march on May Day in Los Angeles on May 1, 2018. David McNew/Getty Images

“Reaching consensus requires time and serious, detailed discussion, but it also requires give-and-take from both sides,“ the company said in a statement earlier this week. ”We’re working around the clock to reach an agreement that strengthens our industry-leading pay and benefits ahead of the current contract’s expiration on August 1. We remain at the table ready to negotiate.”

If no deal is met, the Teamsters website says the union has three options: they can accept the company’s proposals, extend the contract deadline date, or can declare an impasse. An impasse declaration would set up a pathway for a strike, says the National Labor Relations Board.

Previous UPS Strike

Workers and drivers for UPS went on strike 25 years ago, while reports at the time indicated that UPS volume only went down by about 2 percent. There were also a backlog of about 90 million packages when the strike ended.

At the time, it appears that Americans were largely unfazed by the 1997 strike. About 55 percent of respondents to a Gallup poll supported the strike, and 27 percent didn’t.

Americans were seemingly not bothered by the slowdown in package delivery during the 1997 strike, as 55 percent supported it while 27 percent did not, according to a Gallup poll performed at the time.

However, the strike of some 185,000 workers “largely crippled the world’s largest package delivery company” in 1997, according to a New York Times article from August of that year.

Disruption

Customers could see slower delivery of items to their residences, higher prices on shipping, higher prices in general, and it would result in yet another supply chain crunch, according to The Associated Press.

Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, told The Hill this week that a Teamsters strike could cause widespread disruptions. He noted that during the COVID-19 pandemic, due to worker shortages and lockdowns, there were rampant supply chain issues.

“You’d have supply chain disruption like we witnessed during the pandemic potentially, where you won’t be getting your deliveries,” Gold told the outlet. “So, those who are relying on next day, two-day delivery of whatever you buy online or somewhere else, potentially cannot be delivered.”

Other firms like FedEx and Amazon might not be able to take up the slack of a UPS Teamsters strike, he added, as the “capacity for other carriers to pick up where UPS isn’t able to do that is not that easy.”

“It’s not as if you can just quickly turn to another company. The question is what capacity is available to make that shift,” Gold said. “And it’s unclear if there’s capacity elsewhere to make up for that.”