Why are UPS workers considering a strike? And what about your Amazon packages?

 Why are UPS workers considering a strike?  And what about your Amazon packages?

The clock is ticking fast on what could be the biggest attack in US history.

As negotiations between UPS and its workers break down, a massive picket line looms on the horizon, unionized workers move closer to striking.

And it won’t just be late packages you have to worry about, the strike will cost the economy more than $7 billion.

But why are UPS workers thinking about a strike? How will it affect you? And what will your package be if they are? Read on to know more.

UPS and its union, the Teamsters, hold a rally ahead of the start of the largest U.S. private sector labor contract negotiations covering more than 330,000 U.S. drivers.

On July 22, Sean O’Brien (pictured in blue polo shirt), general president of the Teamsters union, meets with union members at a rally in Atlanta, Georgia, ahead of a possible strike against UPS.

Why are UPS workers considering a strike?

UPS and its union, the Teamsters, are in serious negotiations for the company’s workers.

Unionized UPS workers are demanding higher wages, safer working conditions and more full-time jobs.

Teamsters and the shipping giant were able to reach a middle ground on some of its terms, including:

Installing air conditioning in its vehicles eliminates the two-tier wage system for drivers, meaning full-time drivers will be paid more hourly than part-timers for the Martin Luther King Jr. Day holiday.

But on July 5, talks between Teamsters and UPS broke down after they couldn’t come to an agreement on raising pay for part-time workers — who currently earn $16.20 an hour.

In 2022, UPS returned $8.6 billion to its shareholders and is projected to return another $8.4 billion to them this year.

UPS released a statement detailing how the Teamsters refused to continue negotiations despite the end ‘in sight’.

The delivery company said: ‘Teamsters has closed negotiations despite a historic offer built on our industry-leading wages.’

Teamsters general president, Sean O’Brien, released a statement that said: ‘This multi-billion dollar corporation has a lot to give American workers – they don’t want.

‘UPS had a choice, and they obviously chose to go the wrong way.’

Teamsters and UPS have reached an agreement to improve certain working conditions for workers, but they are still at odds over pay for part-time drivers.

After talks broke down Mr O’Brien said the shipping company ‘had a choice to make and they obviously chose to go in the wrong direction’.

Have UPS workers gone on strike before?

The short answer is yes. UPS workers last went on strike in 1997 and it lasted for 15 days.

After just a fortnight American Delivery Company accepted some union demands.

But, according to The New York Times, the strike still caused major and minor disruptions for the company, including nationwide problems for customers.

But the economy and the world are very different from what they were in 1997, with e-commerce sales 15 times higher than they were that year.

If UPS goes on strike now, will it be bad?

What happens if UPS goes on strike?

Experts don’t think UPS rivals can fill most of the void left by the strikes.

UPS is the largest private shipping company in the United States, followed by the US Postal Service (USPS) as the largest delivery company overall.

UPS shipped 5.2 billion packages in 2022 alone, handling a quarter of US parcels.

In comparison, rival shipping company FedEx handled only 4.1 billion parcels the same year.

While USPS and FedEx will be able to make up some of the shortfall if a strike occurs, experts say these logistics networks are already at capacity, meaning they won’t be able to handle all of the 24.3 million UPS daily deliveries that a UPS strike would leave.

Greg Zegras, president of global e-commerce at shipping tech company Pitney Bowes, told Vox: ‘There’s nothing better for the consumer. There is nothing better for traders than this.

‘And there’s nothing better coming from other players in the industry.’

Shipping rivals FedEx and USPS won’t be able to compensate for 24.3 million UPS deliveries per day if the strike goes ahead

Both USPS and FedEx have issued statements urging UPS customers to choose their service before the strike hits.

FedEx said their main goal was to preserve ‘capacity and service for existing customers’.

‘Therefore, shippers who are considering transferring volume to FedEx, or are currently negotiating with the company to open a new account, are encouraged to start shipping with FedEx now.’

After the USPS announced its USPS Ground Advantage program, delivering coast-to-coast delivery in two to five days, the US Postmaster General, Louis DeJoy, added: ‘We are poised to compete for an increased share of the growing package business.’

But the strike won’t just mean massive delays and increased costs for shipping items across the United States — the economy will also be hit hard.

If the strike goes ahead, it will be the costliest to occur in the last century, with a 10-day strike costing the economy more than $7 billion (US).

Bloomberg estimates that each day of the strike will cost the delivery company $170 million.

But the shipping giant won’t be the only one to suffer, as lost wages are set to total more than a billion, meaning 340,000 workers could be laid off.

UPS-dependent businesses and consumers also stand to lose $4.6 billion, according to a new study by Andersen Economic Group.

How likely is the UPS strike to proceed?

It is unknown whether Teamsters and UPS will return to negotiations, and even before its breakdown Mr O’Brien said a strike was ‘inevitable’.

As the contracts are due to expire on July 31 and new ones are in sight, the strikes may comment as soon as August 1.

Teamsters are conducting practice rallies across the US to prepare – but can the government intervene?

In 2022, Joe Biden became involved in a railroad strike that would affect the US supply chain, meaning workers had to accept terms that were not widely accepted or supported by union members.

However, on 23 July Mr O’Brien asked the US President not to intervene.

The US president has intervened in previous rallies, but Teamsters bosses have asked him not to get involved in the UPS strike

Mr O’Brien spoke with President Joe Biden ahead of improvements to the trucking industry to strengthen supply chains

What about your Amazon packages?

We’ve definitely become more dependent on e-commerce and delivery services since the last time UPS went on strike in 1997.

With Americans’ e-commerce habits now 25% of the pre-COVID-19 world, the delivery sector accounts for 1.1 million jobs — double what it was during the last strike.

This means the strike will cause massive delays and higher prices for parcels across the US.

But that doesn’t mean you’ll have trouble getting the food or clothes you order online, it just means you’ll have a bigger problem when you try to shop in person, as 40% of UPS shipments go to businesses.

Regarding the lingering and potentially protracted supply chain problems, Thomas Goldsby, logistics chairman of the University of Tennessee’s supply chain management department, told The Associated Press: ‘Something’s got to give.

‘A python cannot swallow a crocodile, and we will all feel that.’

Many are particularly worried about their Amazon packages, as the companies used to work together to deliver products.

A 10-day strike could cost the economy $7 billion, with UPS losing $170 million a day

The strikes will only exacerbate the lingering and potentially protracted supply chain problem

However, nowadays the e-commerce juggernaut uses UPS less and less, with only a fraction of its parcels sent by the delivery company.

Therefore, Amazon predicts that if the strike goes ahead, it will weather the UPS strike storm better than smaller retailers.

So if you order an Amazon parcel you may experience a significant delay but it is not a 100% certainty.

Will the strike just cause problems for shipping?

In short – no, these strikes will have ramifications for other unions across the US, with strikes by Hollywood writers and actors as well as other union campaigns at Trader Joe’s, Apple, Starbucks and more, along with new UPS contracts.

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