3 Min Read
(Reuters) -UPS and its Teamsters union have agreed on a tentative contract deal for about 340,000 U.S. workers at the parcel delivery firm, one week ahead of a threatened strike that could have cost the economy billions and disrupted a quarter of U.S. package shipments.
Tuesday’s announced deal, which must be ratified by union members, cinches another win for labor unions, especially in the transportation and industrial sectors that have seen their hand strengthened in recent negotiations amid worker shortages and higher demand.
The planned strike by workers UPS, which handles about 20 million packages a day in the United States, could have also driven customers into the arms of rivals like FedEx, which is still embroiled in talks with its pilots union.
“This contract sets a new standard in the labor movement and raises the bar for all workers,” International Brotherhood of Teamsters General President Sean O’Brien said.
“We demanded the best contract in the history of UPS, and we got it,” O’Brien said, adding that UPS put $30 billion in new money on the table without a single concession from the union. “We’ve changed the game.”
UPS declined to comment on O’Brien’s estimate for what the new contract would cost the company and said it would update guidance during our second-quarter earnings call on Aug. 8.
Shares in UPS were down 2.2% to $184.19 after initially rallying 1.6% following news of the deal.
“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”, UPS CEO Carol Tomé said.
The Teamsters said the contract includes historic wage increases that give existing full- and part-time UPS workers $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract. It will also raise pay for existing part-timers to at least $21 per hour immediately.
A 10-day strike at UPS could have cost the U.S. economy more than $7 billion, according to a recent estimate from a think tank specializing in the economic impact of labor actions.
That figure from Anderson Economic Group included UPS customer losses of $4 billion and lost direct wages of more than $1 billion.
Unions for U.S. airline pilots have also notched recent bargaining victories. They’ve been joined by workers at railroads and West Coast sea ports who kept the U.S. economy working in the early days of the pandemic while putting their own health at risk.
Reporting by Lisa Baertein in Los Angeles and Priyamvada C in Bengaluru; Editing by Shailesh Kuber and Susan Heavey
