UPS, Teamsters avoid strike, but freight industry roiled by Yellow bankruptcy

The Teamsters labor union and United Parcel Service (UPS) announced on 25 July a tentative agreement that ends a threat that 340,000 UPS Teamsters employees might go on strike.

Negotiations on a replacement for the previous UPS-Teamsters contract, which expired at the end of July, took place throughout the month. The new contract will apply to employees across the U.S. and Puerto Rico and commits more than USD 30 billion (EUR 27 billion) in funding to workers, as well as including better benefits for employees, increased full-time position opportunities, and workplace protections, over the next five years.

The agreement was endorsed by the UPS Teamasters Negotiating Committee, on 31 July, with 176 UPS Teamster representatives recommending the amendments, the group said in a release. 

“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,” UPS CEO Carol Tomé said in a release. “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.”

Current UPS employees will receive at least USD 21.00 (EUR 19.00) an hour under the new contract, CNBC reported.

“UPS came dangerously close to putting itself on strike, but we kept firm on our demands," Teamsters General Secretary-Treasurer Fred Zuckerman said. "I have never seen a national contract that levels the playing field for workers so dramatically as this one. The agreement puts more money in our members’ pockets and establishes a full range of new protections for them on the job."

Teamster and UPS representatives will vote between 3 and 22 August on whether to support the agreement, which would be largest private-sector agreement in North America. 

“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits," Teamsters General President Sean M. O’Brien said in a release. “UPS has put USD 30 billion in new money on the table as a direct result of these negotiations. We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers.”

Despite the agreement, the U.S. logistics sector was still roiled this week by the 1 August announcement that Yellow Corp., one of the largest trucking companies in the country, is filing for bankruptcy and halting operations. The freight-delivery company has 30,000 employees and recorded USD 5 billion (EUR 4.6 billion) in revenue in 2022, having made more than 17.5 million shipments nationwide in the year, according to USA Today.

“The likelihood of them surviving and remaining solvent diminishes really by the day,” Bruce Chan, a research director at investment banking firm Stifel, told the Associated Press.

Yellow's bankruptcy comes on the heels of a general downturn in the profitability of the U.S. trucking sector. Shipping rates have tumbled since the peak of market demand during the Covid-19 pandemic, and lower spot rates for deliveries are making it unprofitable for U.S. truck drivers to make a living.

"The good times have come and gone,” Owner-Operator Independent Drivers Association President Todd Spencer told NBC News. “There’s a shakeout in the works right now, and it’s more than likely going to continue throughout this year.” 

Photo courtesy of UPS