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More than 90% of Teamsters workers employed by UPS voted earlier this week to go on strike if a new collective bargaining agreement isn't reached before the current one expires on August 1, according to CNN Money. The Teamsters is one of the largest unions in the US, representing 1.3 million mostly manual laborers, including a majority of UPS' employees. The two parties, which have been in negotiations since late January, haven't made any significant progress over the last few weeks, making a strike increasingly likely.
The disagreement is primarily over the shipping giant's desire for employees to work every day of the week. UPS started regularly delivering parcels on Saturdays about a year ago, but hasn't started making Sunday deliveries, largely because of the costly overtime wages it's required to pay drivers.
UPS is seeking to change this in negotiations, proposing a two-tiered wage structure that would make part-time employees full-time workers at their current wage of $15 an hour, and cap their hours so they only work either Sunday to Thursday or Tuesday to Saturday. The Teamsters' members are currently divided on the proposal. UPS Teamsters United, a subset of the union, is arguing that UPS should pay any new full-time workers the same as it pays its existing workers, $36 an hour, on average, with the opportunity for overtime.
A strike would be a huge blow to the shipping giant at a time when it faces new competitive pressure from DHL and the looming threat of Amazon. DHLrevealed earlier this year that it planned to re-enter the US business-to-consumer (B2C) last-mile delivery market nearly a decade after its initial exit.
It may take the Germany-based company years to stand on the same competitive footing as UPS and FedEx, which combined operate more than 1,000 planes, 200,000 vehicles, and 4,000 warehousing and sorting facilities; however, it still poses a large threat to UPS since it can leverage its business-to-business (B2B) parcel delivery operations in the US.
Meanwhile, Amazon has startedpiloting a new service in Los Angeles that delivers packages for third-party retailers, showing it has ambitions to take on established US logistics providers. A massive strike like this — the Teamsters represent a whopping 260,000 UPS employees, roughly 60% of the company's total workforce — would, at least temporarily, be yet another major hurdle for the company.
Disputes like this one will grow more frequent and serious, as logistics providers increasingly tap into digital technologies to automate routine, low-skill jobs.As part of its initial proposal to UPS, the Teamstersdemanded that the shipping giant not use self-driving cars or drones for last-mile parcel deliveries. While that proposal was quickly shot down, it provides an early glimpse at the resistance logistics companies will face as they look to develop automated delivery capabilities.