United Parcel Service (UPS) and the International Brotherhood of Teamsters have reached a new, temporary, five-year collective bargaining agreement covering approximately 330,000 delivery and warehouse workers.
The agreement, if finalized, would avert the largest single strike against a corporation in U.S. history and The US economy was damaged by about $7 billion.
The union’s current contract with the delivery giant expires on August 1, and the Teamsters have threatened that the drivers will quit their jobs without an agreement. Talks between the two sides resumed today after being interrupted earlier in the month.
In a statement, Teamsters said UPS is spending $30 billion on the new agreement that raises wages for all UPS workers, creates more full-time jobs, and adds “dozens” of workplace protections and improvements. According to Teamsters General President Sean M. O’Brien, the union made no concessions to reach the agreement.
“This contract sets a new benchmark in the labor movement and raises the bar for all workers,” O’Brien said. The deal covers 340,000 workers according to UPS and 330,000, according to Teamsters.
Under the new contract, current full- and part-time UPS Teamsters will earn an additional $2.75 per hour in 2023, and an additional $7.50 per hour over the term of the contract. Existing part-time workers will earn a minimum of $21 an hour, immediately, and new part-time hires will start at $21 an hour.
Under the current contract, regular, full-time workers earn an average wage of $42 an hour. Part-time workers under the same agreement were promised a minimum of $16.20 an hour, with the average part-time wage after 30 days on the job totaling $20 an hour.
A UPS spokesperson described the agreement as “win, win, win” in an email to Yahoo Finance. The company added that it will update its guidance on the agreement, including expected cost, during its second-quarter earnings announcement on August 2.
“This agreement continues to reward full- and part-time UPS employees with industry-leading wages and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” said UPS CEO Carol Twomey.
The big point of contention between the two sides before today was the agreement on pay rates for part-time union workers at UPS.
These workers make up more than half of the company’s workforce. This group already receives the same Medicare and pension benefits as full-time workers.
threatened a strike The heart of the American supply chainadd to it inflationary pressuresLoyal UPS customers may pay to competitors Such as FedEx (FDX), Amazon (AMZN), and the US Postal Service.
UPS currently handles 22 million domestic packages per day. It was responsible for delivering 24.5% of all US packages in 2022, according to Pitney Bowes. Only the Postal Service has dealt more.
The company said about daily deliveries It accounts for approximately 5-6% of the US GDP (gross domestic product). Teamsters president Sean O’Brien said at a rally Saturday that deliveries account for 7% of GDP.
The last UPS strike was in 1997, when about 185,000 workers walked out. At the time, UPS handled fewer packages per day but was responsible for more total traffic in the industry.
This downtime lasted 15 days and cost UPS hundreds of millions of dollars. The company finally made it Privileges in wages, pensions and part-time workers.
Before today, the two sides had been able to settle a number of other issues, including ending forced overtime on unscheduled days, air conditioning for new delivery cars, disabling inward-facing delivery car cameras, more full-time jobs, and more seasonal part-time hours.
The union and UPS also agreed to eliminate the pay class for a mixed group of full-time workers who sort and load packages into the company’s warehouses, as well as drive and deliver packages.
This group was formed under a mutual agreement between UPS and the union to fulfill Saturday delivery requests.
Those workers who work Tuesday through Saturday and earn $36.54 an hour plus benefits will convert to full-time regular workers, though their wage rate has not been disclosed by the parties.
Alexis Keenan is Legal Correspondent for Yahoo Finance. Follow Alexis on Twitter @employee.
Find live stock market quotes and the latest financial and business news
