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News July 25, 2023

Promo Leaders React to Tentative Contract Deal for Unionized UPS Workers

Barring something unforeseen, the agreement prevents a strike that would have started Aug. 1 and potentially had significant negative impacts on the branded merchandise market and U.S. economy. While approved by union leadership, rank-and-file members still need to ratify the new agreement.

By  Christopher Ruvo

When Jeremy Lott saw that the Teamsters union and United Parcel Service (UPS) had reached a tentative agreement on a contract for unionized UPS workers on Tuesday, the CEO of the largest supplier in the promotional products industry didn’t hide his elation.

“We are thrilled to hear that UPS and the Teamsters have reached a tentative deal,” said Lott, who leads Top 40 firm SanMar (asi/84863). “UPS is a key partner to SanMar and important to the entire U.S. economy.”

ups truck

Lott ranks number one on Counselor’s Power 50 list of promo’s most influential people, and in speaking about the UPS deal, he was most certainly expressing the sentiments of the vast majority of industry professionals.

Barring an unexpected turn, the tentative deal will prevent approximately 340,000 UPS workers – drivers and logistics employees – from taking to the picket lines on Aug. 1 for a strike that, by one estimate, would have cost the United States economy $7 billion if it lasted just 10 days.

The strike, which was set to begin the day after the UPS workers’ current contract expired, was poised to have negative impacts on promo – from potential delivery disruptions and delays, to higher costs for those shipments. Industry firms were already making contingency plans.

UPS is the largest package delivery company in the world and moves about 5% of the nation’s gross domestic product – approximately $3.8 billion worth of goods every day, according to figures from the U.S. Chamber of Commerce.

“The tentative deal is great news – a big relief,” Jeffrey Nanus, CEO/president of New Jersey-based supplier AAA Innovations (asi/30023), told ASI Media. “While we had contingencies planned, I believe that the other carriers would soon be overwhelmed.”

Jeremy Lott“We are thrilled to hear that UPS and the Teamsters have reached a tentative deal. UPS is a key partner to SanMar and important to the entire U.S. economy.”Jeremy Lott, SanMar

Harry Ein primarily uses UPS rival FedEx to ship, but the prospect of a UPS strike did have him leery. He, like other promo distributors, was concerned that there would be an influx of pressure on FedEx’s system from UPS customers, potentially leading to ills.

“If a strike occurred and prolonged for weeks or months, there’d probably be a trickle-down effect with delays and costs just going up,” said Ein, owner of California-based Perfection Promo, an affiliate of Top 40 distributor iPROMOTEu (asi/232119). ““It’s fantastic that there’s a tentative deal and it looks like there’ll be no strike.”

Union leadership heralded the deal as a win.

“We demanded the best contract in the history of UPS, and we got it,” said Teamsters General President Sean M. O’Brien. “This contract sets a new standard in the labor movement and raises the bar for all workers.”

UPS was satisfied with the terms of the new contract.

“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,” said UPS Chief Executive Carol Tomé. “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.”

Not a Done Deal – Yet

That said, the new agreement isn’t yet set in stone, as it still needs to be approved by rank-and-file UPS union members.

According to the Teamsters, representatives of the 176 UPS Teamster locals in the U.S. and Puerto Rico will meet to review and recommend the tentative agreement on July 31. The local union offices will conduct member meetings and Teamsters will have several weeks to vote on the offer electronically. Member voting begins August 3 and concludes August 22.

The UPS Teamsters National Negotiating Committee has already unanimously endorsed the five-year tentative agreement, describing it as an “overwhelmingly lucrative contract (that) raises wages for all workers, creates more full-time jobs, and includes dozens of workplace protections and improvements.”

While agreements in many initial areas of contention had already been reached, a remaining sticking point prior to today was what the union felt was inadequate pay for part-timers. That issue was cleared up after talks resumed July 25 following several weeks of no negotiations. Existing part-time workers will make a minimum of $21 an hour under the new contract.

The UPS-Teamsters contract is the largest collective-bargaining agreement involving a private employer in North America. The Teamsters said that under the contract workers will get:

  • Historic wage increases. Existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract. New part-time hires at UPS would start at $21 per hour and advance to $23 per hour.
  • Wage increases for full-timers will keep UPS Teamsters the highest paid delivery drivers in the nation, improving their average top rate to $49 per hour.
  • Enhanced safety and health protections, including vehicle air conditioning and cargo ventilation. UPS will equip in-cab air conditioning in all larger delivery vehicles, sprinter vans, and package cars purchased after Jan. 1, 2024. All cars get two fans and air induction vents in the cargo compartments.
  • The creation of 7,500 new full-time Teamster jobs at UPS and the fulfillment of 22,500 open positions, establishing more opportunities through the life of the agreement for part-timers to transition to full-time work.
  • All UPS Teamsters would receive Martin Luther King Day as a full holiday for the first time.

Disputes over new contracts for unionized workers whose labor is essential to supply chains have been a consistent threat to the promotional products industry over the last couple years. In addition to the UPS situation, there were fiasco-filled negotiations involving West Coast port workers, as well as another fight involving railroad workers. Those talks concluded without strikes, though rank-and-file port workers still need to ratify their deal. FedEx pilots have just rejected a tentative labor agreement that would have given them a 30% pay raise, but a strike is not imminent.