Teamsters in heated talks with UPS over new contract

The Teamsters union, never without internal squabbles and internecine power players, is showing some internal rift in its opening weeks of negotiations with UPS, the union’s largest employer.

With job preservation and security top of mind for the union, the Teamsters last month submitted an 83-page opening demand in its National Master contract that covers about 260,000 UPS employees. The five-year contract expires July 31.

While both sides are publicly mum about what they want from the new deal, some early leakage has occurred regarding Teamsters demands:

• Creation of 10,000 new full-time jobs;
• Elimination of late-night deliveries;
• Greater job security; and
• Raises from part of the expected $10 billion in profit UPS is expected to make this year, and in the foreseeable future

 A UPS spokesman would not expand on what the company wants other than to say it wishes to “remain a highly competitive provider of reliable service” in the fast-growing, e-commerce fueled, small-package market that it shares with FedEx and the U.S. Postal Service.

In a statement, UPS emphasized it is seeking “flexibility” to remain competitive in the rapidly changed e-commerce and small package landscape. That market now includes giant Amazon, which not only is non-union but is now operating a small fleet of its own vehicles.

“UPS will negotiate in an environment of mutual respect and looks forward to rewarding employees for their contribution to our success,” UPS. “We are focused on a contract that provides the flexibility needed to remain a highly competitive provider of reliable service, given the challenge of an increasingly crowded logistics segment. We look forward to working together with union negotiators on our shared obligation to position UPS for success in the future.”

One of the union’s initial demands was firm language against use of drones for deliveries. But somewhat mysteriously, according to the Teamsters United website, the union’s Package Division watered down that contract proposal to prevent job elimination due to technology.

Teamsters United was formed prior to the union's 2016 general election largely out of dissatisfaction with the mainstream Teamster leadership.

The International Union, led by IBT President James P. “Jim” Hoffa, had put forward strong language to strengthen Article 6 regarding technological changes. That had included a ban on UPS using drones or driverless vehicles.

But Denis Taylor, who heads the union’s small package division, pulled that proposal to ban UPS drones or driverless vehicles. Taylor also withdrew a contract proposal that would prohibit management from disciplining employees, solely based on technology.

The union is still seeking to prevent UPS from firing or suspending employees based solely on technology. It adds new language that makes it clear that “failure to follow proper procedures” does not constitute dishonesty for the purposes of discipline.

The union and UPS are negotiating over the future of Surepost, a partnership with the U.S. Postal Service that the union fears would cause job losses. The Teamsters want to eliminate Surepost and require that work to be performed by Teamsters. UPS wants to expand that partnership.

UPS also is pushing language that would require all new employees to use their personal vehicles to deliver packages. The Package Division has objected to any use of Personal Vehicle Drivers (PVDs).

The company also wants flexibility to allow management to designate up to 20 percent of the routes in each center as a residential route. Drivers on residential routes would be paid at a lower rate than regular parcel delivery personnel.

UPS also wants to implement Sunday delivery work with the option of using part-time drivers to deliver ground and be required to use their own vehicles.

“The company’s outrageous and insulting demands show they are not getting the message. Members are not taking givebacks again.” said Fred Zuckerman, the leader of Teamsters United who represents more than 10,000 UPS Teamsters in Louisville Local 89.

Both sides are dealing from strengths. UPS is the most recognizable brand in freight transit and wildly profitable. Last year, UPS earned more than $8.7 billion operating profit and $4.9 billion net income on $65.8 billion in revenue as the world’s largest and most profitable transport company. And that was before any expected $1 billion savings due to the new Trump-induced tax bill.

UPS made $1.5 billion more in 2017 than the year before. Big Brown is predicting profits of up to $6.5 billion this year.  UPS Freight added another $3 billion in revenue, a 10% improvement.

The Teamsters want a piece of that pie. UPS drivers earn about $30 an hour before overtime with an average wage of about $74,000 in the best-paying jobs in freight transport.  

UPS wants a lower rate of pay for package drivers on residential routes, part-time package drivers for weekend deliveries, increased subcontracting, a reduction in guaranteed weekly hours for part-timers and many other concessions.

Zuckerman leads Local 89, one of the largest UPS locals in the country. He recently hinted at some of the union’s goals in a recent speech Zuckerman gave in a Conference Call of 1,500 Teamsters United volunteers at UPS.

“There are a lot of pissed off Teamsters out there—I’m one of them,” Zuckerman said. “But a lot of them wonder if they can make a difference. They say, (Teamsters union President Jim) Hoffa rammed a bad contract down our throats last time—and he’ll do it again.”

Zuckerman said UPS is “going to be looking over the shoulder” of the National Negotiating Committee to see what it will take to pass the contract.

“They’re going to be watching the members to see which way the wind’s blowing,” he added. “We need to show them a storm is coming if they don’t give us a fair contract.”

The union’s precise financial demands will come later in the talks. But already the union is asking for a 10-hour limit on workdays, with time and a-half paid for Saturdays and double-time for Sundays.

While it is not known precisely what UPS will bend on, the last two contracts have resulted in cost of living adjustments in the 3 percent range with company promises to add more full-time workers. Part-time UPSers start at a much lower hourly rate, about $11 an hour.

According to the dissident Teamsters for a Democratic Union (TDU), more than 70% of UPS and UPS Freight Teamsters voted against Hoffa in the last union election. Zuckerman said UPS knows Hoffa doesn’t have the credibility to push through a weak contract, and that gives the Teamsters leverage.

“The national UPS contract would have been voted last down last time if it had not been for the big Yes vote in the South and New England,” Zuckerman said. “Today, those are two of the regions with the most pissed off members.”

In separate negotiations, the Teamsters are also negotiating a National Master Freight Agreement with UPS Freight, the former Overnite Transportation Co. that operates in the LTL sector. That freight carrier, the fifth-largest in the country with about $2.6 billion in annual revenue, is not nearly as profitable as the small package division of UPS.