UPS Freight and Teamsters come to terms on new labor deal

A new labor agreement between UPS Freight, the less-than-truckload unit of UPS, and the Teamsters Union was reached over the weekend, with UPS Freight Teamsters members approving a new contract over the weekend.

This new five-year contract covers roughly 11,600 UPS Freight Teamsters members. According to the International Brotherhood of Teamsters (IBT), 77%, or 6,935 UPS Freight Teamsters members voted in favor or the deal, and 84%, or 2,067 members, opposed, with 84% of eligible members voting. 

“We are pleased that the UPS Freight agreement has been ratified,” UPS officials said. “It is an agreement that rewards our employees for their contributions to the success of the company, while enabling UPS to remain competitive.  We will resume normal operations and will immediately begin accepting new volume from UPS Freight customers. Our teams began contacting customers after ratification.  We thank our customers for their patience and loyalty.”

The company added that the UPS Small Package National Master Agreement (NMA) and UPS Freight Master Agreement have been ratified, adding that customers can remain confident UPS is ready to continue to serve its small package and UPS Freight customers throughout the holiday season and beyond.

Prior to this deal being reached, prospects for a new deal appeared somewhat bleak, with a proposed tentative agreement, in the form of a Last, Best and Final  (LBFO) contract proposal from UPS Freight rejected by the Teamsters on October 25, followed by UPS Freight Teamsters members prepared to go on strike, which would have begun today, Monday, November 12.

As previously reported by LM, the Teamsters UPS Freight National Negotiating Committee met on October 22 and compiled a list of issues that it said have been presented to UPS, with the negotiating committee insisting on: tighter restrictions and limits on subcontracting and rail usage; higher wage increases that are not split; earning protection for city drivers when they perform dock work; elimination of the new qualifiers for pension and vacation benefits; and a week’s worth of vacation pay for all classifications based on 1/52 of the prior year’s earnings.

What’s more, it appeared both sides were on a collision course in the form of a labor strike based on a UPS Freight letter to customers obtained by LM in which it said UPS said that it believes the new contract proposal should be ratified and “is an offer that rewards its employees with wages and benefits at the top of the industry and compensates them for their contributions to the success of the company.”

The letter added that the UPS Freight Teamsters employees would have a union-hall vote, with ballots to be casted between November 7-11, adding that UPS did not have an extension in place to the current UPS Freight contract.

And due to this situation, in an effort to ensure transparency and not put customer volume at risk, UPS said that effective November 1, UPS would not pick up any UPS Freight volume with a delivery date after November 8, which ended up being the case prior to the vote over the weekend.

Had a strike come to fruition, the risks would have been fairly straightforward, according to Stifel Nicolaus analyst David Ross, as a strike would cost money and lose business, while no strike may still cost some business, as the company us reducing the number of pick-ups each days for the next week and a half.

Teamsters for a Democratic Union (TDU), a grassroots organization of thousands of members across North America, blasted the new UPS Freight deal, saying it is weak and that IBT President James Hoffa threw away the union’s bargaining leverage and left members defenseless against company threats.

“UPS Freight Teamsters are stuck with another five-year deal that will allow for more subcontracting and create a multi-tiered wage structure,” TDU wrote. “The responsibility for this debacle lies squarely with the Hoffa administration. On the first contract ballot, UPS Freight Teamsters Voted No by 62 percent despite a joint Vote Yes campaign by UPS and the Hoffa administration. The overwhelming No vote gave our union bargaining leverage--especially combined with the No Vote at UPS right before peak season. But instead of using the leverage provided by the members to win better contract offers, the Hoffa administration doubled down on imposing the bad contracts.”