As has been reported, after months of negotiations UPS and the International Brotherhood of Teamsters (IBT) reached a new labor contract. All the specifics, however, have not been fully resolved or revealed. In a recent Teamsters’ conference call, the union revealed some of the details of the new agreement that replaces the one expiring July 31.
There has understandably been much speculation about the agreement. The main pressure on UPS is to manage labor costs and a changing last-mile delivery marketplace, all while keeping employees happy in an exceptionally tight labor market.
The contract covers a large number of employees, around 250,000, which includes drivers, loaders, sorters, and operation team members.
One interesting detail of the agreement is the creation of a hybrid driver, who will work both weekdays and weekends. The pay for this position would cap at $34.79 per hour after five years, which equates to $72,000 per year. The creation of this position eliminates the union’s concern about overtime if UPS decides to add Sunday delivery to its current 6-day-a-week delivery schedule. Although UPS has no immediate plans for 7-day delivery, its main competitors such as FedEx and Amazon deliver every day. UPS is leaving the door open to be able to deliver on Sundays during this contract’s term.
Denis Taylor, the director of the Teamsters Package Division states: ‘…given the circumstances in the delivery situation, obviously, the competition is delivering on Sunday, we firmly believe that at some point during the term of this agreement that Sunday delivery would be a distinct possibility for our members.” When the company does instate Sunday delivery, most of the work would be completed by these combination drivers so no other contract changes will be needed. Drivers that work Tuesday-Saturday would be transitioned to a Monday-Friday shift and weekends would be covered by the hybrid drivers.
UPS Drivers Get a Raise
UPS will create at least 2,000 sleeper-team driving crews by moving freight transported by railroads to trucks. This will double the number of sleeper-teams, but in comparison to the rest of the UPS driver team, it is still quite small. If the contract is ratified, a sleeper team job with a single classification (pulling one trailer) will be paid $0.84 per mile. By 2022, driving jobs will be the highest paid, up to $0.96 for trucks pulling a triple trailer. And these rates are not just for sleeper drivers—all mileage drivers will receive these rates.
In addition, the new contract will increase standard drivers’ hourly rate by $4.15 over the term of the agreement. IBT said that full-time drivers now earn an average of $75,000 per year, or $36 an hour. If this UPS labor contract is ratified by the members, the pay raises will be retroactive to August 1st.
The use of technology to make deliveries was another topic of debate during the negotiations. Per the new agreement, UPS must consult the union about any technological changes six months in advance. Technologies such as drones, autonomous vehicles, and platooning of tractor-trailers included. This gives the union the ability to go through a grievance process if changes are brought about too quickly.
The changes in the latest agreement indicate that UPS is working to remain competitive in a changing marketplace – one that demands a progressive approach to technology and an ecommerce-centric mindset – while still addressing the concerns of the Teamsters.