This week in Parcel, April 26, 2023, labor takes center stage. UPS is fighting to retain its highest-volume customers as its negotiations with the Teamsters union are set to begin. Meanwhile, the union adds Amazon drivers in Southern California, and freight shows signs of a recession.
Labor plays a critical role in the success of supply chain execution. Despite the slowing economy, workers are retaining leverage. Shippers should factor in the state of their partners’ labor relationships within their workforce.
As strike approaches, UPS fights to keep shippers
The Teamsters Union and UPS negotiations were supposed to begin on April 17. However, on April 11, the union stated that it would not begin national negotiations until region-specific supplemental contracts were handled.
The delayed start to negotiations is just another indication of an impending strike. As shippers’ concerns grow, the carrier is attempting to keep them from pivoting to the competition by assigning “high-impact executives” to major companies.
These executives are looking to retain the top one-third of UPS’ total volume, which consists of more than 380 customers.
As many region-specific negotiations either have been finalized or are close to finalization, Teamsters and UPS look on track to begin negotiations on May 1.
To read more about UPS’ efforts to retain shippers and updates on the negotiation, click here
Teamsters add Southern California Amazon delivery drivers to union
Through Battle-Tested Strategies, 84 employees at an Amazon warehouse in Southern California are now voluntarily recognized as members of the Teamsters union.
Battle-Tested Strategies is one of the third-party delivery firms Amazon contracts with to deliver packages. This move also allows members to forgo the months and challenges of a typical union election.
Amazon claimed it had terminated its agreement with Battle-Tested prior to the union announcement, but Johnathon Ervin, Battle-Tested’s owner, disputed this and claimed that Amazon had terminated the contract in retaliation.
The union had been interested in adding Amazon to its team, and even created a division aimed at organizing resources to Amazon employees.
Learn more about Amazon employees’ efforts to unionize here
Freight recession and diesel prices signal slowdown in the U.S. economy
In the last year, wholesale diesel prices in New York Harbor have been cut in half, while benchmark diesel prices have dropped 25%.
Simultaneously, there has been a sharp decline in freight, which is being labeled as a “freight recession,” as the American Trucking Association’s for-hire truck tonnage hits its lowest level in almost two years.
Executives had previously predicted a rebound in the back half of 2023, but now that looks less certain. JB Hunt executives revealed on an earnings call that the company saw a 17% decrease in revenue per truckload.
To read more about how a freight recession could contribute to a broader economic recession, click here.