This week in parcel, shippers should keep a close eye on how the upcoming FedEx negotiations will shake out. Teamsters General President has made it clear to UPS that a union is willing to strike and has the security to do so. Additionally, FedEx is consolidating to cut costs, and diesel prices continue to decline (but probably not for long).
Teamsters President Warns UPS of Impending Strike
As UPS and Teamsters’ current contract creeps closer to expiration, Teamsters’ General President, Sean O’Brien, recently stated the union is not afraid to strike if necessary.
O’Brien called the UPS a “white collar crime syndicate” while speaking to a Teamsters Rally in Charlestown, MA.
A potential strike between the union and UPS has been on the radar for months, but it’s clear as negotiation draws near that there is a large gap between what the Teamsters union wants and what UPS is willing to offer.
Teamsters stated it has $300 million in its strike fund and is willing to use all of it to ensure UPS employees get what they need.
The current contract expires on July 31, and negotiations are set to begin on April 17.
You can read more on O’Brien’s comments, as well as more on the strike here.
FedEx Combing Delivery Units in Cost-cutting Efforts
In a further effort to cut costs, FedEx announced its separate delivery services will be consolidated into a single entity. This move integrates FedEx Ground with FedEx Express overnight air delivery.
With e-commerce flattening out, has led CFO, Raj Subramaniam to streamline operations, having faced much pressure to do so.
The new business model will handle all deliveries starting in June 2024 and is just one of the efforts to cut $4 billion in costs by the end of 2025.
FedEx Ground and FedEx Express has operated as separate entities for nearly two decades.
Find out more about FedEx cost cutting here.
Price of Diesel Declines for Week of April 3
The national average price of diesel per gallon fell by 2.3 cents. This follows a 5.7-cent decrease in the preview week and is the ninth straight week of declining costs. The week of January 30 was the last week the price of diesel increased when the national average sat at $4.622 per gallon.
Since November 14, the average price has dropped a cumulative 79.7 cents. Compared to this time last year has dropped over a dollar ($1.039).
This continued decline might not be long-lived, however as oil production might be halted to increase profits.