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This week in parcel, UPS and Teamsters made baby steps towards a contract agreement, resolving a long-standing issue with air conditioning in trucks.

UPS isn’t the only carrier working on labor negotiations. FedEx and its pilots are nearing the end of a two-year-long negotiation.

Amid contract talks, both carriers have made significant improvements in delivery speed. Will it continue?

Air conditioning UPS, Teamsters

After taking a break to complete the final regional supplemental agreements, UPS and Teamsters returned to the national negotiation table last week. Before the break, the union and carrier agreed to several issues, including keeping more SurePost packages in the UPS ecosystem and providing more opportunities to fill UPS positions with existing Teamsters members.

This week, the sides resolved another issue, with UPS agreeing to add air conditioning to vehicles purchased after January 1, 2024. Existing vehicles will also get fans.

While this agreement is another baby step in the negotiations, it resolves a longstanding issue. The two sides have six weeks to agree on a new contract and avoid a strike.

Learn more here.

FedEx pilots nearing agreement, pay raise

UPS is not the only carrier in negotiations with a union. Back in March, FedEx pilots voiced their frustrations with the carrier being slow in delivering a new contract. The union even noted a strike was not out of the question.

However, in the last two months, the two sides inched closer to an agreement. At the end of May, the bargaining unit for FedEx pilots approved a tentative contract. This agreement includes a 30% pay and pension increase for the pilots.

The union will still have to finalize the agreement, and a three-week ratification vote begins on July 5.

Read more here.

Will delivery speeds continue to increase?

Delivery speeds continue to improve, but it’s not at the demand of consumers. In fact, consumers’ shifting preference away from faster delivery times might stall further improvements in speed.

In April 2022, the average delivery time was 5.6 days. This past April, it was four days. Delivery speeds are at an all-time high.

Capacity is a main driver of the increased pace, as carriers are no longer facing the challenges they did during the early part of the pandemic.

Shippers shouldn’t expect this trend to continue, however. With more consumers opting for cost mitigation, faster shipments become too expensive. Some retailers, such as Amazon, are opting for more regional fulfillment centers to lower shipping times and shipping costs, but this strategy is risky for companies that don’t have the infrastructure to handle the demand.

Learn more here.

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