This week in parcel, UPS and Teamsters begin national negotiations, while UPS announces a new pricing model to retain customers (that might not be beneficial for the customer). Additionally, more signs point to the reduction of free home deliveries.
UPS to launch dynamic pricing pitch for shippers
In an effort to attract more customers, UPS is set to introduce “dynamic pricing” once its negotiations with the Teamsters union are complete.
UPS believes the new model will make a difference in winning over shippers, especially those who are shifting to other carriers amid uncertainty about the likelihood of a work stoppage during the Teamsters-UPS negotiations.
The benefit of dynamic pricing for carriers is obvious: they can adjust pricing whenever capacity depends on it. The benefit for the customer is not as clear.
It is important to note that both FedEx and UPS have already used types of dynamic pricing, mainly in fuel surcharges and peak season surcharges. For UPS, its model is simply expanding.
Learn more here.
UPS and Teamsters national negotiations underway
Although UPS and the Teamsters union still have two regional supplemental discussions to finalize, they have moved on to national negotiations.
The two parties met for the first time Monday, May 8. Among other issues brought up on that first day, Teamsters proposed UPS eliminate the 22.4 two-tier job classification. This classification is for full-time workers, but Teamsters says it doesn’t provide employees with the same status as other workers, despite that they put in the same work.
On the Friday prior to commencing negotiations on the national agreement, UPS said the two parties had made good progress in regard to the supplementals.
To learn more about the negotiations, click here.
Amazon, among others, tightens free shipping options
Amazon is trying to move its customers away from free home deliveries. The retailer is now offering select Prime customers $10 to pick up their purchase from an access point instead of having it delivered it to their homes.
In another effort to increase pickup point usage, the company has also begun charging $1 if customers return a package through UPS as opposed to an Amazon pickup or return location (more on that here.)
UPS and FedEx have also begun encouraging customers to use access points for shipments in place of home deliveries, especially in rural areas. These efforts could increase margins for the shippers while also offering customers additional security from porch theft.
More here.