This week in parcel, UPS and Teamsters stay mum on their negotiations. Is this a bad sign or an indication the two sides are working hard to prevent a strike?
Meanwhile, the Logistics Managers’ Index declined for the third straight month and reached record lows. Which sectors is inventory struggling, and which sectors is it not?
Negotiations slow between Teamsters, UPS
It’s been almost two weeks since the last update between UPS and the Teamsters Union, but no news is likely good news.
The two sides announced progress on May 26, with agreements on operating priorities and technology usage. A few weeks earlier, there was a tentative agreement on keeping more SurePost packages in the UPS ecosystem.
Afterward, the two paused contract negotiations so they could complete the final two regional supplemental contracts.
The negotiations were set to resume on June 5, but there have been no updates since then. While the lack of updates might concern shippers, there’s still, plenty of time to reach a deal. The current contract expires at the end of July.
Follow along on NextSights for weekly updates on the negotiations.
Logistics Managers’ Index drops for third straight month, reaches record low
The Logistics Managers’ Index has reached a record low in its six-and-a-half-year history. The state of the freight market is the biggest factor contributing to its decline, with shippers using less space than ever. Transportation prices also declined at their sharpest rate since the inception of the index. The available capacity has lowered utilization and prices.
Manufacturer and wholesaler inventories are at their lowest since February 2020, although downstream retail inventories are still growing. Big-ticket items are where consumers have cut back the most, with items like high-end electronics and furniture inventory being much lower than in the last few years.
As long-term deals signed during 2020 and 2021 expire, warehouse pricing will continue to decline alongside diminishing capacity. Read more about the Logistics Managers’ Index and a deeper dive into the decline here.