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This week in parcel, UPS has seen an uptick in job interest since its agreement with Teamsters, but the carrier first has to win back the volume it lost during negotiations.

Meanwhile, at least one former FedEx contractor believes the new UPS agreement could eventually hurt FedEx’s ability to hire drivers.

With negotiations complete, UPS aims to win back volume

UPS averted a potential strike. Now, the carrier is trying to win back the volume it lost during the negotiations with Teamsters.

During the labor negotiations, UPS shippers diverted around 1 million packages a day to FedEx, the U.S. Postal Service, and regional carriers.

UPS has announced an all-hands-on-deck effort to win customers back. The carrier has set up a system to handle returning volume without disruption. It has also worked to persuade customers to return by highlighting different services.

Teamsters hasn’t yet finalized the new labor contract. Union members are voting on the deal this month and are expected to pass it.

Our take: It’s a good time for companies to negotiate because both carriers are battling for package volume right now.

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UPS sees spike in job interest after new deal with Teamsters

After UPS and Teamsters reached a tentative labor agreement worth more than $30 billion, interest in working for the carrier exploded.

At least one online job board saw better than a 50% increase in job searches involving the keywords “UPS” and “United Parcel Service.” Other carriers do not appear to be experiencing a similar increase in job searches.

The new labor agreement increases wages for part-time employees to $21 an hour, and it could earn full-time drivers $170,000 a year by the end of the five-year agreement, including benefits.

Becoming a driver, however, isn’t a matter of just walking in off the street. UPS employees first work as package loaders, and it can take years before they become drivers.

Our take: The ability to be more selective with hiring will hopefully improve work performance and service by UPS over time.

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Former FedEx contractor believes the carrier needs to compete with UPS’s new wages

If Teamsters members ratify the new labor agreement with UPS, which is expected, UPS drivers will make significantly more than most FedEx Ground drivers. This pay gap between the two carriers could be problematic for FedEx, a former contractor believes.

While there is currently no threat of a labor disruption at FedEx, the former contractor believes that UPS’s new labor agreement will make it difficult for FedEx to hire quality drivers. Full-time UPS drivers can make up to $49 an hour, and part-time UPS drivers will earn at least $21 an hour. FedEx Ground drivers, on the other hand, make between $20 and $25 an hour.

FedEx Ground drivers are employed by independent contractors, rather than the carrier itself, in contrast to UPS, where the drivers are company employees.

Our take: Although FedEx Ground delivery drivers are primarily contractors and not employees, as they are at UPS, they still hold some sway. While there is currently no threat of a labor disruption at FedEx, shippers should always diversify their supply chains so as not to be caught out in the event of a service disruption.

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