This week in parcel, the US Postal Service introduces a new Ground service. Can it compete with UPS and FedEx?
Meanwhile, the Teamsters Union has had a tumultuous week. While its local unions voted on the UPS agreement, 22,000 Teamsters jobs are in jeopardy as Yellow’s 99-year run comes to an end.
Can the new USPS Ground service compete with UPS and FedEx?
The US Postal Service recently launched a new service called Ground Advantage, which is an ensemble of three existing USPS services. The new service looks to compete with Ground services from UPS and FedEx, but is it something shippers should consider?
It may depend on your package’s weight and dimensions.
USPS Ground Advantage factors in weight much more than UPS or FedEx Ground. The USPS’s new service is less expensive when shipping up to about 20 lbs. per shipment. However, when the weight exceeds 20 lbs., USPS Ground Advantage becomes significantly more expensive. Additionally, USPS Ground Advantage has a lower threshold for maximum length before surcharges begin.
Our take: Depending on your package’s dimension and weight, utilizing USPS’s new service could be a great cost-saving alternative. However, you’ll need to determine if it works for your business. Otherwise, it becomes far more costly.
Read more here.
Teamsters locals’ approval of UPS tentative agreement nearly unanimous
The Teamsters local unions overwhelmingly endorsed the tentative agreement with UPS by a vote of 161-1. Fourteen affiliates did not attend the meeting in Washington, D.C.
Rank-and-file employees now have the chance to vote on ratification, which started August 2 and will run through August 22.
The agreement is the most lucrative Teamsters contract at UPS to date, according to Teamsters. The deal, which the union states is worth $30 billion, includes additional safety measures and wage increases for all workers. Union workers will also now receive Martin Luther King Day as a paid holiday and will no longer have forced overtime on days off.
Our take: With the issue nearly resolved, it should serve as a lesson to companies that over-reliance on a single transportation partner comes with risks.
Read more here.
Yellow is shutting down
Yellow, the less-than-truckload freight company, is shutting down, according to the Teamsters Union and media reports. The company ceased operations on July 30, two days after laying off hundreds of non-union employees and informing Teamsters employees not to come to work.
Yellow is expected to file for bankruptcy in the coming days but has not formally done so yet. Roughly 30,000 jobs are at risk with the company’s closure, with 22,000 of those employees represented by Teamsters.
Yellow was handling between 10,000 and 15,000 shipments a day, down from 49,000 in 2022. Its bankruptcy will likely be the end of the 99-year-old company.
Our take: Much like the near-miss with the UPS strike, Yellow’s closure shows that carrier diversity is always important for all companies’ supply chains.
Read more here.