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This week in parcel, unions take center stage. Teamsters and UPS reached an agreement a week before their current labor negotiations expired. How do the two sides feel about the deal?

Meanwhile, FedEx pilots reject a tentative contract with the carrier. Will FedEx be the carrier that actually sees a service disruption this summer?

Teamsters and UPS avoid a strike, reach tentative labor agreement

On Tuesday, Teamsters and UPS reached a tentative agreement, a week before their current labor agreement expires. This deal averts a strike that would have disrupted the parcel industry, as the Teamsters Union represents roughly 330,000 UPS employees in the U.S.

UPS added $30 billion in new money during the negotiations, according to Sean M. O’Brien, Teamsters General President. Both part-time and full-time Teamsters workers will see significant pay increases as well as improved safety and health precautions. One union member stated that they hit every goal they wanted.

Teamsters will receive Martin Luther King Day as a full holiday and drivers will no longer have forced overtime on their days off.

UPS’s CEO, Carol Tomé, called the new deal a “win-win-win” for the carrier, union, and customers in a statement announcing the tentative agreement. Tomé stated that it rewards UPS’s employees with industry-leading pay and benefits.

The new deal is a five-year agreement and will expire in 2028. Representatives of the 176 UPS Teamster locals will meet on July 31 to review and recommend the agreement. Members will then vote from August 3 until August 22.

Our take: This deal is great for shippers. There’s not enough capacity in the market to absorb the backlogs that would have likely would have occurred during the work stoppage.

UPS, no doubt, is pleased to have avoided a strike. Remember, the time has never been better to renegotiate your rates with UPS or FedEx.

Teamsters is obviously pleased with the agreement as well. Not only did the union manage to avoid a strike, it was able to reach an agreement that was satisfactory to all members.

FedEx pilots reject latest contract from carrier

While UPS and Teamsters’ labor negotiations are winding down, FedEx’s negotiations with its pilots are heating up. On Monday, the pilots rejected a tentative contract deal. The union that represents FedEx pilots, Air Line Pilots Association (ALPA), did not provide reasons for the rejection.

The rejected deal included 30% raises to pay and the pilots’ legacy pensions. FedEx stated that the pilot’s vote will not impact service. ALPA represents 6,000 FedEx pilots.

This is not the only negotiation between the ALPA and another business. United Airlines closed out a deal earlier in July, while American Airlines and the ALPA are revisiting negotiations soon.

Our take: FedEx pilots are not threatening a strike yet but have rejected the latest offer from the carrier for a new contract. This is something for shippers to keep an eye on.

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