UPS and the International Brotherhood of Teamsters have reached a tentative agreement on a five-year national contract, a massive step forward for hopes to avoid a strike of more than 340,000 workers before the July 31 deadline.

The deal proposed by UPS and agreed upon by Teamster leadership is a five-year contract.

The Contract

After tumultuous rounds of negotiations over the past few months that included progress as well as breakdowns, and even caused UPS to recently begin training managers to deliver packages as a contingency plan, a tentative contract has been agreed upon that satisfied negotiators for both sides.

“UPS has put $30 billion in new money on the table as a direct result of these negotiations,” says Teamsters general president Sean M. O’Brien. “We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers.”

Included in the new contract are provisions for:

  • Higher wages
  • More jobs
  • Equal pay
  • Air conditioning in all new vehicles
  • Martin Luther King Jr. Day recognized as a full holiday
  • Increased rewards for part-time workers

The full extent of terms that the Teamsters won in negotiations can be found in the Teamsters’ press release.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” says Carol Tomé, UPS CEO. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

The new deal will now go through the ratification process.

  • The UPS employees represented by the union will be presented the contract for a vote.
  • The members can vote on the national master contract as well as supplemental regional contracts as they are applicable.
  • Ratification requires a majority “yes.”
  • Teamsters’ leadership has previously said union members will work through the ratification process, which could take weeks to complete.
  • Voting will run from August 3 through August 22, at which point the contract can become official in the event a majority “yes” is reached.

A tentative agreement between UPS and Teamsters leadership is not a guarantee that the agreed upon contract will be ratified. At the end of last year, a railway labor agreement was rejected by members of the union in a vote, bringing the two sides back to the negotiating table.

Promo Perspective

The tentative agreement is a crucial step in avoiding disaster. A work stoppage would be catastrophic for the U.S. economy, including the promotional products industry. UPS ships more than 24 million packages most days, and unionized Teamster labor is crucial in getting deliveries onto its trucks. In short, losing that workforce, even temporarily, would have been a supply chain nightmare with financial implications.

  • If ratified, the contract is set to last five years between the two sides, which would give promo companies a long breath before having to again consider contingency plans.

The ramifications of the new contract are unlikely to be known until after ratification, but promo companies should prepare for the possibility that UPS might pass on the costs associated with conceding to the Teamsters’ demands to UPS customers.

  • On one hand, much like with any company, investing in employees can result in an increased quality of service with greater efficiency and less possibilities for disruptions.
  • However, a lesson that can be learned from this process is that UPS is not promo companies’ only option, and as a potential strike proved, there is some danger in acting as though they are.

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