UPS and Teamsters Reach Deal for Package, Freight Workers

This story appears in the May 6 print edition of Transport Topics.

Now that tentative five-year agreements between UPS Inc. and the Teamsters union have been reached, about 250,000 workers in the company’s package and freight units will vote in a ratification process that may take two months.

There are separate agreements for the 238,000 Teamsters in the UPS package unit and 12,000 at UPS Freight, the less-than-truckload subsidiary. The union said the package unit’s deal is the nation’s largest collective bargaining agreement.

Scott Davis, the CEO of Atlanta-based UPS, said the deal is sure to benefit all parties.

“These agreements are a ‘win-win-win’ for our people, customers and shareholders,” Davis said. “The fact that we have reached agreements well before our current contracts expire is a testament to the skills and determination of all those involved.”

The announcement on April 25 came more than three months before the July 31 expiration.

A tentative agreement also was reached three months before the union rank-and-file voted on the current contract.

In 2002, talks continued until just two weeks before the expiration date, and in 1997, the union went on strike after a contract expiration, causing diversion of package shipments to competitors.

While the union targeted completion of the mail voting process by mid-June, the Teamsters didn’t announce when the ratification process would begin. There also was no scheduled date for the meeting between union negotiators and local leaders to explain terms before the vote begins.

Neither the company nor the union released contract details.

The pact includes a $3.90-per-hour wage increase over the course of the agreement, Teamsters for a Democratic Union said on its website. The starting wage listed in the current contract for full-time workers is $16.10 per hour.

The union’s statement said workers will receive “substantial pay raises, including a significant increase in the starting wage rate for part-time employees.”

“These are solid tentative agreements that all Teamsters at UPS and UPS Freight can be proud of,” said General Secretary-Treasurer Ken Hall, co-chairman of the negotiating committee and director of the package division.

“We have achieved our members’ priorities of preserving their excellent health-care benefits and protecting them into the future while also strengthening their pensions and providing pay raises,” he said.

The tentative agreement moves 140,000 package workers into Teamster-controlled health plans from a company plan, the union said.

The union said it also received a commitment to create more than 2,000 full-time jobs. More than half of the package division’s Teamsters today are part-timers.

At the LTL unit, the union said there will be “substantial rate increases” as well as lower health insurance co-payments and a commitment to put all laid-off road drivers back to work.

Bringing back those workers resolves issues of subcontracting, the union said.

Calling the deal “a great day for the Teamsters union,” General President Jim Hoffa, the other co-chairman of the negotiating committee, said in a statement that the deals “are shining examples to the entire country of a hugely successful unionized company that thrives because of its workers.”

UPS ranks No. 1 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.