Jul 5, 2023 - Economy

UPS driver strike looms after labor negotiations break down

A UPS driver makes deliveries in Santa Monica, Calif. Photo: Patrick T. Fallon/AFP via Getty Images

Labor talks between UPS and its unionized drivers and warehouse workers broke down early Wednesday, with both sides accusing the other of walking away from the negotiating table.

Why it matters: If no deal is reached, a strike could throw the supply chain into chaos, disrupt the U.S. economy and push customers toward rival shipping companies.

  • The workers' current contract expires July 31. No additional negotiations are currently scheduled, the Teamsters Union said.

The big picture: The Teamsters — who represent more than 340,000 UPS workers nationwide — said that UPS "walked away from the bargaining table" after putting forth an "unacceptable" offer that was rejected by the Teamsters.

  • UPS refuted the claims in its own statement, saying UPS has not walked away from negotiations but rather that the Teamsters "stopped negotiating despite UPS's historic offer."

State of play: The negotiations have been held up by disagreements over pay and cost of living increases.

  • The union argues that salaries haven't reflected the large profits UPS enjoyed in recent years, Bloomberg notes.
  • The Teamsters also say UPS hasn't done enough to reward workers who risked their health to deliver packages during the pandemic.

Between the lines: UPS delivers 20 million packages every day in the U.S. Should a strike occur, competitors like FedEx and the postal service likely wouldn't be able to absorb all of the extra load, snarling supply chains.

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