UPS Inc. ought to be prepared to lose as much as 30% of diverted volume should the Teamsters strike the corporate by the tip of the month and a piece stoppage last for an honest duration, a number one parcel consultant said Monday.
UPS handled about 18.6 million parcels within the U.S. per day in the primary quarter. Under a contingency plan, it expects to handle 4 million parcels by itself. The balance of about 14.6 million parcels, most of which can be ground deliveries, can be subject to diversion.
Satish Jindel, president of consultancy ShipMatrix, said in a communique to FreightWaves that the 30% of volume that might be lost can be akin to greater than 4 million parcels a day.
Because there are about 80,000 package automobile drivers and every driver delivers about 230 parcels per day, the diverted volume, if it never returns to UPS (NYSE: UPS), could end in 4,300 lost driver jobs and people of a couple of thousand package handlers for each 1 million packages diverted, he said.
Unlike the last Teamster strike in 1997, there may be loads of competition for diverted volume. For instance, FedEx Corp., (NYSE: FDX) whose ground unit didn’t exist back then, is delivering on-time performance for air and ground on par with UPS, in accordance with Jindel. This may give shippers more confidence to maintain diverted volumes with FedEx, he said.
On Sunday, the U.S. Postal Service launched “Ground Advantage” with two-to-five-day transit times comparable to FedEx and UPS. Jindel envisioned a scenario by which large shippers divert lightweight parcels under 5 kilos that may slot in a mailbox to the Postal Service and the heavier parcels to FedEx.
The potential damage to UPS and its unionized staff behooves each side to return to the table and resume negotiations, Jindel said. Talks collapsed last week reportedly over an inability to return to terms on part-time wages. No recent talks are scheduled. The present contract expires July 31.
“Being very tough in negotiations is analogous to stretching a rubber band,” Jindel wrote. “Nobody knows the total limit before it snaps after which one has to begin all another time with a brand new set of conditions.”
Individually, for the minority of Teamsters union members at UPS who don’t favor a strike should a contract not be agreed to in three weeks, the National Right to Work Legal Defense Foundation on Monday issued some advice.
All UPS employees can resign their membership within the union and proceed to do their jobs, in accordance with a legal notice issued by the inspiration. “When you don’t support the union you’ll be able to send the union a letter resigning your membership at any time,” the notice said.
As well as, employees who resign their membership — or who’re already nonmembers — have the suitable to work even when the union orders a strike. “Union officials can — and infrequently do — fantastic union members hundreds of dollars for working during a strike,” the notice said. “So it is best to seriously consider resigning your union membership before you come back to work during a strike, which is the one technique to avoid fines and discipline.”
Employees working in a “right-to-work” state, where union membership and financial support are voluntary, can resign their membership and opt out of all union financial support, in accordance with the notice.
Employees not working in a state with those protections have the suitable to opt out of paying dues for union politics and should have the ability to avoid other union financial support, in accordance with the notice. In non-right-to-work states, unions can still only mandate that employees pay dues as a condition of employment if the union and management have finalized a union monopoly bargaining contract that comprises a sound forced-dues clause, the notice said.
About 97% of UPS’ members have voted to authorize a strike if a contract shouldn’t be reached by July 31. The Teamsters represent 340,000 UPS employees, a lot of them part-timers.