Negotiations collapse between Teamsters and UPS as strike looms

Talks between shipping giant UPS and the International Brotherhood of Teamsters union fell apart early Wednesday morning, increasing the likelihood of what would be one of the largest strikes in U.S. history.

Representatives from UPS and the Teamsters failed to reach a deal on a new contract for the roughly 340,000 union members who work for the company. Each side blamed the other for walking away after marathon Independence Day negotiations failed to yield an agreement despite signs of early progress.

“Around 4 a.m., UPS walked away from the bargaining table after presenting an unacceptable offer to the Teamsters that did not address members’ needs. The UPS Teamsters National Negotiating Committee unanimously rejected the package,” the Teamsters said in a statement released Wednesday morning.

The Teamsters voted at the end of June to authorize a strike if a deal is not reached before the current contract expires July 31 and insisted last month they would need an agreement no later than July 1.

UPS and the union are still at odds over wages, benefits and compensation.

“This multibillion-dollar corporation has plenty to give American workers — they just don’t want to,” Teamsters General President Sean M. O’Brien said in the statement.

UPS encouraged the Teamsters on Wednesday to continue with negotiations.

“The Teamsters should return to the table to finalize this deal,” UPS said in a statement provided to The Hill. “We have nearly a month left to negotiate. We have not walked away, and the union has a responsibility to remain at the table.”

“Refusing to negotiate, especially when the finish line is in sight, creates significant unease among employees and customers and threatens to disrupt the U.S. economy,” the company said.

The Teamsters have already secured some improvements in working conditions, including an agreement to install heat shields and fans in trucks, after social media posts by drivers toiling in extreme heat went viral last year.

UPS also agreed this weekend to scrap a two-tiered wage system, acknowledge Martin Luther King Jr. Day as a full holiday and end forced overtime.

But the main phase of talks, which pertains to wages and salaries, is proving more difficult.

As part of the manual labor-intensive shipping industry, UPS has cited its “ability to control labor costs” as a significant factor in its business.

“Our ability to control labor costs has in the past been, and is expected to continue to be, subject to numerous factors, including turnover, training costs, regulatory changes, market pressures, inflation, unemployment levels and healthcare and other benefit costs,” the company wrote in its 2022 end-of-year filing with the Securities and Exchange Commission (SEC).

UPS drivers make $18.05 an hour in Arkansas, $17.63 in Oklahoma, and $21.02 in Connecticut, according to Indeed.

UPS made $11.5 billion in net income in 2022 as profits exceeded fourth-quarter expectations. 2022 operating profits hit more than $13 billion for an operating margin of 13 percent.

In January, the company increased its shareholder dividend by 6.6 percent to $1.62 per share and announced a new stock buyback program worth $5 billion — money the company could alternatively spend on its labor force.