Teamsters, UPS battle may be just a warmup for future Amazon fight, experts say

Talks between the United Parcel Service and the International Brotherhood of Teamsters may have the added complication of union leaders taking a harder line in an effort to attract workers at retail giant Amazon, sources said this week.

The Teamsters and UPS are in heated negotiations over a new contract, with a Teamster strike authorized by union membership if UPS fails to deliver a new pact before their current deal expires July 31.

Such a protest would be the largest single-company strike in decades; the union last walked off the job at UPS in 1997 for a 15-day strike that snarled the package supply chain worldwide.

But talks between the Teamsters, who represent about 340,000 UPS workers, and the company collapsed Wednesday despite appearing to have reached a deal days earlier.

Each side blamed the other for walking away after marathon Independence Day negotiations failed to yield an agreement despite signs of early progress.

Is Amazon the next Teamster target?

The continued pressure being put on the company may be part of a push by Teamsters General President Sean O’Brien to showcase the union’s political clout, sources watching the negotiations told The Hill, complicating efforts to reach a deal.

Experts said they believe any new five-year contract negotiated between the Teamsters and UPS could send a signal to workers at Amazon that the union is ready to work for them, seeing an overlap in the kinds of jobs both companies offer.

“Clearly, this is a union that has deep roots in warehousing and logistics, distribution, Amazon-type of work. And they have ambitions, I think, to try to organize workers in this industry, among them Amazon,” Bob Bussel, director of the Labor Education and Research Center at the University of Oregon, told The Hill.

“The result of this, if they’re recognizable gains for workers as a result of collective action that the union really can deliver, is that will send a very powerful signal to workers at Amazon and workers at other places that there’s a powerful union that’s really prepared to take collective action and effective action on their behalf,” he added.

Talks have taken a complicated route

Despite multiple sessions of high-pressure talks throughout last weekend — and repeated threats of strike that could paralyze part of the supply chain — the union said that concessions made so far had faltered on compensation issues.

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. The company’s 2022 operating profits hit more than $13 billion, for an operating margin of 13 percent.

In January, UPS 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.

“It’s about $100 billion dollars that UPS made. It’s embarrassing for [UPS] when there are part-timers, who provide the goods and services, load those trucks and sacrifice time at home, are living in subsidized housing or are maybe on the food stamps program. It’s embarrassing for them,” O’Brien said Friday on MSNBC’s “Morning Joe.”

Thus far, both sides have had setbacks in negotiations, but many experts believed earlier this week that a national strike had been almost completely averted Sunday.

That’s when the Teamsters and UPS said they’d struck a tentative deal on some of the biggest sticking points thus far, including a set of changes to the company’s wage system and a new holiday schedule as part of a larger bid for improved working conditions.

UPS and the Teamsters agreed to nix a dual-wage system for delivery drivers, make Martin Luther King Jr. Day a full holiday and other changes the union said would end “forced overtime on drivers’ days off.”

The Teamsters also put out a statement vowing progress on “economic” issues such as “higher wages” and others, as workers press for a greater share of the company’s high profits.

Last week’s progress added to a host of “non-economic” issues both sides say they’ve agreed to, including heat-mitigation efforts such as air conditioning in certain newly purchased trucks in hotter areas beginning next year.

The tentative deal appeared to signal a breakthrough in talks between the union and UPS after the group threatened a strike would be “imminent” last week amid disagreements over the economic portion of the new five-year contract.

UPS set company records for profits in the last two years, as online shopping soared during the pandemic; the company had a market cap north of $150 billion early Friday.

Amazon remains a tough nut for unions to crack

Ongoing negotiations arrive at a critical time for the Teamsters as they work to gain ground at Amazon, where unionization efforts have struggled to pick up much nationwide momentum in recent years.

Amazon’s dominance of online shopping, rapid expansion and reputation for harsh working conditions have made it a prime target for the Teamsters.

As its profits have grown exponentially over the years, so has Amazon’s workforce. According to the company’s website, 4.3 million jobs are supported by Amazon, including 1 million full- and part-time jobs “directly created by” the e-commerce giant in the U.S.

Amazon has faced scathing criticism for its conditions at some company warehouses, including worker complaints of safety hazards, as well as allegations of retaliation against warehouse organizers.

Amazon leaders have touted its “competitive pay” and benefits, while dismissing a unionization push that has picked up traction in different parts of the country. 

“As long as we offer competitive pay [and] invaluable benefits, we don’t think that our people will choose to be represented, but this is their choice,” Stefano Perego, who serves as vice president of customer fulfillment and global ops services for North America and Europe at Amazon, told CNBC earlier this year.

But reports over the past year have also documented aggressive anti-union efforts undertaken by Amazon, which landed the company in hot water with the National Labor Relations Board in January.  

Amazon workers in Staten Island voted to unionize last year at a warehouse known as JFK8.

But further efforts to unionize in New York and other facilities have had difficulty gaining traction as Amazon has resisted similar pushes, even as unions abroad have seen much more success at the company.

Last year, analysts for Morgan Stanley estimated that the company could see an increase of $203 million in operating expenses, according to CNBC, if workers at JFK8 saw their pay rise to an hourly wage of $29.

Any effort by the Teamsters to unionize across Amazon’s workforce could face similar resistance from management.

“It can go both ways,” said Erin Hatton, professor at the University of Buffalo whose studies focus on work and political economy, adding that while she “really could see the Teamsters doing well against this formidable foe,” she said Amazon is “still formidable.”

Push for new contract creating war of words between sides

Efforts by the union to draw attention to negotiations with regular press conferences and statements have also been criticized by market watchers as bombastic and unhelpful.

O’Brien pushed back on that claim, telling The Hill on Friday that “if UPS is so obsessed with noise, they should consider the thunder that 340,000 UPS Teamsters are going to make when we hit the streets on Aug. 1 if UPS continues down this road of disrespect.”

O’Brien said negotiations will continue until economic issues affecting Teamster members are addressed by UPS.

“UPS wants to silence an enraged and engaged workforce because the company’s afraid it will negatively impact their stock price, which is the only thing they truly care about,” he said.

“If that’s an inaccurate observation of their corporate misbehavior, UPS could easily prove the Teamsters wrong by paying up the wages now that part-time and full-time workers deserve.”

Teamsters, Amazon have tussled before

The Teamsters are among several unions that have drawn attention in recent years for attempting to organize workers at Amazon.

The union launched an Amazon Division last year aimed at “securing more workplace protections in the warehouse and logistics industry.”

More than 80 drivers and dispatchers with Battle-Tested Strategies, which contracted with Amazon as a delivery service partner, agreed to join the Teamsters union in what the union then called a “historic first” for Amazon workers.

But Amazon has rejected those claims, instead accusing the union of being “intentionally misleading” Wednesday.

“Their contract is with Battle Tested Strategies, not Amazon. The facts remain that months ago, Amazon terminated its contract with Battle Tested Strategies effective June 24. That company and their employees no longer deliver Amazon packages,” Amazon spokesperson Eileen Hards said.

The Hill has reached out to the union for comment.

Those types of skirmishes are exactly what Amazon — and unions looking to reach its workers — are watching for closely, experts said.

“I suspect [Amazon and Amazon workers] have their eye on the results of this negotiation,” Bussel said.

“If [the Teamsters] achieved … recognizable, visible gains, given the industry that they’re in the profile of UPS, that’s gonna send a powerful message … to Amazon workers and, you know, actually to Amazon management as well. How explicit the connection is, I think that that’s a little more speculative,” Bussel said.

“So the effort that they’re putting in — as far as rallying, mobilizing, preparation, all the work they’re doing to prepare for a strike — that’s a type of warmup or, shall we say, exercise that can then be used or adapted to an organizing drive that they might try to ramp up or to support organizing in Amazon,” Bussel said.