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It was a week of finger-pointing, harsh words, and walkouts for UPS and the Teamsters. As the July 31 contract deadline rapidly approaches, the transportation industry is watching to see whether or not UPS’s 350,000 Teamsters, led by General President Sean O’Brien, will go on strike. With little signs of positive momentum in increasingly fractious negotiations, the threat of a strike at UPS is higher than ever.
However, UPS isn’t the only carrier losing sleep over labor issues: The International Longshore and Warehouse Union Canada has brought operations to a standstill on Canada's West Coast, stopping all work at the busy Port of Vancouver. Here is our weekly recap of the labor strife and other headlines making news in the supply chain transportation industry.
Shippers have recently turned to single-source logistics to streamline complex supply chains. While these streamlined supply chains helped shippers navigate the lows of the COVID-19 era, in the post-pandemic transportation landscape, they’re proving to be more hazardous than helpful. As labor negotiations sour, shippers are searching to diversify their carrier base—and fast.
“It’s much too late for shippers to do anything to mitigate the effects of a strike at this point,” said Mark Magill, a sales executive at last-mile delivery provider OnTrac in a quote obtained by FreightWaves, “But with this drama going on only 27 days before the Teamsters’ contract is up, it should prompt any savvy shipper to start onboarding additional carriers by September because it clearly demonstrates the extreme risk of single sourcing.”
As negotiators struggle to find their footing, union boss O’Brien points to part-time pay as a significant point of contention between the International Brotherhood of Teamsters and UPS. “We are probably $6 to $7 per hour apart on where these part-timers need to be for starting rates of pay, but also where they need to be for the long-term employees,” O’Brien told Supply Chain Dive.
While the average part-time hourly pay for a UPS employee starts at $20, Teamsters leadership points to the significant pay discrepancy between part-time and full-time employees as a primary concern.
Following a contentious stretch of negotiations between UPS and the Teamsters, primary UPS competitor FedEx appealed to parcel customers worried about the potential disruption to their parcel supply chains.
“In the event of an industry disruption, FedEx Corporation’s (NYSE: FDX) priority is protecting capacity and service for existing customers,” read the July 6 press release, “Therefore, shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now.”
While the threat of a large-scale port strike along the West Coast of the United States appears to have diminished, the same can’t be said for the Canadian branch of the International Longshore and Warehouse Union.
ILWU Canada points to its jurisdiction over its rank-and-file maintenance duties as the primary motivator beyond the strike. However, the BCMEA disagrees, arguing that the current jurisdiction over maintenance duties reflects a long-standing legal precedent. As the ILWU strike continues, the government of Canada is repeatedly asking both parties to return to the negotiating table.
“The reality is, our people do hard work under difficult, often dangerous conditions, and they kept Canada’s economy moving through the worst of the pandemic,” said ILWU President Rob Ashton in a July 6 press release, “That’s a long ways from the picture the employer wants to paint. It can be a good living, but it takes years of sacrifice to get there, and it’s still hard work.”
On Wednesday, July 5, two firefighters died while extinguishing a fire onboard a car-carrying vessel owned by Italian carrier Grimaldi Group docked at the Port of Newark, NJ. According to a July 6 press release from the United States Coast Guard Unified Command, the fire began as the carrier was being loaded with vehicles. The crew then activated an onboard fire suppression system. While the circumstances that led to the death of Augusto Acabou, 45, and Wayne Brooks Jr., 49, are unclear, investigations are ongoing.
“On behalf of the Unified Command, I would like to express my heartfelt condolences to the families and colleagues of the two firefighters who tragically lost their lives and those injured during the response,” said Zeita Merchant, Captain of the Port of New York and Jersey. “We continue to work closely with our partner agencies and neighboring jurisdictions. Together, we are pooling our resources, expertise, and equipment to enhance the safety of all responders and maximize the effectiveness of our response efforts.”
Three large North American railroads have agreed to join forces to create a new freight corridor operating through Mexico, Texas, and the U.S. Southeast. Canadian Pacific Kansas City, CSX Corporation, and Genesee and Wyoming Inc. plan to leverage the expanded freight corridor to increase service in growing U.S. and Mexican markets.
“CSX is excited to establish this new interchange connection with CPKC, which provides shippers with a compelling transportation option with access to markets in Texas and Mexico as well as into the heart of the thriving and dynamic U.S. Southeast,” Joe Hinrichs, President & CEO of CSX said in a June 28 press release. “This new service is a demonstration of our commitment to creating product offerings for shippers that help them leverage the efficiency and sustainability advantages of rail to drive growth.”
Following lengthy negotiations, the state of California has agreed to work with truck makers to improve sustainability in overland transportation. In a July 6 announcement, the California Air Resources Board and the Truck and Engine Manufacturers Association said they would be phasing out sales of Class 4-8 diesel-powered trucks. In the compromise, regulators assured the industry group of extended timelines to meet these new requirements and relaxed requirements around existing nitrous oxide regulations.
“This agreement reaffirms EMA’s and its members’ longstanding commitment to reducing emissions and to a zero-emissions commercial vehicle future, and it demonstrates how EMA and CARB can work together to achieve shared clean air goals,” EMA President Jed Mandel said. “Through this agreement, we have aligned on a single nationwide nitrogen oxide emissions standard, secured needed lead time and stability for manufacturers, and agreed on regulatory changes that will ensure continued availability of commercial vehicles. We look forward to continuing to work constructively with CARB on future regulatory and infrastructure efforts designed to support a successful transition to ZEVs.”
While the transportation industry watches with bated breath as the Teamsters and UPS take negotiations down to the wire, shippers aren’t waiting until O’Brien calls a strike to take steps to safeguard their supply chain. By partnering with Intelligent Audit, shippers can access an invaluable suite of transportation optimization solutions.
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