We recently posted about the on-going (and at times contentious) negotiations that were taking place between the Teamsters Union and UPS. The Wall Street Journal is now reporting that both sides have finally reached an agreement. While not officially ratified by the rank and file union members, the new contract seems to focus on the main sticking points that were previously reported.
Here is what we know about the final agreement:
According to the Teamsters negotiating team, workers will see a $4.15 wage increase over a five year period while the starting hourly wage for part-time workers will increase to $13 an hour.
New “Hybrid” drivers (see below) were initially reported to get a starting salary of $15 per hour, topping out at $30.
One of the main obstacles that the two sides faced was the idea of creating a new category of driver called “Hybrid Drivers,” who would primarily be working on weekends. The reason for this new category of drivers is so that UPS can grow its Saturday deliveries (and maybe even Sunday), which, as a result of eCommerce, is only going to increase.
The new driver scheme was a particular point of contention between the negotiators and the rank and file UPS workers. In fact, a dissident group within the Union established itself as patently opposed to the idea – and it seems they were marginalized by the chief UPS negotiator.
The reason for the uproar is that, with the new category of driver taking over weekend deliveries, regular drivers will lose the opportunity for the huge overtime pay they were getting for working weekends.
So how will all of this impact shippers? It’s likely that not much will change initially, but, over time, there is potential that shipping prices will decrease – due to the increased weekend deliveries. The question is, will UPS’ greater capacity meet the ever-increasing demand?
If this agreement is officially finalized, UPS would avoid its first strike since 1997.