What Looming UPS Strike Would Mean For VA Consumers And Businesses

VIRGINIA — Thousands of UPS drivers in Virginia could go on strike by the end of the month if they’re unable to resolve differences over cost-of-living raises and increasing part-time workers’ pay.

In Virginia, UPS delivery drivers and warehouse logistics workers are represented by the Teamsters Union Local 639, Local 332, Local 171 and others. The current contract for the 340,000 full- and part-time UPS workers nationwide is set to expire July 31. UPS workers voted for a strike authorization last month, and union chief Sean O’Brien said last week a strike was imminent.

If the 340,000 UPS workers go out on strike, it would be the largest strike against a single company in U.S. history and the largest strike of any kind in the country since 1959 when more than 500,000 steelworkers went on strike.

The last UPS strike was in 1997 when 185,000 Teamsters went on strike for more than two weeks and were able to win a new contract.

The threat of a strike by Teamsters Union-represented package delivery drivers and logistics workers comes as Virginia residents become increasingly reliant on package deliveries.

UPS moves about 24 million packages a day across the country — an amount equivalent to 6 percent of the nation’s gross domestic product, the company said. More than 70 percent UPS’s U.S. employees are Teamsters.

Unlike the railroad labor conflict that allowed the federal government to step in and prevent workers from going on strike, UPS Teamsters work under the National Labor Relations Act, which does not give Congress the power to impose a contract.

William Davis, president of Local 639, which represents 4,000 UPS drivers in Virginia and Maryland, said the union has a fund from which out-of-work drivers would be compensated if a strike is announced. Out-of-work benefits are calculated at five times the member's taxable dues rate, with a minimum benefit of $200 per week.

Workers in right-to-work states like Virginia do not get strike benefits unless they join the union.

Local 639 represents workers at UPS facilities in Springfield, Alexandria and Chantilly, as well as five UPS facilities in suburban Maryland.

A strike could make it harder for Virginia residents to get everything from food to medical supplies.

Davis asked that residents who rely on UPS drivers to receive important deliveries be patient and support the efforts of the drivers in their quest for better wages and benefits. He also noted that UPS is forcing his members to work six days a week, along with the forced and excessive overtime they work during the rest of the week.

Another concern is that surveillance cameras and UPS timing each stop make it difficult for drivers to take bathroom or meal breaks. Some drivers have switched to working at UPS warehouse hubs because of the stress now placed on drivers.

"Annual profits at UPS are about three times higher than they were pre-pandemic, and the Teamsters would like to see more of those profits trickle down to drivers," said Jadrian Wooten, a Virginia Tech professor of economics.

Wooten said a UPS strike would have a major impact on the U.S. economy. "That disruption could have ripple effects in the broader economy, with higher prices caused by the impact on the supply chain, or a reduction in consumer spending as a result of the uncertainty in delivery options," he said.

“A lot of people will be affected,” Philadelphia Teamsters Local 623 secretary-treasurer Richard Hooker told the Philadelphia Inquirer. “A lot of small businesses, a lot of corporations, will be affected by us not being able to work.”

Even before the pandemic, consumers were swapping in-store shopping for door deliveries, and that could make a strike more disruptive than the last strike in 1997 when 185,000 UPS workers picketed, crippling the company. With some 340,000 workers — more than half of UPS’ total workforce — set to strike, the economic pain could be more widespread. If it happens, it would be the largest single-employer strike in U.S. history.

Small businesses in Virginia that rely on UPS for package deliveries may have to find alternative shipping options if the company’s remaining workforce isn’t able to meet demand during a strike.

“There’s no good that comes from this for the consumer. There’s no good that comes from this for the merchants. And there’s no good that comes from other players in the industry,” Gregg Zegras, president of Pitney Bowes’ global e-commerce business unit, told Vox.

Jason Miller, interim chair for the supply chain management department at Michigan State University’s business school, agrees.

“If I had to put it on a scale with one being not at all disruptive and seven being pure economic catastrophe, this is probably a five right now,” he told Vox.

UPS stands to lose in the strike, too. Logistics consultant Satish Jindel told Reuters that FedEx, which handles about 12 million packages a day, has the capacity to handle three or four million more “easily without sweating,” adding, “And they would love to keep it.”

Competitors such as FedEx and the U.S. Postal Service could pick up some deliveries, but logistics networks are already strained. UPS handles about a quarter of U.S. package deliveries, according to the shipping technology company Pitney Bowes, which collects data on the package delivery industry.

Negotiations broke down last week, with each side blaming the other for the impasse.

UPS has already agreed to get rid of its two-tier wage system, which the Teamsters said underpaid part-time workers. And they’ve agreed to add air conditioning to UPS trucks, a major victory for drivers amid mounting reports over the past few years of drivers suffering heatstroke and having to go to the emergency room.

The main sticking point now concerns wages paid to part-time workers. Nationally, the average part-time UPS employee makes $20 an hour. After 30 days with the company, they’re eligible for health insurance and tuition reimbursement.

UPS offered $6 or $7 less per hour for part-timers than the union wanted, O’Brien, the Teamsters president, told the industry publication Supply Chain Dive.

The Teamsters Union says any tentative agreement must be endorsed by its national committee before it is sent to the locals for ratification. The union has said it will not negotiate past the expiration of the current contract.

UPS’s profits over the past two years are more than three times what they were before the pandemic. UPS returned about $8.6 billion to shareholders in the form of dividends or stock buybacks in 2022, and forecasts another $8.4 billion for shareholders this year.

In its third-quarter 2022 earnings report, UPS reported revenues of about $24.2 billion, up about 4.2 percent from the same period a year prior. That calculates to about $170 million UPS stands to lose every day its workers strike.

The negotiations could help set a new standard for all package delivery companies. Overall, 1.115 million workers are employed in the courier and messenger industry, according to the Federal Reserve Bank. UPS employs about a third of those workers.

“This is a crucial time in American labor,” Hooker told the Philadelphia Inquirer. “We’re just demanding more because we have been pushed to the brink, and we’re not gonna settle for anything less than what we are worth.”

The Associated Press contributed reporting.