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UPS Strike Looming: What You Need to Know

The president of the United Parcel Service (UPS) union called on workers to prepare for a strike. The move comes as the Teamsters union is pushing for higher part-time wages, the last major point of contention in extending a five-year collective agreement that expires on July 31. The union president said he asked the White House not to interfere with the strike.
Sean O’Brien, president of the International Brotherhood of Truckers, said in a webcast with union members on Sunday that the Teamsters union has had “multiple” communications with the White House. If an agreement cannot be reached, the strike will start on August 1.
The American think tank AEG estimates that if UPS truck drivers go on strike for 10 days, the economic loss will be as high as 7 billion U.S. dollars, which will be one of the most expensive strikes in a century.

“The White House shouldn’t care about the Teamsters union. They should care about Corporate America because they keep reaping billions of dollars in profits from the hard work of our members. We will never allow anyone to break their contract,” he said.

Under the emergency provisions of the Taft-Hartley Act, it is possible for the President of the United States to intervene. Former U.S. President Jimmy Carter had invoked the act to end the 1978 miners’ strike. In December, President Biden and Congress intervened in a strike by railroad workers and successfully stopped strike action, but under the Railroad Labor Act, which applies only to the railroad and airline industries and does not include UPS workers.

Union members have voted to authorize O’Brien to call a strike, a power he will be free to exercise once his current contract expires. About 340,000 workers will go on strike on Aug. 1 if the two sides fail to reach an agreement, O’Brien said Sunday .

O’Brien said that if the two sides can reach an interim agreement, the Teamsters union will continue to perform its duties until the agreement is approved, a process that could take about three weeks. He also noted that unions had already set up pickets across the country in preparation for the strike.

The International Truckers Union (IBT) represents about 340,000 UPS workers, including drivers, package handlers and loaders, who handle about a quarter of the packages in the United States every day.

AEG said the strike by UPS truckers could be “one of the most expensive strikes in at least a century ” and would cost as much as $7 billion for 10 days.

AEG estimates that UPS customers will lose $4 billion and direct payroll losses of more than $1 billion. A 15-day strike by UPS workers in 1997 disrupted the supply of goods, cost UPS $850 million and caused some customers to go to rivals such as FedEx.

Stifel analyst Bruce Chan said in a recent note that UPS faces a dilemma: either risk truckers striking, or acquiesce to the truckers’ demands, which could further exacerbate the company’s labor cost disadvantage.

This event may have an impact on several fronts.

Logistics and supply chain: Since UPS is a global logistics service company, strikes may lead to disruptions in logistics transportation, delays in deliveries, and may even lead to shortages of items in certain areas. This could negatively impact the supply chains of many businesses and consumers.

Economy: UPS is one of the largest logistics companies in the United States, and its business involves a wide range of operations. The strike may have a considerable impact on the economy. Not only may it lead to business losses, but it may also affect consumer confidence and purchasing power, hindering overall economic activity.

Labor Relations: The strike has the potential to spark broader labor disputes and discussions. Demands for higher wages for part-time workers may arouse other trade unions or labor organizations to demand their own rights and interests, and draw public attention to labor treatment and trade union rights.

Political factors: Government and political leaders may be forced to mediate if strikes are prolonged or widespread. This leads to political debate and discussion, as well as a deeper look at labor laws and industrial relations.

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