UPS Freight workers voted in favor of approving a new labor contract, avoiding the risk of a strike that could have affected shippers transporting their goods around the country.
However, it’s possible the labor turmoil leading up to the contract vote could have a lasting impact on the company’s freight business and some of its workers.
During the days leading up to the Teamsters contract vote count on Sunday, Sandy Springs-based UPS had stopped picking up shipments from freight customers to empty its network of freight by last Friday in case there was a strike.
UPS said Sunday evening it will resume normal freight operations “and will immediately begin accepting new volume from UPS Freight customers.”
UPS spokesman Glenn Zaccara said workers will be called back to work “as we receive orders from our customers.” The number of workers called back to work will depend on the orders that come in, he said.
The Teamsters contract covers about 11,600 workers at UPS Freight, which trucks bulk shipments on pallets from shippers to stores and other locations.
It’s yet to be seen how much impact the temporary disruption had on UPS Freight’s business.
“We expect to bring as many workers as we need back to work based on the business needs,” Zaccara said. “There is a possibility” that could be less than the previous workforce, he acknowledged.
The contract was approved with 77 percent of votes cast in favor, according to the International Brotherhood of Teamsters. The union said 84 percent of eligible members voted.
It was a second contract vote, after freight workers at UPS in early October voted down an initial proposed labor contract. More than 62 percent of votes cast were against that agreement. The two sides returned to the bargaining table and wrapped up negotiations Oct. 25, with UPS making a last, best and final offer.
The union told its members that the offer did not address all issue raised by workers, but it was putting the labor agreement up for a vote without a recommendation for or against, “as the consequences of this decision are yours alone to make.”
UPS Freight workers had earlier voted to authorize a strike, and the Teamsters union told members that if the contract was voted down, a strike could start as early as Nov. 12.
As a result, UPS a week and a half ago told its freight customers to make alternative shipping arrangements because service could be disrupted.
“Because we do not have a guarantee against a work stoppage, we cannot afford to put our customers’ volume at risk of being stranded in our system,” UPS said when it was awaiting the contract vote results.
Kris Taylor, co-chair of the national UPS freight negotiating committee for the Teamsters, called that "an unprecedented action."
He told members during a conference call Sunday evening that there would be a ramp-up period for the company to get freight back into its system.
After narrowly avoiding the risk of a strike, "there could be that impact of a customer saying, 'Yeah, forget it, we're not interested, we don't want to be your customer anymore," said logistics analyst Cathy Roberson, who founded Logistics Trends & Insights in Atlanta. "At the same time, there may be some customers saying, 'Oh great, you handled that wonderfully, so please take our freight.'"
Taylor told Teamsters members at UPS Freight that those who are not called back to work should file for unemployment compensation “just like any layoff.” He also said other unionized freight companies are hiring, and UPS Freight workers who are not recalled within a week should apply for jobs at other companies.
“I am hopeful that the company will get back to full operations quickly. I expect, however, that there will be some lost customers. It’s unfortunate, but that is the boat we’re in,” Taylor said.
The labor deal approved Sunday includes some reductions in subcontracting -- a key issue for workers -- and would also improve some terms for pension and vacation benefits.
But some dissident groups within the Teamsters union were looking for bigger wage increases and more limits on subcontracting.
“Too many jobs in this company are subcontracted out,” said Ken Paff, national organizer for Teamsters for a Democratic Union, a dissident group within the Teamsters. “And the wage increases, especially for the road drivers, were infinitesimal.”
The freight agreement approved Sunday is one part of a massive round of labor contracts in progress at UPS.
A much larger contract – covering about 240,000 UPS drivers, package sorters, loaders and others who handle small packages – failed to get a majority vote in favor but was deemed ratified by the Teamsters union after low voter turnout.
However, local supplemental agreements for that larger contract remain to be hammered out. A Chicago local representing more than 10,000 Teamsters UPS workers is demanding better terms, raising the possibility of turmoil later this year if a contract deal is not reached.