Rank-and-file UPS workers say 'yes' to new labor deal

Alexis Keenan

Rank-and-file members of the International Brotherhood of Teamsters voted yes to a new five-year collective bargaining agreement that will lift wages for United Parcel Service (UPS) delivery and warehouse workers.

The agreement, reached in July, averted the largest single strike against a company in US history and an estimated $7 billion hit to the US economy. The deal covers more than 300,000 employees.

The union's prior contract with the delivery giant expired Aug. 1, and the Teamsters had threatened that drivers would walk off the job without a deal.

FILE - A UPS driver puts his seat belt on before driving off as UPS workers hold a rally in downtown Los Angeles as a national strike deadline nears on Wednesday, July 19, 2023. UPS has reached a contract agreement with its 340,000-person strong union Tuesday, July 25, 2023, averting a strike that had the potential to disrupt logistics nationwide for businesses and households alike. (AP Photo/Damian Dovarganes, File)
Rank-and-file UPS workers voted overwhelmingly for the new labor agreement, according to the company and union officials. (Damian Dovarganes/AP Photo, File) (ASSOCIATED PRESS)

The Teamsters said in a statement Tuesday that 86% of workers voted in favor of the deal and called it the "most lucrative agreement the Teamsters have ever negotiated" at the company.

UPS said in its own statement that its Teamsters-represented employees voted "overwhelmingly" to ratify the new agreement.

There is still one last hurdle, however. One of 44 supplemental agreements was not ratified, covering 174 workers in Florida. The Teamsters said the national master agreement will go into effect "as soon as this supplement is renegotiated and ratified."

Union officials have valued the new contract at $30 billion. They have also warned that they now plan to go after other companies in the shipping world, specifically Amazon (AMZN).

"Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry," said Teamsters general president Sean O’Brien. "This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention."

Sean M. O'Brien, Teamsters General President, talks with UPS teamsters and workers before a rally Friday, July 21, 2023, in Atlanta, as a national strike deadline nears. The Teamsters said Friday that they will resume contract negotiations with UPS, marking an end to a stalemate that began two weeks ago when both sides walked away from talks while blaming each other. (AP Photo/Brynn Anderson)
Sean O'Brien, head of the International Brotherhood of Teamsters, has made it clear he is going after Amazon now that the UPS deal is done. (Brynn Anderson/AP Photo) (ASSOCIATED PRESS)

Veteran full-time drivers at UPS will make $49 per hour by the end of the contract. UPS CEO Carol Tomé told analysts earlier this month that total compensation for those workers will be roughly $170,000 per year. Part-time drivers will make a starting salary of $21 per hour.

Tomé told analysts the new contract was a "win-win" for both parties. She also said the company's drawn-out negotiations with the union caused it to lose customers, some of which have returned.

The company reported a sharp drop in revenue and profit during the second quarter and pared its annual revenue outlook and operating margin, citing the costs associated with the new labor agreement.

"One thing that was very important for Teamster leadership was to front-load some of the wage inflation and we agreed to do that," Tomé said earlier this month. "So that does put a little pressure on the margin. ... We'll have a bit of pressure for the next year, through August of next year, but then the inflation is very manageable."

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