UPS, Teamsters reach new labor contract agreement: 5 things you should know about the deal

With less than a week before a possible strike, UPS and Teamsters reached a tentative agreement Tuesday on a five-year labor contract.

The agreement avoided what would have been the largest single employer strike in U.S. history and came after the groups resumed talks earlier this week.

Here are five things to know about the agreement and what it means:

What to know about the tentative labor contract

The contract consensus between the union and the company, which UPS CEO Carol Tomé described as a "win-win-win agreement," helped the company and the U.S. economy avoid a potentially crippling blow to the nation’s logistics network.

The tentative agreement features "more than 60 total changes and improvements to the National Master Agreement," Teamsters stated in a release. The union said there were "zero concessions from the rank-and-file."

"Teamster labor moves America. The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it,” International Brotherhood of Teamsters General President Sean M. O’Brien said.

Does the new contract include a pay raise?

Existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, Teamsters shared in a news release.

Existing part-timers will be raised up to no less than $21 per hour immediately. Existing part-time workers will also receive a 48% average total wage increase over the next five years. Part-time seniority workers making more than this new base rate will also see general wage increases.

New part-time employees will start at $21 per hour and move up to $23 hourly.

Teamsters shared that part-time general wage increases will be double what they were in the previous contract. The 2022 general wage increase was $1 according to the previous national contract, under the new tentative agreement, this rate would jump to $2.

Wage bumps for full-time employees will bring the average top rate to $49 hourly.

What else is included in the UPS, Teamsters tentative contract

Teamsters hailed the tentative five-year contract as “overwhelmingly lucrative” and filled with dozens of workplace protections and improvements. Here are some of the highlights for union workers from the new national UPS Teamsters contract:

• Driver classification changes

• Days off and seasonal work

• Heat safety in vehicles

• UPS plans to add more jobs and fill open positions

How did local business, government leaders react to new UPS agreement

After UPS and Teamsters reached a tentative agreement on a new labor contract, many local officials, including Louisville Mayor Craig Greenberg, Kentucky Governor Andy Beshear, and Tim Morris, executive director of the Greater Louisville Central Labor Council, reacted with great applause — noting the win-win for everyone at the logistics company.

"I applaud the company and the union for working to get this agreement done," Beshear said. "It's a win-win for both UPS and Teamsters and means that so many hardworking Kentuckians will have the good wages, benefits and security they deserve."

What's next?

While the sides have settled on terms of a tentative contract, it must now be voted on and ratified by union members.

Representatives from all 176 UPS Teamster locals are set to meet on July 31 to review and recommend the tentative agreement. Locals will also hold meetings with their members to review terms.

Electronic voting for members runs Aug. 3-22.

And while a strike and its disruptive ripple effects have been averted, this negotiation cycle will have a lasting legacy with the company, said Thomas Goldsby, co-faculty director of the Global Supply Chain Institute at the University of Tennessee’s Haslam College of Business.

“(UPS has) made some pretty substantial concessions, and it's either gonna have to be passed along in the form of higher prices to consumers, businesses, or gonna have to be absorbed by UPS,” he told The Courier Journal on Monday. “I'd expect that it's gonna be a little bit of both, in terms of who's gonna have to carry the burden of what they've already agreed to.”

Goldsby said he’ll be interested to see how rates are affected when UPS announces its next general rate increase, which is typically revealed in the fall.

Contact business reporter Olivia Evans at oevans@courier-journal.com or on Twitter at @oliviamevans_. Growth & development reporter Matthew Glowicki can be reached at mglowicki@courier-journal.com, 502-582-4000 or on Twitter @mattglo

This article originally appeared on Memphis Commercial Appeal: UPS, Teamsters contract agreement: What to know about tentative deal