What the Potential UPS Strike Means for the Supply Chain

UPS workers are threatening to strike at the end of this month, and the effect on the supply chain could be devastating. Experts are calling it "one of the costliest [strikes] in at least a century." It could result in a $7 billion loss for a 10-day work stoppage.

UPS customers could lose $4 billion, and lost direct wages could exceed $1 billion. In 1997, a 15-day strike at UPS disrupted supply, cost the company $850 million, and led some customers to switch to competitors like FedEx.

A quarter of U.S. parcel deliveries are handled by UPS's unionized workers, who serve virtually every city and town.  If this group of 340,000 strikes, it could delay millions of daily deliveries, including lifesaving prescription drugs that treat cancer and other illnesses. It also could reignite supply-chain issues that affect inflation. It will only take a few days for consumers to feel the effects of this strike.

Talks between UPS and the International Brotherhood of Teamsters union are deadlocked, and the union has threatened to strike if a deal cannot be reached before the current contract expires. That gives them until July 31 to come to an agreement on new terms.

One of the major points of contention in the negotiations is pay increases for part-time workers. These employees account for roughly half of the UPS workforce. The tight job market has increased starting pay, which frustrates tenured part-timers who are now only making slightly more than new hires despite years with the company.

Union officials say UPS needs to sweeten its offer for employees who risked their lives to help UPS generate outsized profits during the pandemic. The company faces two unappealing options: risk a strike, resulting in losses for customers or relent to Teamster demands, which could worsen the company's labor cost disadvantage against nonunion rivals.

The country will be watching closely to see if teamsters and UPS can come to an agreement before the strike deadline.

If you need an alternative shipping option in the event of a strike, River Horse and our family of transportation brands may be able to help. Contact us today to learn more about our port-to-door logistics network.