"We Changed The Game": UPS, Teamsters Reach Tentative Labor Deal Averting Nationwide Strike 

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by Tyler Durden
Tuesday, Jul 25, 2023 - 05:00 PM

Update (1510ET):

In a statement by the White House, President Biden applauds the Teamsters and UPS for "coming together" and reaching a tentative agreement that will avert a nationwide supply chain shortage.

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UPS and the International Brotherhood of Teamsters, representing approximately 330,000 UPS workers, have reached a tentative collective bargaining agreement, thereby preventing a nationwide strike that could've disrupted supply chains from coast to coast. 

"Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers," Carol Tomé, UPS chief executive officer, wrote in a statement

Tomé continued, "This agreement continues to reward UPS's full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong."

UPS explained the five-year contract covers all Teamsters-represented employees in small-package roles and is subject to voting and ratification by union members. 


"The overwhelmingly lucrative contract raises wages for all workers, creates more full-time jobs, and includes dozens of workplace protections and improvements," the union said. 

Teamsters General Pres. Sean M. O'Brien commented on the win: 

"The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, & we got it.

"UPS has put $30 billion in new money on the table as a direct result of these negotiations."

Shares of UPS trading in New York pumped, then dumped on the announcement. 

As Bruce Wilds concludes, the main takeaway from this story is that inflation is tied directly to wages and labor costs. All businesses large and small will be affected, as usual, small businesses will get hit hardest. This translates into consumers having to pay more and workers demanding higher pay. We know that government workers will never lower their pay and unlike the private sector, it is not held back by an employer's ability to pay. Add government works to those screaming for more money. In short, get ready for higher everything.

Certainly, UPS customers are likely to face higher shipping rates, according to analysts.

"A new Teamsters deal could drive the cost per piece [about] 2 percent higher than current expectations," Bascome Majors, an analyst at Susquehanna International Group, told clients in a note earlier in July, according to Reuters.

A potential supply chain catastrophe has been narrowly avoided with mere days to spare. However, expect to pay more to ship items in the not-to-distant future.