Retailers are starting to get anxious about a possible UPS worker strike on Aug. 1. In a statement released Wednesday, the Retail Industry Leaders Association (RILA) shared its dismay with the stalled contract negotiations between UPS and the 340,000 workers represented by the International Brotherhood of Teamsters.
Uncertainty Strikes
“Reliable and quick shipping—ensuring the timely delivery of essential goods such as groceries, medicine and school supplies to customers’ doorsteps—is the hallmark of our industry and the UPS fleet plays a critical role in that operation,” the statement read. “Uncertainty is like kryptonite for supply chains.” A strike would risk disruptions to nearly 40 percent of U.S. courier operations, according to data from Everstream Analytics. While it is easier for retailers today to diversify their carriers compared to when the 1997 UPS strike occurred—which lingered for 15 days and cost the company $850 million—no merchant will be insulated from any potential slowdown.
Although FedEx said it will be accepting additional parcel volume for a limited time ahead of the strike, retailers should be forging relationships with smaller shipping companies alongside the bigger names, according to Charles Haverfield, CEO of U.S. Packaging & Wrapping. RILA also exercised caution about wider impacts to the overall economy, highlighting that while retailers can often be adept at navigating supply chain challenges, a strike would result in “billions of dollars” lost.
Supply Chain Bottlenecks
“The impact of a supply chain disruption is no longer an academic exercise,” the association said. “We need only look in our rear-view mirror to see the economic and consumer harm that resulted from supply chain bottlenecks and delays that rippled throughout the economy post-pandemic. Having worked through these challenges methodically over the past two years, retailers are loath to stress-test contingency plans again.” Haverfield said e-commerce retailers in particular are the most at risk of negative fallout from a potential UPS strike. He noted that these retailers should currently be bulk ordering whenever possible.
The trade association concluded in its statement that it was optimistic a resolution could be reached, while urging all negotiating parties to remain at the table until a deal is struck. Although the two sides have come together on a collection of issues, such as dissolving the “22.4” two-tier wage classification for hybrid workers, ending forced overtime on drivers’ days off and installing air conditioning in the package carrier’s iconic brown delivery vehicles, they are still far apart on wages. The starting UPS part-time wage is now a minimum of $16.20 as mandated for federal contractors. UPS’ offer to raise part-time wages amounts to “crumbs,” according to O’Brien. That offer has not been made public.
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Source: Yahoo
