Strike averted, UPS Freight restarts LTL freight shipping

Strike averted, UPS Freight restarts LTL freight shipping

 

UPS Freight.

UPS Freight resumed pickups and began accepting freight shortly after Teamsters employees approved a second and 'last, best, final' contract proposal Sunday. Photo credit: UPS Freight.

Teamsters employees at UPS Freight approved a new, five-year contract, averting a potential strike that would have hit shippers just as the pre-holiday peak shipping season gathers steam. The vote means the 11,600 Teamsters at UPS Freight will head back to work at a less-than-truckload (LTL) network that was shut down last week and resume hauling freight.

UPS Freight already is contacting customers and accepting new volume, the trucking arm of UPS said Sunday night. That will be a relief to shippers who were forced to scramble to find alternatives, mostly higher-priced, to UPS Freight last week when the fifth-largest LTL carrier by revenue began refusing to accept freight, with last Wednesday being the last day for next-day pickups.

In the third quarter, UPS Freight handled 41,300 shipments a day on average, slightly more than fourth-ranked YRC Freight but less than Old Dominion Freight Line (ODFL), XPO Logistics, and FedEx Freight, the other top five LTL carriers by revenue. Still, 206,500 LTL shipments a week is a large number to be absorbed by a trucking market running close to full capacity.

Status of shipments at terminals 

The company’s terminals were cleared of shipments by the weekend as Teamsters went to local union halls to vote on a second contract proposal that UPS Freight called its “last, best, final” offer. Major issues for UPS Freight Teamsters included the use of nonunion subcontractors, wage increases, and a two-tier pay scale for new and existing employees.

A strike by UPS Freight Teamsters would have been unprecedented and the first major LTL strike since 1994. UPS Freight’s move to empty its network in advance of a second union vote and potential strike also was unprecedented, and aimed, the company said, at preventing customers’ freight from being stranded or “held hostage” during a labor disruption.

But with 77 percent of the rank-and-file voting to approve the second contract, UPS Freight bypassed that scenario. The vote was 6,935 in favor and 2,067 opposed, with 84 percent of eligible members voting, according to the Teamsters union. In October, the same workers rejected the carrier’s first contract proposal in a 4,255-to-2,601 vote on Oct. 5.

“We are pleased that the UPS Freight agreement has been ratified,” parent company UPS said in a statement. “It is an agreement that rewards our employees for their contributions to the success of the company, while enabling UPS to remain competitive. We will resume normal operations and will immediately begin accepting new volume from UPS Freight customers.”

UPS Freight drivers are back to work, but a significant number of them will remain unhappy with the election outcome, the company's tactics, and what they saw as a lack of support from Teamsters leadership. That disatisfaction could resurface to have an impact on the next Teamster general election in 2021.

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy.