Small business supply chains at risk as UPS union threatens strike

UPS union workers have overwhelmingly voted in favor of a strike if ongoing contract negotiations with executives fail to produce a deal by a July 31 deadline, potentially creating a new supply chain crisis that would put thousands of American businesses at risk.

The Teamsters UPS union represents more than 50% of the company’s staff, while its contract with the delivery service is considered to be the largest of its kind in the U.S. Although talks between representatives and company leaders have resulted in some agreements, one of which guarantees air conditioning units in vehicles, neither party has been willing to budge on the topics of part-time pay and cost-of-living adjustments. Of the 340,000 union workers, 97% have already voted to strike if terms are not reached before August.

While discussions between union and company leaders have been underway for some time, matters escalated when both sides accused the other of walking away from negotiations in June, drastically increasing the likelihood of missing the July 31 deadline. Sean O’Brien, president of the Teamsters union, has stated the organization is looking to secure a “livable starting wage” for part-time staff, compared to their current minimum rate of $16.20, which he described as “poverty wages.” Meanwhile, UPS has claimed it already offers industry-leading pay for its workforce. According to the Associated Press, no progress has been made on a deal in more than a week.

While it is uncertain if a strike will occur, the risks posed to small businesses are immense. According to UPS, its team delivers 24.3 million packages a day, substantially more than FedEx and the USPS. The company has confirmed it will bring in additional non-union employees should matters escalate, but it is unclear whether the move will sustain operations in the event of a strike. Alternative services also pose issues for UPS customers due to differences in cost and coverage. An internal memo from FedEx obtained by NPR notes: “In the event of a market disruption, no carrier can absorb all UPS volume.” Consulting agency Anderson Economic Group estimates that a 10-day strike by union workers would come with a $7 billion price tag for the U.S. economy.

Intervention from government officials remains a possibility, although the UPS union is seemingly attempting to forestall such an incursion. On Sunday, July 16, O’Brien asked the Biden Administration to stay out of the conflict should the UPS union go through with the strike. “My neighborhood where I grew up in Boston, if two people had a disagreement and you had nothing to do with it – you just kept walking,” he told workers. “We don’t need anybody getting involved in this fight.”