Update: On July 25th, UPS avoided a workers' strike by reaching a labor deal with the Teamsters Union.
Negotiations between UPS and Teamsters-represented workers have stalled, with both sides accusing each other of abandoning talks. If the current contract expires on July 31st without a new agreement, a strike involving 340,000 unionized UPS workers is highly likely. This potential 10-day strike is projected to be one of the costliest in a century, with estimated losses of $4 billion for UPS customers, according to the Anderson Economic Group. The last UPS Teamsters strike occurred in 1997 and had significant economic consequences. Since then, package shipment volume has surged, with an average of 59 million daily packages sent in the US in 2021. With a 24% market share, a walkout by UPS workers could cause substantial delays affecting millions of shipments. Competitors like FedEx are urging UPS customers to switch, but experts doubt their capacity to handle the resulting backlog. Although UPS has started training its nonunion workforce (around 100,000 employees in the US) to manage operations during a strike, it remains inadequate for handling UPS's entire volume.
A strike will cause significant disruptions for businesses relying on UPS for inbound shipping and order fulfillment. While there is some indication that consumers are becoming less fixated on fast shipping and prioritizing factors like Free Shipping and Easy/Free Returns, it's important to note that nearly all customers (91%) still expect their orders to arrive within 7 days. Furthermore, 70% of customers expressed discontent if their orders failed to arrive on time. In situations of fulfillment disruptions, effective communication is crucial.