Michigan-based Anderson Economic Group estimated that a 10-day strike would have cost the US economy over $7 billion, with $4 billion in losses coming from UPS customers and small businesses and $1.1 billion in lost wages from striking employees.

Let’s take a moment to celebrate the good news, and then we’ll dig into what the new deal entails and how the nation avoided the crisis of a strike.

Crisis averted with less than a week to go

The contracts of Teamsters-represented UPS workers were set to expire at midnight on July 31. Without a deal, around 340,000 UPS employees represented by the union were prepared to strike come August 1. Despite walking away from negotiations on July 5, both sides returned to the table on July 25 to reach a deal that UPS CEO Carol Tomé called “a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers.”

A strike isn’t off the table forever, though. This new deal will last for five years, when we may see these negotiations play out again.

What’s so special about this labor deal?

Teamsters President Sean O’Brien revealed that this agreement would cost UPS $30 billion over the 5-year course of the contract, including:

• Raises of $2.75 per hour for full and part-time Teamsters employees in 2023 and $ 7.50 more per hour over the contract
• The end of the 2-tier wage system
• Vehicle air conditioning and cargo ventilation
• Martin Luther King Day as a full holiday
• The end of forced overtime
• More opportunities for part-timers to move into full-time work
• And many more, with 60 total improvements

Despite zero concessions from the rank-and-file, Tomé said, “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.”

What happens now?

While this agreement is only tentative at this stage, Teamsters representatives will meet on July 31 to review the deal and recommend its acceptance. Then, Teamsters members will have from August 3 to 22 to vote on the new agreement.

If all goes to plan, you won’t see any disruptions in your service. However, the $30 billion in additional expenditures have to come from somewhere. Don’t let UPS’s expenses come out of your pocket.

With rising costs on the horizon, now is a great time to assess your existing contract to discover areas where you may be paying too much. ShipRx will review your agreement for free and tell you how you can save. We usually help our clients cut costs by 20-30%, so get started today and begin saving before the new Teamsters agreement goes into effect.

Mike Partner