UPS reaches contract with 340,000 unionized workers, averting potentially calamitous strike

UPS has reached a contract agreement with its 340,000-person strong union Tuesday, averting a strike that had the potential to disrupt logistics nationwide for businesses and households alike.

The Teamsters called the tentative agreement “historic” and “overwhelmingly lucrative.” It includes, among other benefits, higher wages and air conditioning in delivery trucks.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” Carol Tomé, UPS chief executive officer, said in a prepared statement. “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.”

The company said the five-year agreement covers U.S. Teamsters-represented employees in small-package roles and is subject to voting and ratification by union members.

Members of the Teamsters, angered by a contract they say was forced on them five years ago by union leadership, clashed with UPS over pay as profits for the delivery company soared in recent years. Union leadership was upended last year with the election of Sean O’Brien, a vocal critic of the union president who signed off on that contract, James Hoffa, the son of the famous Teamsters firebrand.

The two sides reached a tentative agreement early on safety issues, including equipping more trucks with air conditioning equipment. Under the agreement, UPS said it would add air conditioning to U.S. small delivery vehicles purchased after January 1, 2024.

But a two-tier wage system remained a sticking point. The Teamsters called it “unfair,” and that is ended under the new agreement.

Profits at UPS have grown more than 140% since the last contract was signed as the arrival of a deadly pandemic drastically transformed the manner in which households get what they need.

Unionized workers argued that were the ones shouldering growth at the Atlanta company and appeared dead set on righting what they saw as a bad contract.

Member voting begins Aug. 3 and concludes Aug. 22.

UPS has the largest private-sector contract with workers in North America and the last breakdown in labor talks a quarter century ago led to a 15-day walkout by 185,000 workers that crippled the company.

By Haleluya Hadero. Matt Ott reported from Washington, D.C., Haleluya Hadero reported from New York City.