A strike at UPS is becoming increasingly likely, as the two sides remain at odds over pay and benefits for part-time workers.
The Teamsters, the union representing UPS workers, has not made public its specific wage demands for part-timers. However, union members say that they are underpaid, with a starting wage of $16.20 an hour.
Company officials have rejected claims that part-timers are underpaid, noting that part-time employees at UPS make an average of $20 an hour after their first 30 days on the job. They also receive annual raises, the same health benefits as full-time employees and pensions that today are exceedingly rare for private sector workers.
The two sides have agreed on most of the issues, including installing air conditioning in vans and eliminating a lower paid class of workers. However, they remain at odds over pay and benefits for part-time workers.
If a strike does occur, it would have far-reaching implications for the U.S. economy, as well as the country’s labor movement. UPS is the largest package delivery company in the United States, and a strike would disrupt the flow of goods throughout the country.
In 1997, a 15-day strike at UPS cost the company over $600 million in business. The strike also led to UPS losing loyal customers to other shipping companies, such as FedEx.
What to Expect if There Is a Strike
If a strike does occur, it is likely that e-commerce deliveries would be hit first, because UPS handles a large portion of the e-commerce shipping market.
Business shipments, including critical medical supplies, could also be disrupted. And a months-long strike could create backlogs that extend into the upcoming holiday season.
Many large retailers have been preparing contingency plans in case of a strike. These plans include shifting their businesses to FedEx or the U.S. Postal Service.
However, even companies with contingency plans will likely see some impact from a strike, simply due to UPS’s market share in the shipping industry.
What Businesses Can Do to Prepare for a Strike
Businesses that rely on UPS should start preparing for the possibility of a strike now. Here are 10 steps that businesses can take to mitigate the impact of a strike:
1. Assess and manage risks. What are the most critical shipments that need to be delivered during a strike? How will the strike impact your customers? Once you understand the risks, you can start to develop a plan to mitigate them.
2. Diversify shipping partners. If UPS goes on strike, you don’t want to be left without a way to ship your goods. Diversifying your shipping partners will help you avoid this problem.
3. Communicate with customers and suppliers. Let your customers know about the potential for a strike and what it might mean for their shipments. You should also communicate with your suppliers to make sure that they are aware of the situation and that they can continue to deliver the goods that you need.
4. Purchase and stockpile critical inputs ahead of time. If you know that a strike is likely, you can start to purchase and stockpile critical inputs ahead of time. This will help you avoid disruptions in your supply chain.
5. Produce and ship finished goods ahead of time. If you can, you should try to produce and ship finished goods ahead of time to get in front of the initial bottleneck created by a strike.
6. Improve inventory management and visibility processes. Having good inventory management and visibility processes will help you track your inventory levels and make sure that you have the right amount of inventory on hand to meet customer demand during a strike. Now, is the time to assess critical shortages.
7. Seek local sources of supply. If possible, consider finding local sources of supply. This could help you reduce your reliance on UPS and other shipping companies during a strike.
8. Update cash flow forecast and strengthen cash flow management process. A strike could disrupt your cash flow, so it’s important to update your cash flow forecast to help mitigate running out of money during a strike.
9. Communicate with bank. While banks are likely aware of the news, they may not realize the extent to which a strike could impact your company. Help them understand your situation and provide you with the necessary financial support.
10. Review business interruption/income insurance policy. Make sure that your business insurance is up to date and that it covers the risks associated with a strike.
By following these recommendations, businesses may be able to mitigate the effects of a UPS strike, ensuring continuity, customer satisfaction, and financial stability during these challenging times.
Author: Richard Turner
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