The International Brotherhood of Teamsters has released the full text of its tentative national contract agreement with UPS, which details a variety of changes between the parcel delivery giant and roughly 330,000 of its union-represented employees.
The contract’s changes include increases to employee wages, a reduction in the share of deliveries outsourced to the U.S. Postal Service, more Teamsters influence over new technologies like drones and requirements to transition a facility to seven-day delivery operations.
“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," UPS CEO Carol Tomé said in a statement.
The tentative contract, which local union representatives approved Monday, still requires a majority "yes" vote from members to be ratified. If it's approved, here's a deeper look at what changes will be in store for UPS.
Wage bumps for full-time and part-time workers
Both full-time and part-time employees will see larger general wage increases throughout the duration of this contract versus the previous agreement. From 2023 to 2028, increases will total $7.50 an hour for each employee who has reached seniority status as of Aug. 1.
UPS Teamsters poised for larger annual pay bumps in tentative deal
Part-time worker wages was a major sticking point during negotiations and sparked an extended impasse between UPS and the Teamsters. In the tentative agreement, part-time employees with seniority will see their pay jump to a minimum of $21 an hour if their pay was below that figure after the general wage increase.
Newly hired part-timers will start at $21 an hour, a figure that will increase to $23 after Aug. 1, 2027. In the 2018-2023 contract, newly hired part-time employees start at $15.50 an hour after Aug. 1, 2022.
The tentative contract would also give part-timers "one-time longevity increases" to their wages based on their original hire date, ranging from $0.50 for five years of service to $1.50 for more than 15 years of service.
More SurePost deliveries for UPS drivers
UPS often relies on the U.S. Postal Service to complete deliveries for its SurePost service, which focuses on lightweight residential shipments. The company is slated to lean on the agency less if the new deal is ratified.
UPS will increase the percentage of SurePost packages that are redirected to its own drivers in each year of the contract, based on national average daily volume. On Aug. 1, 2024, that percentage should reach 44%. It will steadily increase each year until it reaches 50% by Aug. 1, 2028.
Under the tentative agreement, UPS will also use technology to identify SurePost-bound packages heavier than 10 pounds or exceeding two cubic feet "so that they are redirected to bargaining unit drivers."
The SurePost changes "will put millions of packages back onto our package cars,” Teamsters General President Sean O’Brien said in June.
Drones, driverless vehicles to be negotiated
The tentative agreement gives the Teamsters more say in the introduction of technology that could impact union jobs.
If UPS wants to implement drones, vehicle platooning or driverless pickup and delivery vehicles, the company must notify the Teamsters' National Negotiating Committee six months in advance of the change. It also "shall be required to bargain the effects of any such change."
If the two sides can't come to an agreement on the use of the technology, the matter will be resolved under the national grievance procedure outlined in the contract.
“Prior to this, there was very loose language, which didn’t give us the ability to sit down and negotiate and the company could just implement,” O’Brien said in June. “We have a resolution process.”
New vehicles to have air conditioning
U.S. small package delivery vehicles purchased after Jan. 1, 2024, will be equipped with in-cab air conditioning systems as UPS adds to its heat safety measures. Fans will also be installed in the cabs of existing package cars no later than 30 days after the contract is ratified.
UPS said in June that it will focus on allocating new vehicles to the hottest parts of the U.S. first. It may also take into account factors such as "state emissions and efficiency standards, existing vehicle retirement schedules, and business growth levels," according to the tentative agreement.
The company will replace at least 28,000 package cars and vans over the lifetime of the agreement, which runs through July 31, 2028.
That's a significant chunk of the roughly 125,000 package cars, vans, tractors and motorcycles in UPS' global ground fleet, according to the company's annual financial report for 2022. However, the agreement says UPS will notify the Teamsters if it can't meet this replacement schedule due to "volume downturns."
UPS commits to more full-time job opportunities
UPS will offer part-time employees the opportunity to fill at least 22,500 permanent, full-time job openings covered by the contract over its duration, versus a minimum of 20,000 in the 2018-2023 contract.
The new commitment includes creating at least 7,500 new full-time roles from existing part-time jobs during the agreement's last three years, versus 5,000 in the previous deal.
The Teamsters represent about 330,000 U.S. employees at the company, ranging from delivery drivers to package handlers. Full-time jobs created in previous agreements will not be reduced, according to the agreement.
The tentative agreement also includes the following changes:
- UPS may transition to seven-day delivery operations at locations currently under five-day or six-day operations. For any planned transition, UPS will notify the Teamsters and affected local unions with specific details and then meet jointly with them to resolve lingering questions.
- If UPS' peak season delivery needs are not met by existing workers, the company can hire seasonal support drivers. These drivers will use their personal vehicles to deliver packages between Nov. 15 and Dec. 26, when volumes are typically higher due to the holiday shopping rush. The Teamsters shall be provided access to these employees to encourage them to join the union.
- The "22.4" combination class of drivers, who make deliveries on a Tuesday-through-Saturday schedule, has been eliminated. Those employees will be reclassified as regular package car drivers but maintain their current schedule, unless enough drivers want a Tuesday-Saturday work week over their current Monday-Friday schedule.
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