Package-delivery giant United Parcel Service Inc. and the Teamsters union on Tuesday said they had reached a tentative five-year labor agreement that would boost jobs, pay and other protections, after increasingly vocal threats of a strike reignited concerns about the impact to the economy and the nation’s shipping ecosystem.
Teamster locals in the U.S. and Puerto Rico will now meet on July 31 to review and recommend the tentative deal, which will cover 340,000 workers, the Teamsters said in a release. Rank-and-file members will vote on the deal starting on Aug. 3, with the voting process running until Aug. 22.
Under the deal’s terms, current full and part-time UPS
UPS,
workers in the Teamsters union will get $2.75 more per hour this year, and $7.50 more over the course of the contract, according to a release.
Current part-timers would have their pay raised to at least $21 per hour immediately, with a 48% average total wage hike over the next five years. New part-time hires would start at $21 per hour and advance to $23 per hour, the Teamsters said.
Full-time UPS delivery drivers in the Teamsters union would see their average top pay rate rise to $49 per hour.
The deal also ends a two-tier wage system at UPS and makes Martin Luther King Day a holiday for union members. UPS will also outfit newer delivery vehicles with air conditioning and cargo ventilation. The deal also ends forced overtime on union members’ days off.
Shares of UPS were up 0.8% in afternoon trade. Shares of rival FedEx Corp.
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were up 0.5%.
Talks between UPS and the union began in April. Some Wall Street analysts expected both sides to reach a deal, despite a more hardline stance from Teamster leadership.
“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits,” Teamsters General President Sean O’Brien said in a statement.
“Teamster labor moves America,” he continued. “The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it. UPS has put $30 billion in new money on the table as a direct result of these negotiations.”
UPS Chief Executive Carol Tome, in a separate statement, also praised the deal.
“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,” she said.
