UPS Customers Look for Alternatives
United Parcel Service customers--including major catalog companies such as Land’s End Inc. and J.C. Penney Co.--are hurriedly making alternative arrangements to have their products delivered as tonight’s midnight deadline neared for the company’s first nationwide strike.
United Parcel Service of America Inc. and the International Brotherhood of Teamsters failed to reach agreement on a new contract Wednesday, and the impact of a possible strike is already being felt at the nation’s largest ground delivery service. Customers have begun to use alternative carriers, UPS officials said, and that has resulted in a drop in business and in layoffs.
In Orange County, UPS has furloughed nearly 300 of the 2,600 workers it employs in Anaheim and Aliso Viejo, according to UPS spokeswoman Candice Traeger.
“Orange County is a critical area for us,” said Traeger, who added that UPS generated $270 million in revenue in the county last year. “But our customers have definitely begun to shift their delivery business to competitors.”
The Teamsters union represents 185,000 employees at UPS, which includes delivery drivers, inter-city tractor-trailer drivers and package handlers. A strike by these employees could cripple movement of the 12 million packages that UPS delivers daily. The closely held company generated $1.15 billion in profit on $22.4 billion in sales in 1996.
“There are key issues that are outstanding,” said Ken Sternad, a spokesman for UPS, which is based in Atlanta. “We think we’ve made progress in recent days. But it’s impossible to try and guess when [the contract dispute] may be resolved.”
Union officials are seeking more full-time job opportunities for its part-time workers, limits on the use of outside contractors and increases in wages and benefits for members, said Rand Wilson, a spokesman for the Teamsters. For example, a full-time UPS truck driver can make $20 per hour, compared with the average wage of $9.65 per hour that a part-time worker makes, Wilson said.
“We’re still in negotiations with UPS, although we’re very far apart on the major issues,” Wilson said. “It’s a pretty tense atmosphere in negotiations right now.”
UPS contends that in its earlier proposals to the union it has guaranteed that no existing driver would be replaced or eliminated due to outsourcing and that the company will create “thousands” of new jobs and more full-time job opportunities for its existing part-time workers.
However, 57% of the company’s 338,000 employees work part-time because the loading and unloading of packages is done in staggered shifts to accommodate delivery schedules, company spokesman Sternad said.
“Those jobs grow faster than full-time driver jobs,” Sternad said. “The union fails to see that there are millions of people in the U.S. that want part-time work. We have more applicants than we have jobs.”
But just the threat of a strike is hurting UPS. The Independent Pilots Assn., which also is in contract negotiations with UPS, has said its 2,000 members will honor the Teamsters’ pickets if the union should strike.
Land’s End, one of UPS’s largest customers, has been alerting its customers that the possibility exists that delivery of their packages may be delayed, spokeswoman Anna Schryver said. Service representatives are giving customers the option of having their packages shipped using Federal Express or through the U.S. Postal Service. The company mails out 60,000 packages a day.
Federal Express Corp., the U.S. Postal Service and other carriers including Airborne Express, Emery Worldwide and RPS Inc., will try to accommodate UPS customers, but officials said it’s unlikely they will be able to handle all the business.
