UPS Reaches Agreement With Pilots on Long-Term Contract

United Parcel Service of America and the Independent Pilots Assn. tentatively agreed on a new contract Monday after two years of negotiations.

Details of the deal between the nation’s largest package delivery carrier and its 2,100 pilots were being withheld until a joint news conference today. But a source close to the talks said the contract would last through January 2004. UPS had sought the relatively long term to strengthen its hand in foreign markets. The agreement still must be ratified by members of the union.

The talks, which broke for the holidays, had resumed on a positive note Wednesday under the guidance of the National Mediation Board. Quick agreement was reached on scheduling rules, a drug and alcohol policy and outstanding grievances filed by the pilots during the Teamsters’ strike last year. The pilots’ support of that 15-day strike enhanced their negotiating position. As the talks continued over the weekend, negotiators had to settle some tough compensation issues.

UPS boasts that it operates the world’s ninth-largest airline, and the pilots who fly its 214 planes had been insisting on a best-in-the-industry contract. But at the outset of the latest round of talks, IPA President Bob Miller said the union would accept as a benchmark the deal that rival package carrier Federal Express Corp. offered its pilots late last year.

UPS had argued that its pilots’ demands could weaken its ability to compete with FedEx, the nation’s second-largest package delivery carrier. But Miller said a tentative agreement FedEx struck with its pilots in December looked pretty good to his members. UPS had argued that it was difficult to compare the packages, because FedEx pays its pilots a two-tiered wage scale, with pilots of larger planes paid more, while all UPS pilots are paid the same rate.