UPS Labor Deadline Looms

As a July 31 deadline approaches, negotiators for the Teamsters union and United Parcel Service Inc. remain far apart on economic issues, causing some nervous customers to start using other carriers.

Atlanta-based UPS disclosed Wednesday that package volume in June was down about 4% from the previous year, and blamed at least half the drop on diversions to other shippers. UPS spokesman Norman Black also cited the softer economy.

“Customers are getting anxious,” Black said. “They had hoped we would have settled this by now.”

The current five-year contract expires at the end of the month, and union employees voted overwhelmingly to authorize a strike if negotiators reach an impasse. A 15-day strike in 1997 crippled U.S. commerce and at least temporarily boosted the clout of organized labor. At this point, however, both sides say they hope to avoid a disruption of service. The contract covers about 210,000 employees, by far the largest single group of workers represented by the 1.4-million-member International Brotherhood of Teamsters.

Negotiators are meeting daily in Washington on a master agreement, and have settled the majority of 32 supplemental agreements that tailor work rules to specific regions, Black said.

Teamsters spokesman Bret Caldwell said talks have bogged down on major economic questions, including health care and pension costs. With health-care costs soaring and the stock market crashing, UPS has sought to pass along some expenses to employees. Caldwell said there is a “wide gap” between UPS and the union on benefits. The union also wants wage increases and thousands of part-time jobs converted to full-time.

UPS shares rose $2.51 to close at $63.25 on the Big Board.