UPS is facing its largest labor strike in decades - as over 90% of the shipping company's union members have voted to stop working if a deal can't be reached on the Teamsters' current labor contract which expires on August 1, according to CBS News.
The tally released by the International Brotherhood of Teamsters Tuesday night had 93 percent of UPS members endorsing the authorization and 91 percent of UPS freight employees backing the measure. A national pact with the union covers about 260,000 UPS workers, and the current contract expires July 31. -CBS
At issue is how employees will be compensated under a rumored plan to deliver packages seven days a week. UPS began delivering on Saturdays last year to keep up with demand. The company is now proposing a two-tier wage structure that would shift part-time workers making $15/hour to full-time at the same wage. Drivers currently make an average of $36 an hour, or around $75,000 per year.
With UPS's roughly 19 million shipments per day accounting for roughly 6% of the nation's GDP, a labor dispute could disrupt the US economy. The company transports around 36% of deliveries between the top three logistics providers, while the U.S. Postal Service stands at 35% and FedEx comes in third at 17%.
The vote "gives the negotiating committees bargaining leverage this week and during subsequent negotiations for the national contract and the supplements," said Teamsters director and co-chairman of the bargaining committee, Denis Taylor.
That said, the Teamsters are deeply divided on the proposal, making a deal more difficult to reach and a strike more likely.
An opposition group within the union, UPS Teamsters United, argues that the delivery company, which posted a $5 billion profit in 2017, should pay new full time workers the same as existing workers. -CNN
"Most people understand in the world of Amazon (AMZN) and e-commerce, UPS isn't going to be Monday to Friday or even Monday to Saturday any more, it's going to be a seven-day operation," said David Levin, spokesman for UPS Teamsters United. "But they made record profits. They don't need concessions to do that."
While there is still plenty of time for the Teamsters and UPS to reach an agreement before August 1, the faction opposed to the deal may convince rank-and-file members to reject the proposal and move forward with the strike.
"UPS is confident in our ability to reach an agreement," a company spokesperson told CBS News in an email. "Strike authorization votes do not mean a strike is imminent. The reality is that UPS and the Teamsters have already reached tentative agreements, subject to ratification, on a wide variety of non-economic issues."