Ratification of the richest labor contract in the history of United Parcel Service by the its Teamster Union could trigger a hefty rate increase next year for the catalogers and other direct marketers that use the Atlanta-based shipper for customer orders.
The contract, ratified by a 71.2% to 27.9% margin by 90,000 of UPS’s 210,000 workers this week, is retroactive to Aug. 1. It calls for a 22% pay hike over the next six years, the creation of 10,000 new jobs and the conversion of another contracted 10,000 positions.
With the contract estimated to cost the shipper about $9 billion over the next six years, there are strong indications that direct marketers using UPS to ship orders will be facing a hefty increase in their rates early next year.
Sources said that rates go up by as much as 7%, or double this year’s increase of 3.5%, which was 0.04% more than the year before.
Officials at UPS would only say that it’s too early to talk about a possible rate increase next year and how much it might be.
Mike Eskew, chairman/CEO, said in a statement that ratification of the tentative contract reached on July 16 reflected the recognition by UPS workers that the contract was “a fair and balanced agreement that rewards them for their hard work while allowing the company to remain competitive.”
The contract resulted from six months of talks leading to a tentative agreement on July 16, just 16 days before the current five-year contract was to expire. That tentative agreement averted the possibility of the two-week strike in 1997 that cost UPS $750 million being repeated.
In a separate statement, Teamsters Union president Jim Hoffa called the contract “a milestone for all of labor [because] it sets the tone for [contract] negotiations for years to come.”
Network
