UPS and Teamsters Reach Tentative Agreement on Contract

Union membership still needs to ratify the contract to avert a strike.

UPS driver unloads a truck.
(Image credit: Getty Images)

The United Parcel Service (UPS) and the International Brotherhood of Teamsters announced a tentative five-year agreement Tuesday, averting a strike for now that could have caused a major disruption of delivery services.

Negotiations between the delivery service - which counts Amazon as a major customer - and its union members broke down on July 5 over issues including wages and benefits for part-time employees. Late last week, the two parties said they would resume talks this week and hoped to reach an agreement before the current contract expires on Aug. 1.

The tentative agreement, which covers roughly 340,000 UPS union members, is subject to voting and ratification by the members, who are slated to meet on July 31 to review and recommend the deal, the Teamsters said in a statement. Member voting begins Aug. 3 and ends on Aug. 22.

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While the tentative agreement is a major step, it still must be ratified by the union. Some observers say they are cautiously optimistic given the recent failure of talks between rival FedEx and the FedEx Air Line Pilots Association (APLA) .

FedEx pilots rejected a tentative contract with the carrier yesterday by a vote of 57% to 43%. Captain Chris Norman, chair of FedEx APLA, said in a statement that members would regroup, prepare for the next steps and establish a timeline for assessing pilot group priorities. The National Mediation Board is expected to convene a status conference with both parties but there is no timeline for this to occur, Norman added.

FedEx said in a statement that it is disappointed. “While we are disappointed in these voting results, FedEx will continue to bargain in good faith with our pilots to achieve an agreement that is fair for all FedEx stakeholders,” the company said.

Wage hikes part of UPS-Teamsters' deal

The tentative UPS-Teamsters' contracts includes wage increases for all workers, creates more full-time jobs and provides dozens of workplace protections and improvements, the Teamsters said.

“We demanded the best contract in the history of UPS, and we got it,” said Teamsters General President Sean M. O’Brien. “UPS has put $30 billion in new money on the table as a direct result of these negotiations.”

The agreement covers Teamsters union employees in small-package roles and is subject to voting and ratification by union members, UPS said in a statement.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” said Carol Tomé, UPS chief executive in a statement. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

Senior News Editor

Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.