How a UPS Strike Would Impact E-Commerce & Manufacturing Companies

UPS, the world’s largest courier/package delivery company, is on the brink of a strike that could lead to massive supply chain disruptions and adversely affect manufacturing companies across the globe.

Though negotiations are still underway and a potential strike is still six weeks away, taking steps now to mitigate its impacts is a good idea.

Why Do UPS Workers Want to Strike?

UPS workers on June16 authorized their union, the International Brotherhood of Teamsters, to go on strike August 1 — one day after their current contract expires — if negotiations end without an agreement before then. Some 350,000 UPS employees are unionized, a figure that represents more than half their North American workforce.

Key issues revolve around a two-tiered employee hierarchy with separate pay scales, hours, and benefits; excessive overtime; and driver safety — particularly the lack of air-conditioning in virtually the company’s entire fleet of 95,000 delivery trucks and vans. This has led to more than 100 hospitalizations for heat-related illnesses.

UPS tentatively agreed to add air-conditioning to its vehicles for the first time last week, but that didn’t stop 97% of unionized workers from authorizing a summer strike, which would rank as the largest single-employer strike in U.S. history.

What's at Stake

This isn’t the first time UPS workers have gone on strike, but a lot has changed since the last work stoppage in 1997. That strike, which lasted 15 days and involved 185,000 employees, occurred long before the rise of E-Commerce. It cost the company $600 million in revenue but led to better working conditions for employees. Today, UPS deliveries account for roughly 6% of the U.S. gross domestic product. A strike would be devastating for the economy, already reeling from inflation.

If a UPS strike occurs, consumer deliveries — particularly E-Commerce orders — would immediately be affected. FedEx and the U.S. Postal Service simply don’t have the capacity to handle that type of volume and make up the difference.

Even worse, some economists fear supply chain collapses as manufacturers would be unable to fulfill orders for key industries like the automotive sector. And with the holiday shopping season not too far off, retailers would suffer, too.

How Can I Prepare for a Potential UPS Strike?

While a strike isn’t imminent, there’s no guarantee that UPS’ decision to roll out air-conditioning is enough to prevent one from happening. There are too many other demands on the table to comfortably take a wait-and-see approach.

Manufacturers can prepare for a potential UPS strike by reviewing their business needs now and planning for the worst. We recommend the following steps:

• Review your shipping schedule. Focus on your shipping schedule for August and beyond to determine which deliveries have the highest priority. This can help you make adjustments to your production schedule if necessary.

• Consider alternative shipping options. UPS may be the dominant courier, but they aren’t your only shipping option. Research other carriers now to compare prices and delivery times.

• Renegotiate contracts. With UPS wanting to avoid a loss of business, they may be more willing to renegotiate contracts and reduce pricing. At the very least, this could help mitigate the financial impact of a strike on your business.

• Communicate with customers. Shipping delays ultimately lead to unhappy customers. E-Commerce providers should be proactive and communicate with customers about any potential service disruptions. Be as transparent as possible, providing realistic delivery estimates…and step up your customer service efforts to maintain customer satisfaction and loyalty.

• Hope for the best, prepare for the worst. Planning is key. Stockpile as many supplies as possible and make contingency plans for a worst-case scenario.

Remember, a UPS strike would impact G10, too. As your trusted logistics provider, we’re here to help you in any way we can. Don’t hesitate to reach out to us!