Early Contract Negotiations At UPS

UPS wasn’t offering any comments on the announcement that it had reached an agreement with the International Brotherhood of Teamsters (IBT) to allow a “card check” at UPS Freight (formerly Overnite Transportation). The union had vowed it would organize the less-than-truckload (LTL) operator following its acquisition by UPS.

Overnite Transportation had been the subject of a bitter organization effort by the Teamsters prior to its acquisition by UPS. The two sides had been in and out of court trading accusations for three years when Overnite finally overcame the union effort. The company was spun off from its former parent Union Pacific Corp. and launched a successful initial public stock offering. Its star was on the rise relative to growth and profits when UPS suddenly acquired the company and integrated it into its operation as UPS Freight.

At the time of the acquisition, the IBT was splitting from the AFL-CIO and said it would focus on organizing Overnite (among other promises to members).

"UPS knew that the entire leadership of the union was meeting [at its annual convention] in Las Vegas," said Ken Hall, Director of the Teamsters Parcel and Small Package Division. "They knew that we would either ramp up our campaign or they could come up with an agreement such as this that the union has been seeking.” The IBT said it would attempt to organize one group, negotiate a strong contract, and then “build on such a victory to organize other terminals.”

It is the contract that will interest most shippers. The UPS-IBT contract is up for negotiation in 2008 (as is the National Master Freight Agreement with the LTL carriers). UPS reportedly acceded to an IBT demand for early negotiations. Overnite, which was a separate, non-union carrier benefited from two work stoppages by the IBT during contract talks. One was with the LTL industry and the other against UPS. Since that time, many of the unionized LTL carriers have either merged, been acquired, or ceased operations. On the parcel side, Roadway Package System, a primary competitor of UPS, was acquired by FedEx. DHL, which was a minor player in the U.S. at that time, has expanded dramatically through the acquisition of Airborne Express. And BAX Global was recently acquired by Deutsche Bahn.

FedEx’s labor agreements fall under railway labor rules. FedEx’s LTL operations are non-union.

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