Where are the talks and what to expect

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Negotiators for UPS and the Teamsters union, who represent some 340,000 workers at the nation’s largest package carrier, will return to the table Tuesday, seeking to finalize a labor agreement by the end of the month.

If the parties fail to reach a tentative contract agreement in time, UPS workers have agreed to leave work at 12:01 a.m. ET on August 1, risking widespread delivery disruptions across the country.

Here’s a look at the current state of the matchup and what to expect in the days to come.

How close are the two parties to reaching an agreement?

Most of the elements for a new five-year contract are already in place, negotiators said.

UPS last month agreed to a range of new heat safety protections, including adding air conditioning to its iconic brown delivery fleet for the first time. The Teamsters hailed those changes as a breakthrough after years of complaints that working in hot climates has become more dangerous, with climate change causing record summer heatwaves across the country.

“Ninety-five percent of the contract, the non-financial issues, are done,” Teamsters president Sean O’Brien. told MSNBC on Sunday.

Some important economic issues have also been resolved. the truckers announced in early july that they had secured an end to an unpopular two-tier workforce system long criticized for ripping off weekend drivers, as well as reducing forced overtime on scheduled days off.

What issues remain unresolved?

Pay for part-time UPS workers has been one of the main remaining sticking points. Last Thursday, when the two sides announced they would resume talks, UPS said it was «prepared to increase our industry-leading wages and benefits.»

Part-time union workers already earn an average of $20 an hour and get “exactly the same industry-leading health and medical benefits as full-time employees,” the company said in a statement earlier this month, adding that they “are among just 7% of US private sector employees who receive a pension.”

The rise of e-commerce, accelerated by the pandemic, has reshaped the demands of UPS workers since 2018, when its last collective agreement was approved. Now they are sorting and delivering millions more packages: 6.2 billion worldwide in 2022, up from 5.5 billion in 2019. Teamsters leaders have argued that UPS should use the $13 billion it generated in profit last year to improve wages and working conditions.

What happens if there is no agreement before August 1?

If an agreement cannot be reached in time, UPS workers have vowed to walk off the job, in what would be the largest single-employer strike in US history. While any tentative pact would still need to be ratified through a rank-and-file vote to take effect, a handshake deal would likely prevent a strike.

Some labor experts say the union has the ability to extend its existing contract beyond its July 31 expiration date at its own discretion. Doing so could create more time to vote if an agreement is reached in the last days of July or even later.

But the union seems to rule out that possibility, constantly stressing its August 1 deadline. A Teamsters spokesperson told NBC News earlier this month: «Extensions and concessions were granted by the previous Teamsters administration, but those days are over and UPS must face this reality.»

What would be the impact of a strike?

The Anderson Economic Group recent forecast than a 10-day strike it cost the US economy some $7 billion, with workers racking up $1.1 billion in lost wages and UPS seeing $816 million in losses.

While much would depend on how long it lasts, a UPS strike would surely be less costly and disruptive than the freight train strike that was averted last September after the Biden administration negotiated a labor pact. A rail industry group had estimated at the time that a work stoppage on the country’s freight rail network would cost the economy up to $2 billion a day. The Teamsters have urged the White House not to intervene in their current standoff.

Logistics experts warn that even a few days of disruption to UPS deliveries would lead to widespread outages. A strike would likely delay the flow of more packages than major rivals like FedEx or the US Postal Service could absorb, threatening to upend the back-to-school shopping season. For its part, UPS said on July 14 that it was in the process of training non-union drivers to help take over in the event of a Teamsters strike.

The carrier handles about a quarter of US package shipments worldwide, UPS estimates that it delivers more than 24.3 million packages a day, transporting items from some 1.6 million shipping customers to more than 11.1 million recipients. The company estimates that 85% of Americans lives within 10 miles of a UPS store.

Major retailers have had plenty of time to prepare for a strike, with backup plans months in the making, industry insiders say. Many companies have diversified their delivery providers during the pandemic, adding smaller and regional carriers. But smaller businesses, particularly those in rural areas, have few alternatives to UPS. In recent weeks, some have simply been watching the intermittent labor talks and hoping for the best.

The last UPS strike, which involved some 185,000 workers in 1997, lasted 15 days and cost UPS at least $600 million. The union focused its demands on securing better wages and job security and resulted in gains for employees on both fronts.

Adiel Kaplan contributed.

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