UPS package handlers said retirements and low starting pay are causing lots of turnover at the logistics giant’s Worldport in Louisville.
A local Teamsters leader told Insider that the $10-per-hour starting wage for part-time UPS package handlers and the resulting turnover at the facility also are causing lots of stress for full-time workers.
The union wants the logistics giant to raise the starting pay to $15 per hour.
The current five-year contract that governs about 250,000 UPS workers nationwide, including about 8,000 at Worldport in Louisville, expires July 31. Union members overwhelmingly voted this week to authorize their negotiating committee to call for a strike.
However, both union and company officials emphasized that the vote does not mean a strike will begin on Aug. 1. The union hopes the vote puts more pressure on the company to accede to the workers’ demands. If the parties have failed to reach new agreement by Aug. 1, but believe they are making progress, they can agree to extend the current contract.
“We always hope that it doesn’t come to a strike. It’s a very, very serious business,” Stephen Piercey, communications director for Teamsters Local 89, told Insider Thursday.
Local 89 represents about 10,000 workers, including about 8,000 at Worldport. The local workers are mostly package handlers who remove packages from conveyors, place them in large containers, and move the containers on the planes, and vice versa.
Piercey said that negotiations are difficult primarily because of the concerns about starting pay for part-time workers and the company’s plans to eventually operate seven days a week.
Piercey said that most package handlers start as part-time workers, who earn $10 per hour, which is not enough in the current tight labor market to attract and retain employees.
Turnover among package handlers and UPS drivers is high generally because of the jobs’ physical demands, he said, but the low wage and competition from other employers has intensified the problem.
“They are struggling constantly … to maintain a workforce,” Piercey said.
Part of the problem, he said, is that when part-timers are moved into full-time, they face a four-year hiring freeze, near $19 per hour, at air hubs like Louisville’s Worldport before they get a raise, in their fifth year, to near $30 per hour.
Lots of people don’t stick around for that long to get to the higher pay, especially if they can earn more, sooner, in other jobs that take less of a physical toll, he said.
Another factor that’s bringing the situation to a head: a wave of retirements. Lots of the UPS air hubs were built in the 1980s, which means many employees are now hitting 30 years of service, enabling them to retire with a pension.
Those dynamics are leaving lots of employees “overworked and over-supervised,” he said.
The company continues to push workers to get more things done in smaller increments of time, Piercey said, and the union wants the company to hire more full-time workers to alleviate some of those pressures.
UPS spokesman Mike Mangeot told Insider via e-mail that while the company does not want to discuss specifics in public, economics, including wages, benefits and retirements, “are certainly an important point of the discussion.
“It’s no secret that we’re in a highly competitive job market, and we’re exploring options for addressing that,” he said.
Local 89 is governed by three agreements — national, regional and local — and wages are negotiated at the national level by the International Brotherhood of Teamsters, which is led by President James P. Hoffa.
Piercey said that negotiations are sputtering also because the company eventually wants to extend its operations to seven days per week, from the current six.
While Mangeot said that UPS has “made no definitive commitment on Sunday delivery at this time,” Piercey said the move is “inevitable” because of competition from Amazon, the U.S. Postal Service and FedEx.
Piercey said the union and the company are trying to figure out how to extend the service without encroaching upon existing agreements. Many union members are pushing back because they don’t want to work Sundays. He said the rollout of the Saturday service has been “bumpy.”
The company has proposed a second tier of delivery drivers who would earn less and work weekend shifts, but Piercey said the union opposes such a move because it tends to weaken the union by splitting it into two factions. Similar concerns prompted GE Appliances workers to reject a new contract in 2016.
Piercey said that employees who perform the same work should receive the same pay, especially if they work the less desirable Sunday shift.
Mangeot said that UPS had done air express deliveries on Saturdays for years before recently adding Saturday “as a sixth full-service delivery day.”
“It’s worth noting,” he said, “that the vast majority of Saturday drivers work Tuesday-Saturday schedules.”
UPS is “constantly evaluating our service based on customer and consumer demand,” Mangeot said. “Pay and driver schedules for Sunday delivery would be negotiated as part of the collective bargaining agreement. As for package handlers, Worldport has operated a Sunday sort for many years.”
Bad blood clouding negotiations?
The contract negotiations are occurring as union leaders, including Teamsters Local 89 President Fred Zuckerman, are vying to oust Hoffa. Zuckerman, who represents one of the nation’s largest locals, and Teamsters Local 25 President Sean O’Brien, of Boston, hope to oust Hoffa in the elections in 2021.
Zuckerman has sparred with Hoffa previously and in 2016 created Teamsters United, a “movement to win new leadership and a new direction for our union.” Zuckerman said at the time that Hoffa was “in bed with UPS management.”
Piercey, who started with UPS in 2001 and has been with the union full-time since 2015, said that he does not believe the upcoming union elections are affecting the difficulty of the negotiations, though they may put more pressure on the IBT to discuss bigger issues that in the past may have been neglected — but need to be addressed.
“It can be a good thing,” he said.
Mangeot said that “subgroups within the Teamsters … have differing views on the issues. But in the end, the process has produced tentative agreements, subject to ratification, on a wide variety of noneconomic issues.
“We remain confident in our ability to reach an agreement that meets the needs of our employees and the business,” he said.
Negotiations with the package handlers are occurring while UPS separately is in protracted negotiations with its mechanics, represented by Teamsters Local 2727.