UPS Strike 2023: A Ticking Time Bomb for Global Logistics

May 29, 2023
5 mins

As the expiration date of the current contract between United Parcel Service (UPS) and its unionized employees rapidly approaches, the threat of a strike looms large on the horizon, potentially disrupting the global supply chain​1​. More than 340,000 unionized UPS employees are prepared to strike if the company fails to meet their demands by July 31, 2023​1​.

The last time UPS workers walked off the job was over two decades ago, a strike that significantly hampered the company's operations. However, the impact of a potential strike in 2023 would be considerably more disruptive due to the significant surge in the reliance on delivery services in recent years​1​. The company now delivers millions more packages every day than it did just five years ago, with UPS shipments accounting for roughly a quarter of all U.S. parcel volume​1​.

The current labor dispute has been fueled by a number of factors. Firstly, UPS has witnessed a substantial increase in annual profits in the past two years, almost tripling from pre-pandemic levels. This financial success has sparked demands from the Teamsters Union for frontline UPS workers to receive a share of this windfall​1​. Secondly, the union members rejected the contract they were offered in 2018, but it was nevertheless pushed through by the union leadership, stirring discontent among the workforce​1​.

The union's demands include addressing part-time pay and what workers perceive as excessive overtime. Additionally, the union seeks to eliminate a contract provision that created two distinct categories of workers with different pay scales, hours, and benefits. Driver safety, particularly the lack of air conditioning in delivery trucks, is also a key issue​1​.

As of now, the situation remains uncertain. UPS CEO Carol Tomé has publicly expressed optimism, stating that the company and the Teamsters are not far apart on major issues and expressing confidence that an agreement can be reached by the end of July​1​. However, should negotiations fail, the consequences could be significant. Americans may have to adjust their shopping habits and businesses may face prolonged supply chain disruptions​1​.

Recent developments indicate that negotiations are still ongoing, and the situation is expected to become clearer within the course of the coming week​2​. Should a strike occur, the effects would likely be felt across the globe, potentially exacerbating existing supply chain issues that have lingered since the COVID-19 pandemic​1​.

Protecting Your Brand w/ ShipAid

In this uncertain climate, companies like ShipAid may be an invaluable resource to businesses and consumers alike. As the threat of a UPS strike looms, businesses need to be proactive in safeguarding their supply chains and ensuring minimal disruption to their operations. Similarly, consumers will be seeking reassurance that their online purchases will be protected.

Shipping protection services, such as ShipAid, offer a solution that can help offset financial loss in the event of a package being lost, damaged, or stolen before the customer receives it. By offering shipping protection at checkout, businesses can mitigate the many impacts of delivery problems on their bottom line, reducing the time and effort spent on claim submission, approval, and resolution, and even saving customer relationships in the event of a delivery mishap​.

In addition to protecting businesses and consumers financially, shipping protection services also offer several other benefits:

  1. Provide customers with peace of mind: Given the recent logistics shake-ups, customers are sensitive to the frequency of package delivery issues. Shipping protection offers customers peace of mind that their purchases are protected, boosting their confidence in buying even fragile or big-ticket items online​.
  2. Reduce costs associated with issue resolution: With the right shipping protection provider, businesses can offload much of their customer service call volume, freeing up service reps for other pressing issues and eliminating the need to absorb the cost of replacing lost, damaged, or stolen products​.
  3. Improve the customer service experience: A quality shipping protection provider will make it easy for customers to submit claims 24/7, providing a simple and hassle-free resolution process that can turn potential detractors into lifelong brand advocates​.
  4. Protect your brand: If a customer's package is lost, stolen, or damaged, the resulting customer experience can significantly impact your brand's reputation. A positive customer service experience can create a lifelong advocate, while a poor one can result in the loss of a customer, potentially damaging your brand and making it difficult to attract new customers​.
  5. Enhance the post-purchase experience: Ecommerce success heavily depends on the last mile of delivery, which becomes a cornerstone of the customer experience. By offering a shipping protection solution, businesses can correct a poor customer experience at little to no additional cost, turning potentially negative brand experiences into positive ones​.

In short, while the potential UPS strike may cause large-scale disruptions in the global supply chain, shipping protection services such as ShipAid can help businesses and consumers navigate these challenging times. By leveraging digital, customer-first technology, such services cover items from the time they leave the warehouse until they reach the customer's doorstep, simplifying the claims process and eliminating the need for businesses to absorb the cost of replacement products when claims are approved​1​. In these uncertain times, the peace of mind and security offered by these services could be invaluable.

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