UPS’s employees have now ratified their new contract, meaning its provisions have taken effect and will be in place for the next five years.

But that doesn’t mean everyone is happy. Fewer than half of the union employees who voted on the proposal said they were in favor of it. Those who voted against it worry that the contract will create a second class of workers who can be paid less but ultimately do more of the work.

To recap: in July, UPS and its 250,000 unionized employees, represented by the Teamsters, reached a tentative agreement to avoid picket lines. The workers had voted to authorize a strike if they weren’t satisfied with the contract.

Ultimately, UPS gave employees some of what they wanted including a promise of six months’ notice before adopting new technologies and assurances that the most experienced drivers would be the last to be forced to work weekends.

But that deal had not become official until the ratification vote this month.

UPS Drivers Actually Voted The Contract Down

About 93,000 UPS workers cast ballots in the ratification vote. This number reflects fewer than half of the workers that the deal impacts. About 54 percent of those voters said that they did not want this deal.

The drivers’ primary source of concern was the creation of a new job title, “hybrid driver.” These employees will sort packages in UPS facilities and deliver them on trucks as needed. They’ll be paid on a lower scale than than current drivers with full-time jobs. Further, they’ll be the first tapped when UPS needs drivers to work overtime. Drivers pushed hard against forced overtime in this summer’s contract negotiations.

So if a majority of drivers voted no, what was the ratification process? That’s a quirk of the Teamsters’ union rules. To reject a contract, two-thirds of all eligible voters must vote no, regardless of the voter turnout.

In UPS’s case, only 44 percent of eligible voters cast votes at all. Only half of those (about a quarter of all employees) said no to the contract. Under Teamsters rules, the contract stands.

That said, the Teamsters for a Democratic Union—an organization that seeks to change certain Teamsters union policies and rules—say this is the first time ever that a national contract has been ratified despite a majority of voters saying no.

What is a UPS Hybrid Driver?

For several years, UPS has been at odds with its workforce over weekend delivery and overtime requests. The carrier has sought to expand to six-day delivery weeks, but the unionized workforce resisted forced overtime with pay.

In summer negotiations, UPS offered to create “combination drivers” or workers who would act as drivers during high-demand periods, but could also fulfill other roles within the massive company. These drivers would be the first forced to work overtime. But UPS managers would continue to offer overtime for pay to the most experienced drivers first. The position was created to offer more full-time jobs for part-time workers.

Now, a majority of UPS’s workforce is rejecting the notion of these “hybrid drivers.”

Workers say that part of their resistance comes from concern for their own jobs. If UPS can pay these employees less and force them to work more, veteran drivers worry the company could shift more work to hybrid drivers and away from traditional drivers.

Further, some workers say hybrid drivers won’t have the same protections full-time drivers have. Hybrid drivers will be part of the union, but forced overtime is written into their proposal contracts.

UPS says hybrid drivers will allow the company to better compete in the “cutthroat world of online retail.” In other words, it’ll save the company money because hybrid drivers will be paid less than traditional ones.

One could argue that UPS drivers have it pretty good. FedEx’s drivers are contractors, not employees of the company. Amazon appears to be moving toward a model where third-party contractors actually use their own cars to make deliveries. By comparison, to be a full-time employee with union protections might be pretty good.

What The Ratified Contract Means For Shippers

As labor and fuel costs rise, carriers aren’t making the margins they used to on drivers. They have to make cuts to continue to deliver profits to shareholders and often those cuts come out of workers’ pay rates.

This deal will be in place until the summer of 2023 at which time UPS and its employees will go to the bargaining table again. The Teamsters have said that they’ll work within union leadership to quell concerns among drivers.

But if drivers’ current concerns are borne out, it seems likely that the 2023 negotiating table will deal with some of these same issues. For workers, concerns about rising costs and stagnating wages will likely be even more acute then. For UPS, as Amazon enters the delivery market and FedEx and DHL continue to compete, saving money will feel more and more critical.

Resource: Your Guide to Negotiating Better Shipping Rates

What shippers need to remember is that they have the ability to carry out contract negotiations with their carrier despite the bargaining that carriers are doing themselves with their own union leaders and members.

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