Unionized package delivery drivers and logistics warehouse employees that work for United Parcel Service (UPS) voted to authorize a strike if they don’t receive a new contract by the time the current deal expires on August 1.

Some 97% of the workers, who power the largest delivery service in the United States, voted in favor of the strike in results made public Friday, June 16. Should the more than 340,000 UPS Teamsters stop working, it would be the largest strike against a single employer in American history. The strike would cripple the operations of an essential delivery service provider that promotional products companies – and the U.S. economy more broadly – relies upon.

Perspective: A Strike Is Not Definite

Whether a strike will ever actually occur is up in the air. Key things to know:

• A work stoppage is not imminent. It’s only, at this point, authorized to occur if a new contract is not agreed to by August 1, 2023.

• Between now and the potential strike date, UPS says that service will continue as normal. “The results (of the union vote)… do not impact our current business operations in any way,” a statement from the company said. “We continue to make progress on key issues and remain confident that we will reach an agreement that provides wins for our employees, the Teamsters, our company and our customers.”

• Authorizing a strike is a tactic unions often use in contentious labor negotiations. It gives union leaders additional power at the bargaining table, but again, doesn’t mean a strike is certain. “The strongest leverage our members have is their labor and they are prepared to withhold it to ensure UPS acts accordingly,” said Teamsters President Sean M. O’Brien, who is spearheading the negotiations.

• There has been progress of late in talks. For instance, the Teamsters and UPS reached a tentative agreement this week that will result in air conditioning being added to delivery vans in the future. Current vehicles will not be retrofitted, but UPS said other measures will be taken to help reduce health and safety threats from heat.

• Beyond air conditioning, the Teamsters have said that agreements on more than 40 other issues have been achieved.

• On another positive note, shipping industry experts told Barron’s they expect UPS and Teamsters to avert a strike. It’s possible the Biden administration may intervene “behind the scenes” to help prevent a work stoppage, a source told Barron’s.

The Big Issues: Wages & Benefits, Union Anger

In the coming weeks, negotiators will dig into the details of establishing wages and benefits for the next five-year contract for Teamsters.

• Pay, as you’d expect, is a major sticking point. Driven significantly by online shopping that ramped up delivery volumes, UPS’ adjusted net income soared from $6.3 billion in 2018 to $11.3 billion in 2022. Teamsters executed to meet the demand, and want a piece of the pie.

97%‼️Talk about irony. The last time the @Teamsters went on strike @UPS was 1997. Fast forward to today, following overwhelming engagement from our members, 97% of UPS #Teamsters have voted yes for strike authorization. #LFG #UnitedThenUnitedNow #OurTime https://t.co/fRCVYODQ1x

— Sean O'Brien (@TeamsterSOB) June 16, 2023

• UPS revenue, profits and volume slipped in the first quarter amid softer demand, which can potentially influence what company negotiators are willing to offer/concede to Teamsters in pay and benefits. The union hasn’t made wage demands public, but O’Brien has been adamant for months that Teamsters are willing to play hardball to get workers what they believe they deserve.

• O’Brien told CNN last week: “When you get into the meat and potatoes of wages and benefits, things can get very dicey, very controversial. Our goal is to get the best deal to avoid a strike. If UPS does not give us what they know we need and want, then they will be striking themselves.”

• Union members didn’t approve the current contract. In fact, a majority of the UPS Teamsters didn’t vote to ratify it in 2018. However, previous union leadership instituted the deal regardless, saying not enough members participated in a vote that would have ratified a strike. That sparked anger among the rank and file and the animosity has lingered. No technicality would prevent a strike this time; if a contract isn’t reached by the deadline, union members will have the power to stop working, analysts say.

Promo Point of View

• A UPS strike could seriously disrupt the transportation services suppliers, distributors and decorators rely on to deliver the products they provide. The longer a strike, the greater the disruption. Simply put, there isn’t enough capacity from other delivery service providers to pick up the UPS slack.

• UPS is partner in ASI’s Business Savings Program, which offers members exclusive deals. ASI leaders have been closely monitoring the negotiations.

• “While we respect the rights of workers to voice their concerns and take collective action, we also understand the difficulties faced by ASI members navigating what could become an economically challenging period,” said Timothy M. Andrews, president and chief executive officer of ASI. “We hope for a speedy resolution to contract talks and will continue to closely monitor the situation. If a strike were to occur, it will not affect our affiliate relationship with UPS and, once settled, ASI will continue to offer UPS shipping discounts through our ASI Business Savings Program.”

• In separate labor negotiations with relevance for promo, the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) reached a tentative agreement on a new contract for 22,000 unionized workers who labor at 29 pivotal ports on the U.S. West Coast. The deal was announced Wednesday, June 14.