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UPS CEO Carol Tomé announced during an earnings call that full-time UPS drivers will earn an average of $170,000 in annual pay and benefits at the end of a five-year contract agreement. The details of the salary ranges for full-time and part-time drivers have emerged as the Teamsters union begins the process of ratifying the tentative agreement. The contract also includes improved working conditions and benefits for part-time union employees. Voting on the proposed contract will continue until August 22nd. Olivia Evans,Doc Louallen reported
According to UPS CEO Carol Tomé, full-time UPS drivers will receive an average annual pay and benefits package of $170,000 at the end of a five-year contract agreement. This information was revealed during an earnings call on Tuesday. The details of the salary ranges for both full-time and part-time drivers were disclosed as the Teamsters union began the process of ratifying the tentative agreement, which emerged last month as a strike loomed.
Tomé emphasized that the average UPS full-time driver’s total compensation, including pay and benefits, will reach around $170,000 per year by the end of the new contract. Additionally, all part-time union employees currently working at UPS will earn a minimum hourly wage of $25.75, along with full health care and pension benefits, by the end of the contract.
The Teamsters union had authorized a strike if a new contract agreement couldn’t be reached. The voting on the proposed contract began last week and will continue until August 22nd.
As part of the agreement reached between UPS and the Teamsters, working conditions for employees are expected to improve. Measures related to air conditioning, including the installation of air conditioning in all new U.S. package cars starting in January 2024, were included in the deal.
Furthermore, for the first time in the company’s history, workers will have Martin Luther King Jr. Day as a paid holiday, thanks to the new tentative contract.
The negotiations and potential strike had a negative impact on UPS business, with a nearly 10% decrease in average daily package volume in the U.S. Customers diverted their business to FedEx, the U.S. Postal Service, and other regional carriers in anticipation of the potential strike, which would have been the largest single employer strike in U.S. history.
UPS expressed gratitude to its customers for their trust and business during the labor negotiations. Tomé acknowledged that the labor negotiations with Teamsters were expected to be challenging and disruptive. The increase in the noise level during the second quarter led to more volume diversions than anticipated.
Consequently, there was a roughly 7% decrease in revenue for the quarter. To prevent further customer loss, UPS executives engaged with customers regularly, aiming to maintain their business during the negotiations. If the company couldn’t retain the business, a plan to win back customers would be created once the tentative agreement is ratified.
UPS is now focusing on executing win-back initiatives and capitalizing on the over $7 billion worth of opportunities in its sales pipeline, according to Tomé.
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