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, UPS CEO Carol Tomé said during an earnings call Tuesday.
The salary ranges for full-time and part-time drivers were among the details to come out this week as the Teamsters union begins the process of ratifying the tentative agreement that emerged last month as a strike appeared imminent.
“When you look at total compensation, by the end of the new contract, the average UPS full-time driver will make about $170,000 annually in pay and benefits,” Tomé said. “And for all part-time union employees that are already working at UPS, by the end of this contract, they will be making at least $25.75 per hour while receiving full health care and pension benefits.”
The Teamsters authorized a strike if a new contract agreement couldn’t be reached. Voting on the proposed contract began last week and will continue until August 22nd.
Working conditions for workers are expected to improve as UPS and Teamsters reached an agreement on air conditioning measures, “including air conditioning and every new U.S. package car starting in January 2024.”
Workers will also get Martin Luther King Jr. Day as a paid holiday for the first time in company history thanks to the new tentative contract.
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![UPS driver Joe Speeler makes a delivery at the Leanon Shops in Mount Lebanon, Pa., on Tuesday, Sept. 21, 2021. The Teamsters union and the shipping giant tentatively agreed on a contract in 2023 that would pay the average, full-time UPS driver $170,000 per year, UPS CEO Carol Tomé said during an Aug. 8 earnings call.](https://i0.wp.com/feeds.feedblitz.com/gcdn/presto/2022/09/10/USAT/ae485fef-be04-4e36-9cc2-928cec3b72b8-AP22250454314846.jpg?w=1080&ssl=1)
How labor talks dampened UPS business
In the U.S., UPS saw a nearly 10% decrease in average daily package volume as customers transferred their business to FedEx, the U.S. Postal Service and other regional carriers as they prepared for what would have been the largest single employer strike in U.S. history, had the Teamsters walked off the job.
“Most importantly, I want to thank our customers for putting their trust and their business with us during our labor negotiations,” Tomé said during the company’s second quarter earnings call Tuesday. “And for those customers who diverted, we look forward to bringing you back to our network.”
Tomé said the company anticipated the labor negotiations with Teamsters, which started in April for a new national contract, to be “late and loud.”
“As the noise level increased throughout the second quarter, we experienced more volume diversions than we anticipated,” Tomé said.
This decrease in daily volume also contributed to a roughly 7% decrease in revenue for the quarter.
Tomé said in an effort to avoid further customer loss, some 500 UPS executives met regularly with customers in an effort to maintain their business during negotiations, and if the company wasn’t able to maintain the business, UPS would create a plan to win back customers once the tentative agreement is ratified, which could come on Aug. 22 when Teamster member voting concludes.
“We’re now laser-focused on executing our win-back initiatives and pulling through the more than $7 billion of opportunity in our sales pipeline,” Tomé said.