Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
UPS Inc. and leaders of the Teamsters Union late last night reached tentative five-year labor
contracts covering nearly 250,000 unionized employees at UPS and the company's less-than-truckload (LTL) unit, UPS Freight.
The tentative agreements, which still must be ratified by the rank-and-file, covers about 240,000 Teamster members working
in Atlanta-based UPS' small-package operations and another 10,000 to 12,000 union workers at UPS Freight. Combined, it represents
the largest collective-bargaining agreement in North America.
In a statement last night, the Teamsters said union representatives from UPS and UPS Freight will soon meet
to review the respective agreements. Following that, ballots will be sent to members who will then vote by mail.
The results are expected by mid-June, the union said.
The tentative agreements come slightly more than three months before the scheduled July 31 expiration dates of
both contracts. If ratified by the members, the new contracts will take effect Aug. 1.
Each side was eager to get the deals done long before their deadlines. The first formal communication
over the contracts took place last August, much earlier than it has in the past.
In its statement, the Teamsters said UPS and UPS Freight workers will receive "substantial pay raises," and
the company will spend more on its pension and health and welfare contributions. Included in the UPS tentative
agreement is a "significant increase" in the starting wage rate for part-time small-package workers, the union said.
The union would not disclose any specifics. DC Velocity reported in late March that the union, which had proposed a
five-year contract, sought a $1-per-hour wage increase in each of the contract years and a $1.50-per-hour annual
increase from current levels to cover pension and health benefits. The current contract, reached in 2007, calls
for a $1 an hour annual increase in the company's contribution benefits.
The union also proposed at the time an increase in part-time starting pay to $15 an hour from the current $8.50 an hour.
The tentative agreement requires UPS to create more than 2,000 full-time jobs over the life of the contract by
combining part-time positions into full-time slots. First included in the 1997 contract signed after the Teamsters shut down
UPS for 15 days that summer with a nationwide strike, the language had required the company to create 20,000 full-time jobs
between 1998 and 2008. The Teamsters, and in particular the dissident group Teamsters for a Democratic Union (TDU), have said
UPS has not done all it could in the past 15 years to create that many full-time positions.
Under the UPS Freight tentative agreement, workers will make lower co-payments for health insurance, and
part-time workers will have the "ability" to become full-timers, according to the Teamster statement. All
laid-off UPS Freight road drivers will be put back to work, a provision the union said will settle the issue
of management's practice of subcontracting out driving duties. Ken Paff, national organizer for TDU, said in
an interview earlier this year that UPS subcontracts about half of UPS Freight's driving duties and subcontracts
over-the-road service for the small-package unit, although not as much.
The proposed agreement shifts 140,000 small-package workers to Teamster-controlled health plans from
company-sponsored plans, according to the union statement. The move maintains "current strong benefits"
for all UPS Teamsters, the union said.
Health care had become a wedge issue during the talks. Ken Hall, head of the Teamsters' small-package division,
vowed repeatedly that active unionized UPS employees would not pay anything toward their health insurance premiums.
As of today, there has been no comment on what operational changes, if any, have come from the agreements. Of note is
UPS' "SurePost" program, where it tenders parcels to the U.S. Postal Service for "last-mile" delivery from the local post
office to mostly residential destinations. The program, designed for e-commerce shipments from online merchants to residences,
is an inexpensive way for businesses to reach the largest number of residential addresses with orders for online merchandise.
SurePost has gained significant traction since the last UPS-Teamster contract in 2007, mirroring the explosive rise of e-commerce
since then.
The post-holiday demand for deliveries to support e-commerce, both in forward and reverse shipping patterns, helped
drive solid increases in UPS' first-quarter domestic package volume, revenue, and profit results, the company said when
it released its quarterly numbers yesterday.
In January, Hall demanded that UPS propose language that would protect Teamsters jobs in return for the union's
continued cooperation with the program. Paff said at the time that much of the work is done by low-paid sorters and
loaders who build pallets, each containing hundreds of packages, for delivery by UPS drivers to the closest local post
office. Paff said the union doesn't want to end the program but have more of a role in the transportation component of it.
In separate statements, the heads of each group lauded the agreements. "These agreements are a 'win-win-win' for our people,
customers, and shareholders," said Scott Davis, UPS chairman and CEO. "The fact that we have reached agreements well before our
current contracts expire is a testament to the skills and determination of all those involved in these negotiations."
"These tentative agreements are shining examples to the entire country of a hugely successful company that thrives because
of its unionized workers," said James P. Hoffa, Teamster general president.
FLURRY OF ACTIVITY
The announcement caps a busy week for UPS. Besides reporting its quarterly results, the company announced Wednesday
that it planned to buy 700 tractors fueled by liquefied natural gas (LNG) over the next 20 months. The vehicles, which
run on fuel believed to be 30 to 40 percent cheaper than traditional diesel, will perform local pickups and operate between
UPS hubs in 10 states, the company said.
The planned purchase adds to the 112 LNG-powered vehicles UPS already has in its fleet. UPS did not say how much it will
spend for the rigs or who will be the manufacturer. Cummins Inc. will supply the engines, according to a UPS spokeswoman.
UPS will also spend $18 million to build LNG refueling stations in Knoxville, Nashville, and Memphis, Tenn., as well as Dallas.
UPS already has five LNG refueling facilities in its U.S. network.
On Thursday, UPS said it acquired CEMELOG Zrt, a Hungarian pharmaceutical logistics company, for an undisclosed sum. The
transaction, expected to close by the end of June, puts UPS in the Eastern and Central European health care segment for the
first time. Up until now, UPS served the region's health care market through its main health care distribution campus in the
Netherlands and its own transportation network.
The CEMELOG purchase is the first European health care acquisition UPS has made since late 2011, when it acquired the
Italian firm Pieffe.
The acquisition adds 255,000 square feet of health care distribution space to UPS's current European network, the company
said. Worldwide, UPS operates 41 health care distribution facilities with 6.4 million square feet of capacity.
The way that shippers and carriers classify loads of less than truckload (LTL) freight to determine delivery rates is set to change in 2025 for the first time in decades, introducing a new approach that is designed to support more standardized practices.
But the transition may take some time. Businesses throughout the logistics sector will be affected by the transition, since the NMFC is a critical tool for setting prices that is used daily by transportation providers, trucking fleets, third party logistics providers (3PLs), and freight brokers.
For example, the current system creates 18 classes of freight that are identified by numbers from 50 to 500, according to a blog post by Nolan Transportation Group (NTG). Lower classed freight costs less to ship, ranging from basic goods that fit on a standard shrink-wrapped 4X4 pallet (class 50) up to highly valuable or delicate items such as bags of gold dust or boxes of ping pong balls (class 500).
In the future, that system will be streamlined by four new features, NMFTA said:
standardized density scale for LTL freight with no handling, stowability, and liability issues,
unique identifiers for freight with special handling, stowability, or liability needs,
condensed and modernized commodity listings, and
improved usability of the ClassIT classification tool.
The new changes look to simplify the classification by grouping similar articles together and assigning most classes based solely on density – the most measurable of the four characteristics, he said. Exceptions will be handled separately, adding one or more of the three remaining characteristics in cases where density alone is not adequate to determine an accurate class.
When the updates roll out in 2025, many shippers will see shifts in the LTL prices they pay to move loads, because the way their freight is classified – and subsequently billed – might change. To cope with those changes, he said it’s important for shippers to review their pricing agreements and be prepared for these adjustments, while carriers should prepare to manage customer relationships through the transition.
“This shift is a big deal for the LTL industry, and it’s going to require a lot of work upfront,” Davis said. “But ultimately, simplifying the classification system should help reduce friction between shippers and carriers. We want to make the process as straightforward as possible, eliminate unnecessary disputes, and make the system more intuitive for everyone. It’s a change that’s long overdue, and while there might be challenges in the short term, I believe it will benefit the industry in the long run.
Business leaders in the manufacturing and transportation sectors will increasingly turn to technology in 2025 to adapt to developments in a tricky economic environment, according to a report from Forrester.
That approach is needed because companies in asset-intensive industries like manufacturing and transportation quickly feel the pain when energy prices rise, raw materials are harder to access, or borrowing money for capital projects becomes more expensive, according to researcher Paul Miller, vice president and principal analyst at Forrester.
And all of those conditions arose in 2024, forcing leaders to focus even more than usual on managing costs and improving efficiency. Forrester’s latest forecast doesn’t anticipate any dramatic improvement in the global macroeconomic situation in 2025, but it does anticipate several ways that companies will adapt.
For 2025, Forrester predicts that:
over 25% of big last-mile service and delivery fleets in Europe will be electric. Across the continent, parcel delivery firms, utility companies, and local governments operating large fleets of small vans over relatively short distances see electrification as an opportunity to manage costs while lowering carbon emissions.
less than 5% of the robots entering factories and warehouses will walk. While industry coverage often focuses on two-legged robots, Forrester says the compelling use cases for those legs are less common — or obvious — than supporters suggest. The report says that those robots have a wow factor, but they may not have the best form factor for addressing industry’s dull, dirty, and dangerous tasks.
carmakers will make significant cuts to their digital divisions, admitting defeat after the industry invested billions of dollars in recent years to build the capability to design the connected and digital features installed in modern vehicles. Instead, the future of mobility will be underpinned by ecosystems of various technology providers, not necessarily reliant on the same large automaker that made the car itself.
Regular online readers of DC Velocity and Supply Chain Xchange have probably noticed something new during the past few weeks. Our team has been working for months to produce shiny new websites that allow you to find the supply chain news and stories you need more easily.
It is always good for a media brand to undergo a refresh every once in a while. We certainly are not alone in retooling our websites; most of you likely go through that rather complex process every few years. But this was more than just your average refresh. We did it to take advantage of the most recent developments in artificial intelligence (AI).
Most of the AI work will take place behind the scenes. We will not, for instance, use AI to generate our stories. Those will still be written by our award-winning editorial team (I realize I’m biased, but I believe them to be the best in the business). Instead, we will be applying AI to things like graphics, search functions, and prioritizing relevant stories to make it easier for you to find the information you need along with related content.
We have also redesigned the websites’ layouts to make it quick and easy to find articles on specific topics. For example, content on DC Velocity’s new site is divided into five categories: material handling, robotics, transportation, technology, and supply chain services. We also offer a robust video section, including case histories, webcasts, and executive interviews, plus our weekly podcasts.
Over on the Supply Chain Xchange site, we have organized articles into categories that align with the traditional five phases of supply chain management: plan, procure, produce, move, and store. Plus, we added a “tech” category just to round it off. You can also find links to our videos, newsletters, podcasts, webcasts, blogs, and much more on the site.
Our mobile-app users will also notice some enhancements. An increasing number of you are receiving your daily supply chain news on your phones and tablets, so we have revamped our sites for optimal performance on those devices. For instance, you’ll find that related stories will appear right after the article you’re reading in case you want to delve further into the topic.
However you view us, you will find snappier headlines, more graphics and illustrations, and sites that are easier to navigate.
I would personally like to thank our management, IT department, and editors for their work in making this transition a reality. In our more than 20 years as a media company, this is our largest expansion into digital yet.
We hope you enjoy the experience.
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In this chart, the red and green bars represent Trucking Conditions Index for 2024. The blue line represents the Trucking Conditions Index for 2023. The index shows that while business conditions for trucking companies improved in August of 2024 versus July of 2024, they are still overall negative.
FTR’s Trucking Conditions Index improved in August to -1.39 from the reading of -5.59 in July. The Bloomington, Indiana-based firm forecasts that its TCI readings will remain mostly negative-to-neutral through the beginning of 2025.
“Trucking is en route to more favorable conditions next year, but the road remains bumpy as both freight volume and capacity utilization are still soft, keeping rates weak. Our forecasts continue to show the truck freight market starting to favor carriers modestly before the second quarter of next year,” Avery Vise, FTR’s vice president of trucking, said in a release.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index, a positive score represents good, optimistic conditions, and a negative score shows the opposite.
A coalition of truckers is applauding the latest round of $30 million in federal funding to address what they call a “national truck parking crisis,” created when drivers face an imperative to pull over and stop when they cap out their hours of service, yet can seldom find a safe spot for their vehicle.
According to the White House, a total of 44 projects were selected in this round of funding, including projects that improve safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, and redesigning interchanges. The money is the latest in a series of large infrastructure investments that have included nearly $12.8 billion in funding through the INFRA and Mega programs for 140 projects across 42 states, Washington D.C., and Puerto Rico. The money funds: 35 bridge projects, 18 port projects, 20 rail projects, and 85 highway improvement projects.
In a statement, the Owner-Operator Independent Drivers Association (OOIDA) said the federal funds would make a big difference in driver safety and transportation networks.
"Lack of safe truck parking has been a top concern of truckers for decades and as a truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation. We must either continue to drive while fatigued or out of legal driving time, or park in an undesignated and unsafe location like the side of the road or abandoned lot,” OOIDA President Todd Spencer said in a release. “It forces truck drivers to make a choice between safety and following federal Hours-of-Service rules. OOIDA and the 150,000 small business truckers we represent thank Secretary Buttigieg and the Department for their increased focus on resolving an issue that has plagued our industry for decades.”