Teamsters withdraw demands banning UPS use of drones, autonomous vehicles

Teamsters union negotiators have withdrawn a contract demand that UPS Inc. ban the use of drones and autonomous vehicles to carry out package delivery services, according to a dissident Teamster group.

Denis Taylor, who heads the Teamsters' package division responsible for labor relations between the Atlanta-based company and the approximately 256,000 union members who handle UPS' main business line, pulled the proposal, according to a note published yesterday on the "Teamsters United" website. Teamsters United was a slate formed prior to the union's 2016 general election largely out of dissatisfaction with the mainstream Teamster leadership.

The note on the website did not disclose why Taylor withdrew the demand, or when he may have done it. Ken Paff, national organizer of the Teamsters for a Democratic Union (TDU), a dissident group that is working with Teamsters United, thought Taylor's decision was "odd," but ventured no guess as to why the demands were withdrawn.

The two sides completed the second week of talks on Friday aimed at reaching a new collective bargaining agreement to replace the five-year compact that expires Aug. 31. Paff said he doubted UPS pressured Taylor to pull the proposal because such an approach rarely, if ever, takes place so early in a contract negotiation. UPS and the Teamsters declined comment.

According to the site, UPS has also proposed to launch Sunday deliveries with the option of using part-time drivers operating their personal vehicles. The company has also requested all new employees deliver packages using their personal vehicles, Teamsters United said. The union opposes both proposals.

The site also said UPS wants to expand the use of "Surepost," a service it operates along with the U.S. Postal Service, so it could siphon delivery work from UPS Teamsters. Packages tendered to UPS and bound for residences are inducted deep into the postal network for final delivery by letter carriers. The Teamsters want to kill Surepost and turn over those deliveries to UPS union drivers.

In addition, UPS wants to be allowed to designate up to 20 percent of the routes at each location as residential routes, which Teamsters United said would result in drivers being paid at a lower rate than if they moved business-to-business packages. B2B packages, a high-margin business that has long been UPS' bread-and-butter, has been overtaken in the company's mix by business-to-consumer deliveries, a by-product of the soaring and seemingly relentless demand for e-commerce orders.

Teamsters United is headed by Fred Zuckerman, the head of Local 89 in Louisville, the location of UPS' primary air hub known as "Worldport," and the largest Teamster local in the UPS system with more than 10,000 members. In the 2016 election, Zuckerman came close to unseating incumbent James P. Hoffa, and outpolled Hoffa among U.S. voters. However, Hoffa's overwhelming victory margin in Canada offset the U.S. results and won him a fifth term as president. The slate captured six seats on the 24-member Teamster board, however. It is widely believed that most UPS Teamsters sided with Zuckerman in the election.

Zuckerman, who has a history of volatile relations with UPS and Teamster leadership, is expected to be a major voice during the contract talks. The negotiating landscape is expected to change several times before an agreement is eventually reached.

The centerpiece of the Teamsters package division's initial salvo is a demand that UPS create 10,000 full-time small-package jobs out of 20,000 existing part-time positions as part of a pledge to fill at least 20,000 full-time jobs with part-time employees. The union also wants UPS to establish a "premium service driver" classification which will be utilized when the Atlanta-based company's existing over-the-road feeder network can't adequately meet its service requirements. Drivers would be typically used to move loads between ground and air hubs more than 250 miles apart, according to the union proposal.

Organized labor is typically suspicious of technological advancements for fear it will take jobs away from humans. UPS, which is moving aggressively to integrate technology across its entire operation, has made no secret of its interest in drones and has made drone testing available for public viewing. It has been more circumspect with regards to autonomous vehicles, sensitive to the direct impact their utilization would have on concerns over drivers' job security.

In a related development, Teamsters United said that concurrent contract talks with UPS Freight, UPS' less-than-truckload (LTL) unit, will go nowhere until the issue of subcontracting work to non-union drivers is dealt with to the rank-and-file's satisfaction. The union has proposed a ban on all subcontracting of work normally done by a bargaining unit member.

Economic issues such as wages and benefits will be addressed in future negotiations, the union group said. The roughly 12,000 UPS Freight Teamsters want "significant improvements" to what the group called a "substandard" contract.

Separately, UPS said it will build a $1 million package operations center in El Paso to support business in what is known as the "North America Borderplex." The center will serve a region that includes Texas, New Mexico and Ciudad Juarez, Chihuahua, Mexico, and is home to about 2.5 million people, UPS said.

The facility, which will add more than 153,000 square feet of new processing capacity, is expected to begin operating in late 2018, UPS said.