The tentative 5-year contract agreed to late last month by UPS Inc. and Teamsters union leaders would pay drivers for the company's expanded network of two-person sleeper teams up to 92 cents per mile combined for pulling single trailers, 94 cents per mile hauling double-trailers and 96 cents per-mile transporting triple-trailers.
Under the proposed contract, UPS would hire and train at least 2,000 Teamster employees over the life of the contract to staff the expanded sleeper-team network. The teams' primary function would be to haul shipments that had bene diverted from rail intermodal service to over-the-road. UPS has long been one of the single largest users of intermodal. The proposed volume of diverted traffic has not been specified, and UPS will not comment on the amount of intermodal traffic it tenders to the rails.
The work is expected to begin in the first quarter of 2019, Denis Taylor, head of the union's package division, said during a conference call tonight to outline the proposed agreement.
The Teamsters have said that wages for sleeper-team drivers would be higher than any trucker wage in the U.S. Sleepers are in higher demand now after the implementation of the electronic logging device (ELD) mandate, which requires strict adherence to driver hours-of-service regulations. Unlike a solo driver, who must pull off the road after 11 hours of continuous driving (with a 30-minute break after 8 hours), in a team one of the drivers can take the wheel after the other exhausts his or her available hours. The supply of available two-person teams is very tight, however.
The proposed contract allows UPS to bump up workers' weekly hours during the peak holiday shipping season to 70 hours from 60 hours. However, the company would be required to pay double-time wages for hours worked over the 60-hour limit. Taylor said on the call that UPS shouldn't have trouble finding workers to deliver packages beyond the 60-hour weekly threshold.
The contract would create a new classification of full-time "combination" drivers who will work weekend schedules and be paid at a lower wage scale than incumbent full-time drivers over the contract's life. Incumbent full-timers who work Monday through Friday would remain on those schedules and not be forced to work on weekends, under the proposal.
The proposal calls for a $4.15-per-hour wage hike over five years for full-time Teamsters workers, reaching a maximum of more than $40 an hour by the end of the cycle. UPS' unionized part-timers will be paid a starting rate of $13 an hour, which will escalate to $15.50 as of the Aug. 1, 2022. The small-package agreement covers 256,000 UPS employees.
A separate agreement covering about 12,000 workers at the Atlanta-based company's less-than-truckload (LTL) unit is still being negotiated. Both contracts were scheduled to expire July 31. Taylor said that the two sides have agreed to extend the small-package pact for an undetermined period.
The rank-and-file must first vote to ratify the national or "master" small-package contract. Members would then vote on local or regional supplements to the master pact that specifically affect their areas. The master contract cannot take effect until all supplements and riders are approved.
Under the proposal, two or more packages moving to the same address under "Surepost," where the company tenders packages to the U.S. Postal Service for last-mile residential deliveries, would instead be delivered by UPS drivers. The same would hold true for any combination of Surepost deliveries and regular ground deliveries bound for the same address.
The Teamsters have long wanted to kill Surepost because they see it as siphoning off volumes that could be delivered by UPS drivers. UPS said that Surepost is a cost-effective way of delivering parcels, many of which are products ordered online, to individual residences without the expense of dispatching a driver and a package car.
In a concession to the company, the Teamsters will allow Surepost to be sold at UPS' retail outlets known as "The UPS Store." Ironically, Surepost cannot not be marketed through The UPS Store network, but the Stores could sell a similar product, known as "Smartpost," offered by FedEx Corp., UPS' chief rival and a mostly non-union carrier.