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UPS Union Issues
Is UPS just a poor negotiator?
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<blockquote data-quote="j13501" data-source="post: 845607" data-attributes="member: 918"><p>You ask a fair question, and deserve an thoughtful answer. The truth is that when UPS negotiates a contract, they know that increased wages (and benefits) will need to be offset with additional revenue and reduced costs. They plan the contract on an overall domestic U.S. level- meaning that they know that they can raise rates each year, which will cover some of the additional costs of the contract, but that the wage increases will also have to be offset with additional production. The contract is negotiated by the company with a plan to improve driver wages/benefits but also improve company profitability. </p><p></p><p>If delivery volume is rising faster than delivery stops, two good things happen for the company. First, the package density increases, meaning you have 2 packages at some stops now, rather than just 1. Since we get paid by the package, this improves our revenue, without adding much cost. This is an increase in "production" without you doing any additional stops per day. Second, the additional volume means that we may add some additional drivers that are in wage progression. Additional new drivers delivering at a lower wage rate, brings down the average driver wage, thus balancing the cost assumptions made by the company during negotiations. </p><p>The problem occurs when you have economic problems like we have for the last few years. If delivery volume is flat, or just rising at the same rate as delivery stops, then rising costs don't balance with the flat revenue. There are less multiple package stops, and more single package stops. Without that necessary package desity that comes from more packages per stop, the company still needs to get the same packages delivered per day, hopefully in the same time. This means additional stops per car. </p><p></p><p>I realize that this explanation may not satisfy you when you're the one with the additional stops per car everyday. UPS drivers work very hard every day and deserve the wages that they earn. But the company will risk reduced profitability if it just "gracefully accepts the wages and work performances in place at the time of the agreement". It needs to adjust to changing conditions so that it stays a profitable and strong company capable of paying increasing wages into the future.</p></blockquote><p></p>
[QUOTE="j13501, post: 845607, member: 918"] You ask a fair question, and deserve an thoughtful answer. The truth is that when UPS negotiates a contract, they know that increased wages (and benefits) will need to be offset with additional revenue and reduced costs. They plan the contract on an overall domestic U.S. level- meaning that they know that they can raise rates each year, which will cover some of the additional costs of the contract, but that the wage increases will also have to be offset with additional production. The contract is negotiated by the company with a plan to improve driver wages/benefits but also improve company profitability. If delivery volume is rising faster than delivery stops, two good things happen for the company. First, the package density increases, meaning you have 2 packages at some stops now, rather than just 1. Since we get paid by the package, this improves our revenue, without adding much cost. This is an increase in "production" without you doing any additional stops per day. Second, the additional volume means that we may add some additional drivers that are in wage progression. Additional new drivers delivering at a lower wage rate, brings down the average driver wage, thus balancing the cost assumptions made by the company during negotiations. The problem occurs when you have economic problems like we have for the last few years. If delivery volume is flat, or just rising at the same rate as delivery stops, then rising costs don't balance with the flat revenue. There are less multiple package stops, and more single package stops. Without that necessary package desity that comes from more packages per stop, the company still needs to get the same packages delivered per day, hopefully in the same time. This means additional stops per car. I realize that this explanation may not satisfy you when you're the one with the additional stops per car everyday. UPS drivers work very hard every day and deserve the wages that they earn. But the company will risk reduced profitability if it just "gracefully accepts the wages and work performances in place at the time of the agreement". It needs to adjust to changing conditions so that it stays a profitable and strong company capable of paying increasing wages into the future. [/QUOTE]
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