Highly Paid Union Workers Give UPS a Surprise Win in Delivery Wars - Bloomberg Businessweek
Dave Helminski will drop off his last package for United Parcel Service Inc. on Christmas Eve 2022 and retire after four decades as a driver in Chicago. He joined UPS after four years in the Marine Corps and a yearlong stint installing carpet. He put in a few years loading trucks, then became a driver and was set for life. After Helminski drops off that last package, he’ll have pensions that provide almost the same $100,000 a year he makes now. “I came out of the lower middle class, and I’m living the dream,” Helminski says, wearing a face covering with the Marines emblem as he heads home from his shift at a large UPS facility in the northern suburb of Palatine.
Helminski’s dream industry has lately become more of a nightmare scenario at rival FedEx Corp. The massive labor shortage that’s rocked the U.S. since the pandemic and disrupted long-established employment relationships hasn’t had much impact on UPS, which pays its unionized drivers the highest wages in the industry. That’s helped it maintain a stable workforce and rising profits throughout the current disruptions. Meanwhile, lower-paying, nonunionized FedEx racked up $450 million in extra costs because of labor shortages. And while UPS easily beat earnings expectations and predicted a rising profit margin in the U.S. for the fourth quarter, FedEx signaled that its profit margin will fall further. The lack of workers is taking a toll on its reliability, too. FedEx’s recent on-time performance for express and ground packages has sunk to 85%, while UPS has met deadlines on 95% of those packages, according to data collected by ShipMatrix Inc.
Dave Helminski will drop off his last package for United Parcel Service Inc. on Christmas Eve 2022 and retire after four decades as a driver in Chicago. He joined UPS after four years in the Marine Corps and a yearlong stint installing carpet. He put in a few years loading trucks, then became a driver and was set for life. After Helminski drops off that last package, he’ll have pensions that provide almost the same $100,000 a year he makes now. “I came out of the lower middle class, and I’m living the dream,” Helminski says, wearing a face covering with the Marines emblem as he heads home from his shift at a large UPS facility in the northern suburb of Palatine.
Helminski’s dream industry has lately become more of a nightmare scenario at rival FedEx Corp. The massive labor shortage that’s rocked the U.S. since the pandemic and disrupted long-established employment relationships hasn’t had much impact on UPS, which pays its unionized drivers the highest wages in the industry. That’s helped it maintain a stable workforce and rising profits throughout the current disruptions. Meanwhile, lower-paying, nonunionized FedEx racked up $450 million in extra costs because of labor shortages. And while UPS easily beat earnings expectations and predicted a rising profit margin in the U.S. for the fourth quarter, FedEx signaled that its profit margin will fall further. The lack of workers is taking a toll on its reliability, too. FedEx’s recent on-time performance for express and ground packages has sunk to 85%, while UPS has met deadlines on 95% of those packages, according to data collected by ShipMatrix Inc.
