Highly Paid Union Workers Give UPS a Surprise Win in Delivery Wars


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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.