2023-06-17 16:56:49
The strike of 185,000 workers in the American “UPS” shipping company 25 years ago led to the cessation of the operations of the “logistical giant”, after the strike lasted for 15 days, which led to a reduction in parcel deliveries, dumping the US Postal Services and “FedEx”. , and severely harming many businesses across the United States.
Currently, more than 340,000 workers in the company, represented by the Teamsters union, are threatening to strike to improve wages, working hours and working conditions if talks between the company and the union do not reach an agreement.
In the event that the suspension of work is applied, the decision will coincide with the start of the shopping season for school supplies, and the preparation of retailers for the peak vacation period later in the year.
To what extent will the logistics sector be affected?
Logistics shipping experts expect that the UPS strike, if it is short-term, will not have a devastating impact, as it did in 1997, because things have changed over the last quarter century. For example, there are more shipping alternatives.
But if the strike lasts more than a week, according to experts, it will result in empty shelves, higher prices and slower delivery of packages to customers.
In a worst-case scenario, a long-term UPS strike could cause major disruptions to the US supply chain network.
What are the available logistics options?
Shippers have more choice than they did in 1997, FedEx and several regional carriers have boomed since then, and Amazon’s logistics did not exist at the time.
Wal-Mart, Target, and other retailers have also embraced last-mile delivery for their customers, offering them options to buy and receive entirely online, or pick up their packages from nearby stores. Recently, Uber also introduced package delivery services.
“The biggest lesson from this strike was diversification,” said Cathy Roberson, president of Logistics Trends & Insights, a supply chain research firm.
a slowing economy and many consumers backing away from purchasing discretionary goods such as electronics and clothing; This means that demand is not as high as it was earlier in the Covid pandemic, and retailers also do not need to increase stocks of back-to-school supplies. In fact, many companies have secured more goods than required at the present time.
UPS revenue decreased by 6 percent in the first quarter compared to the previous year, and the company had announced last April that it expected “volume to remain under pressure.”
“If you look at the market as a whole, no one expects a rebound anymore, and from an economic perspective we’re going to have a very quiet peak season,” Roberson said.
FedEx and other shipping companies had been warning shippers for months to stay away from UPS to avoid delays from the strike.
The economic effects of a potential strike
UPS reaches about a quarter of all US packages to their final destination, according to Pitney Bowes, the global shipping and logistics company, and there is not enough capacity in the market to replace them, and its share of shipments is greater than this figure indicates, given that many Parcels received by the US Postal Service are also transported by UPS.
Overall, UPS handled an average of 18.7 million domestic packages per day in the first three months of this year.
Weighted agreement to avoid losses
Logistics experts generally expect to avoid a prolonged strike, which has devastating effects on businesses and the economy, as both sides have a lot to lose in the event of a protracted dispute.
UPS negotiators on the one hand, and union negotiators on the other, reached a preliminary agreement this week on the crucial issue of gradually installing air conditioning in its entire fleet of 95,000 delivery trucks.
“The odds of a strike are as high as they have been since 1997, but it’s still less than 50 percent,” said Alan Amling, a fellow at the University of Tennessee’s Supply Chain Institute and former UPS CEO.
(Nathaniel Myerson – CNN)
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