UPS-Teamsters Deal May Heighten Wage Pressure Across Logistics Industry
The recently ratified labor contract between UPS and the International Brotherhood of Teamsters is expected to exert wage pressure on other logistics companies, including FedEx. Under the new contract, which came into effect in August following months of negotiations, the average full-time UPS driver will earn approximately $170,000 annually in pay and benefits, up from the previous $145,000. This increase in compensation at UPS presents a challenge for logistics firms already striving to attract and retain workers in a competitive labor market, as it has led to increased interest in UPS jobs and empowered workers to demand better wages and conditions.
Rival FedEx has already announced plans to raise wages for its employees in October, though specific details regarding eligibility requirements and percentage amounts were not provided. This move by UPS and the response from FedEx underscore the growing competition for logistics workers, which has been intensified by the surge in demand for delivery services during the COVID-19 pandemic. As a result, the industry is experiencing upward pressure on wages, similar to the dynamics in the housing market, where prices remain elevated due to tight supply despite lower demand.
The union representing nearly 9,300 workers at Canada’s top two rail companies is signaling a potential work stoppage due to stalled negotiations over working conditions and wage hikes.