What happens if UPS goes on strike?

As a potential UPS workers strike becomes increasingly likely, you might be wondering what would happen to your packages as well as how a strike might affect businesses and the economy.

A strike would slow the movement of goods, which means consumers could expect package delays, higher shipping costs and, potentially, higher prices for goods. Businesses may not get hit quite as hard unless they rely on UPS — as many small businesses do.

These supply chain disruptions wouldn’t really be the same as the ones seen over the past few years during the height of the pandemic; the sooner UPS workers get a contract, the sooner packages would get moving again.

How did we get here?

Negotiations between UPS and the Teamsters union, which represents UPS workers, fell apart this week. A strike could come as early as Aug. 1, right after the union’s contract expires July 31, according to the Teamsters. If that happens, the strike would be one of the largest in U.S. history and would likely throw the U.S. delivery system into disarray.

About 340,000 UPS workers are bargaining for higher pay, the elimination of a two-tier wage system and more full-time jobs. Their demands also include improved safety and health-related working conditions as well as stronger protection against managerial harassment, according to a Teamsters news release. On June 16, 97% of UPS Teamsters voted to authorize a strike.

It’s not the first time UPS Teamsters have pushed for a better contract and working conditions. In 1997, about 185,000 UPS workers went on strike for 15 days, according to reporting at that time. The impact of that strike snarled delivery services and overwhelmed FedEx and the U.S. Postal Service (USPS). But workers won increased starting pay, more benefits and thousands of additional full-time positions.

The current contract that’s set to sunset was originally ratified in October 2018 by the Teamsters. At the time, less than half of all union members voted on the contract. Among those who did vote, a majority rejected the contract, but the contract was adopted anyway because of a technicality.

After the breakdown of negotiations Wednesday, UPS said in a news release that it was proud of what it put forward in negotiations and called on the Teamsters to return to the table. UPS said: “Refusing to negotiate, especially when the finish line is in sight, creates significant unease among employees and customers and threatens to disrupt the U.S. economy. Only our non-union competitors benefit from the Teamsters’ actions.”

UPS is second only to the USPS in market share: It holds about 24% of the shipping market, according to the Pitney Bowes Parcel Shipping Index, which tracks data on shipping carriers. Amazon is close behind UPS at 22% of the shipping market.

A new strike could cause even more widespread disruptions as Bureau of Labor Statistics data shows e-commerce has skyrocketed in the quarter century since the previous strike. In 1996, reports at the time showed that UPS handled 3.1 billion packages worldwide for the year. In 2022, UPS handled more than 6.2 billion packages globally in the year, according to the company; that’s 24 million packages on average per day.

What happens to your packages if UPS workers strike?

If UPS Teamsters strike, consumers can expect package delays — lengthy ones. That goes for item returns as well.

You could arrange to have your packages shipped by the USPS, FedEx or another carrier, but they’re likely to be overwhelmed with spillover from the UPS work stoppage.

FedEx says its priority is to protect its existing customers and is advising shippers who are considering moving their business to FedEx to do so now, according to a news release Thursday.

With the exponential rise in e-commerce over the past decade making Americans accustomed to fast, free shipping, a prolonged UPS strike could drive shoppers back to brick-and-mortar stores for at least some of their more immediate needs.

How would a UPS strike affect businesses and the economy?

A strike will likely cause a logistical mess for suppliers and businesses that rely on UPS, as it did in 1997. UPS is one of the largest delivery companies in the country, and a work stoppage could lead to supply chain lags.

Businesses may have to figure out ways around the shipping lags. It’s worth noting that Amazon has eased back from using UPS in favor of using more of its own delivery service — Amazon Logistics — and its own drivers. But the online retail giant still relies on delivery service partners like UPS, which shipped more than a billion Amazon packages in 2022. And those partners are not all happy, either: As of June 24, drivers represented by the Teamsters union at one of Amazon’s delivery service partners — Battle-Tested Strategies in California — went on strike.

Slower deliveries could lead to higher prices just as inflation has been declining. That’s because a disruption in the supply chain would mean fewer available goods for purchase and more expensive shipping — both factors that could drive up the prices for goods.

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