Outside the UPS office hub on Oregon Avenue in South Philly on Thursday morning, Teamsters 623 union members inflated a giant cartoon fat cat complete with a diamond pinky ring strangling a delivery driver.
It was a warning to UPS executives, union leaders say, that thousands of its members in the region may go on strike and shut down the package delivery supply chain if contract demands aren’t met by the end of the month.
Workers chanted “shut it down” on the sidewalk in front of the UPS office windows while organizers rallied the crowd and local officials promised to stand behind union members on the picket line.
The Teamsters represent 5,000 workers across Philadelphia, which is a major hub for UPS. The company’s drivers deliver more than 95,000 packages each day from its Philly operations.
The issue union leaders say is part-time worker pay being stuck at $15.50 to start. By comparison, a package delivery driver can earn $40 an hour.
“Come August 1st, if we don’t have an agreement, we are going to be on the side of the road,” said Richard Hooker, secretary treasurer of Teamsters Local 623. “Nothing moves unless the Teamsters move it.”
More than 340,000 UPS workers nationwide are poised to go on strike — the largest in U.S. history since the last UPS strike in 1997.
But the rise of internet shopping and shipping has ballooned the number of packages customers expect to be delivered each day since the 1990s. And the marketing promise of free shipping has accelerated demand while companies still pay those costs for delivery.
While competitors like FedEx have been trying to capture customers from UPS with the threat of the strike, logistics experts say there’s no way the existing system could absorb all of the packages.
UPS delivers about one third of all packages nationwide each day.
“There’s not enough spare capacity in those other networks to pick that up,” said Steve Tracey, a supply chain professor at Penn State University and director of a research center. “So things would slow down. Deliveries would be delayed, packages would not either be able to shipped or would or wouldn’t arrive. And the system would kind of get bogged down in general.”
Labor shortages for truck drivers has meant upward pressure on wages for years, Tracey said.
“There’s a shortage of workers both in fulfillment operations as well as in trucking,” he said.
Philadelphia is a major hub for UPS with operations at the Philadelphia International Airport and ground transportation along Oregon Avenue.
Roughly 45% of the U.S. population is within a 10-hour drive of the Philadelphia region, said Zach Zacharia, a professor and executive director of a supply chain research center at Lehigh University.
“Philadelphia does have a significant role to play as part of the overall UPS hub,” Zacharia said.
In the meantime, many companies are weighing their options to stop using parcel delivery and instead rent entire tractor trailers if possible since freight rates are relatively low, he said.
“If you could order more you wouldn’t have to use UPS, companies are looking for alternative ways to get products,” he said.
UPS declined an interview and submitted a statement to WHYY News.
“We are pleased to be back at the negotiating table next week to resolve the few remaining open issues,” according to the statement. “We are prepared to increase our industry-leading pay and benefits but need to work quickly to finalize a fair deal that provides certainty for our customers, our employees and businesses across the country.”
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