Yahoo Finance UPS workers may go on strike: What it would mean for you and your packages
The last time UPS workers went on strike in 1997, FedEx and the postal service scrambled to pick up the slack as the nation's largest package delivery company slowed to a near standstill. Small businesses struggled to restock their shelves and hospitals had a hard time securing supplies, according to New York Times reporting at the time.
Consumers could face that and more if the Teamsters union and management cannot reach a new contract deal by the end of the month.
If a strike does occur, “it will be very disruptive,” said Jason Miller, interim chairperson for the Department of Supply Chain Management at Michigan State University (MSU). "The consumer is going to be much more affected getting just everyday products that we buy online."
UPS strike update: Strike not off the table
What will happen if UPS workers go on strike?
While the 1997 strike threw a wrench in the supply chain, a 2023 stoppage could have an even greater effect on consumers now that the U.S. economy is even more reliant on e-commerce.
Census data shows that less than 1% of total retail trade sales came from e-commerce in 1999, the first year the data was reported. At the beginning of this year, it was 15%. The Teamsters union has also grown since its last work stoppage, from about 185,000 members to 340,000. If a strike does take place, it would be the largest single-employer strike in U.S. history.
Even a short-lived strike could have “huge” consequences for consumers, according to Terry Esper, a logistics professor at The Ohio State University.
"They have a large network,” he said of UPS, which delivers nearly 25 million packages daily and about a quarter of all U.S. parcel volume. “Taking that kind of capacity out of the market, even for a day, will have significant ripple effects.”
Here's what consumers can expect during a strike, according to experts.
Slower delivery times
Longer wait times are to be expected during a strike as shipping carriers like FedEx and the United States Postal Service deal with an influx of packages from UPS customers. Esper said this would be especially noticeable in rural areas and among smaller retailers, which may rely more heavily on UPS as their delivery service provider.
FedEx last week said it will prioritize existing customers amid any industry disruptions, which means UPS customers switching over may have a harder time getting packages send through quickly.
"We might be looking at three to five days of longer delivery lead times in certain areas as other carriers try to handle the additional capacity," he said. "It's really a matter of how long this will last, if it does happen, and where consumers are in the market."
Big-box retailers are expected to weather the impacts of a UPS strike more easily since they use a diverse mix of delivery service providers, according to Esper.
Supply chain disruptions
Miller said spare parts for motor vehicles – which rely on shipments from wholesalers to dealerships – may be harder to get if there’s a strike. The healthcare supply chain could also take a hit since the wholesale companies that manufacture medical devices and supplies heavily rely on companies like UPS.
Other industries with dealers that rely on getting spare parts from wholesalers via UPS, including farming and construction, could also face supply chain issues.
“Consumers are not only going to be affected by stuff not showing up at their houses,” Miller said. "It would be “a new shock to a (supply chain) system that has largely reverted to pre-COVID levels.”
Higher shipping costs
A strike could also raise the cost of shipping. Even if delivery companies don't increase their rates amid a stoppage, UPS customers may need to turn to higher-priced alternatives from competitors or pay for expedited shipping amid lengthened delivery times.
It may not be "an immediate change in prices, (but) it is maybe leaning into some direct payments for more expedited shipping in order to support the delivery of really important and key things like medications," Esper said.
What can consumers do?
Miller said consumers who are planning to shop online should do it now, especially if they know the product is being shipped by UPS. If you do need to shop online during a strike, shopping in larger batch quantities can help you avoid delivery lags. Buying from companies that don't rely on UPS can also help cut down wait times.
Other shoppers should consider shopping in person or ordering pick-up to avoid delayed deliveries, a feat that should be easier to accomplish amid the warmer summer months.
"A blessing in disguise is the fact that this is summer," said Kingshuk Sinha, a supply chain and operations professor at the University of Minnesota. "We can go out and do our shopping and have that shopping experience."
This article originally appeared on USA TODAY: What a UPS strike would mean for you and your packages
