FedEx, UPS Problems Could Hit Shippers In 2023

If you rely on FedEx, UPS and the USPS for distribution services — BE WARNED: the next few months and into 2023 could see FedEx Ground turning away packages, a Teamsters strike shutting down UPS, and the Postal Service taking the brunt of it as the delivery service of last resort.

Higher fuel and other rising costs are already expected to drive stiff holiday surcharges, 2023 price hikes and other increases on shippers. The USPS announced its holiday peak rates in August.

But those fuel costs and other inflation are hurting independent contractors who form the backbone of FedEx Ground. In August FedEx terminated a contract with its largest independent contractor, Patton Logistics headed by Spencer Patton, an advocate for independent contractors.

“Patton has been an outspoken advocate for the roughly 6,000 contractors that deliver packages for FedEx Ground, alleging that FedEx Ground has expanded its profit margins through proceeds from fuel surcharges without allowing contractors to share in those proceeds,” reports Truckinginfo.com.

“The conflict with contractors has been brewing for a couple of years, especially after Ground quickly moved to seven-day service, took in-house packages it had been giving to the US Postal Service for final delivery and accepted more large packages. The company also rushed to introduce a new routing software that contractors say has been trouble since the beginning. The change in payments to emphasize stops was a cut in pay, according to more than a dozen contractors,” reports Bloomberg.

UPS Strike Rumors

There is already talk of a Teamsters strike at UPS in 2023 even though negotiations for the new master contract, which expires July 31, 2023, have not begun yet (click for current master contract).

The union elected Sean O’Brien General President this year, who is willing to strike to get a better contract.

Besides compensation issues, driver safety is at the top of union’s list. In August the Teamsters gave UPS a two-week notice to provide detailed information to protect employees, combat heat illness, and install or replace badly needed relief equipment for workers amid increasingly extreme weather conditions.

“UPS executives sit inside their air-conditioned, C-suite offices all day while UPS Teamsters endure some of the most intense weather conditions imaginable, and this corporation needs to own up for what it is or is not doing to protect these workers,” said Teamsters General President Sean M. O’Brien. “The Teamsters aren’t asking for answers — we’re demanding them.”

Under the direction of O’Brien, the Teamsters are aggressively challenging management and not just at UPS. On September 6, 2022 O’Brien announced an Amazon Division for warehouse and logistics workers. The Teamsters Union is home to 1.2 million workers, including 340,000 UPS employees, most of whom perform the same roles as Amazon workers.

“For 120 years, the Teamsters have proudly and ferociously protected transportation, logistics, and delivery workers, and we refuse to allow Amazon to continue to abuse and disrespect the more than one million Americans it employs,” O’Brien said. “The Teamsters are best positioned to coordinate and secure guaranteed protections for these workers, and Amazon knows it. Our new division affords a nationwide network of resources to all Amazon workers, behind the wheel of any truck or hard at work in any facility, to strategize with the union, mobilize in their communities, and succeed together.”

UPS Statement

Regarding the upcoming start of contract negotiations, UPS issued this statement: “We want a contract that provides wins for our employees and that provides UPS the flexibility to stay competitive in a rapidly changing industry. UPS and the Teamsters have worked cooperatively for almost 100 years to meet the needs of UPS employees, customers, and the communities where we live and work. We believe we’ll continue to find common ground with the Teamsters and reach an agreement that’s good for everyone involved.”

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