UPS is making major changes to its business model. To fight back, we need to understand what’s coming and why.

Building closures. Automation. Change of operations. By the middle of next year, UPS will cut the number of Amazon packages we deliver in half.

These challenges are not unique to Local 804. They are happening across the country under CEO Carol Tomé’s “better not bigger” strategy.

Tomé cares about making UPS “better” for investors, not for Teamster employees or our customers.

We need to understand what’s coming and be prepared to take action to protect our jobs.

Boosting Profit Margins by Lowering Volume?

UPS has always focused on increasing market share and delivering as many packages as possible.

The explosion of online shopping has changed that. Residential packages are the least profitable ones because the last mile of every delivery is the most expensive one.

That’s why UPS liked SurePost. They made money on sorting packages and farmed out “last mile” delivery to the post office.

Amazon has done the same thing only they have farmed out their last-mile deliveries to us.

Under so-called “Better, Not Bigger,” UPS will focus on delivering more profitable packages, even if that comes at the cost of lowering overall volume.

Overall, the company expects average daily U.S. volume to drop about 8.5% this year but revenue per package to increase by 6%.

If volume does decrease, it will mean some reduction in jobs. As members retire or leave the company, not all will be replaced.

Why Cut Amazon Deliveries?

The biggest drop in volume will come from Amazon. UPS has already been cutting the number of Amazon packages it delivers every year.

Amazon accounts for 20% to 25% of UPS’s packages in the U.S. But UPS makes less profit-per Amazon-package compared to other packages.

“Amazon is our largest customer, but it’s not our most profitable customer,” Tomé told a recent call of Wall Street analysts.

That’s why UPS will cut the number of Amazon packages we deliver in half by the middle of next year.

Amazon volume will go down, but UPS’s overall profits-per-package will go up.

Automation & Building Closures

UPS is also looking to cut costs by consolidating its network. The company plans to close 10% of its buildings, mostly small ones in rural areas and consolidate its operations in bigger, modern facilities in urban areas.

Automation will lead to some permanent job loss, especially in inside sorting work where the company is installing automated sorting technology.

Automation will not affect package car jobs.

Our contract gives us the right to monitor and negotiate over the effects of this technology, but we can’t stop it altogether.

Contract Enforcement and Union Action

Employees don’t control company business decisions about volume. Management does. But as union members, we can protect our jobs by enforcing our contract.

When there are changes of operations, we will drag the company to the table and fight for our members.

When there are layoffs, we will fight to make the company follow the contract and honor members’ seniority.

When volume drops, drivers can follow the methods and use 9.5 rights and 8-hour requests to distribute the work. There is no excuse for being a runner when members are laid off.

Inside workers can fight back by filing supervisors working grievances and enforcing their daily guarantee. No supervisors should be working when members are laid off.

Fighting for Good Union Jobs

Under Tomé, UPS wants to focus more on small business deliveries and speciality deliveries like healthcare where profit margins are higher.

If the company gets its way, these deliveries will be done by its non-union UPS Supply Chain Solutions.

UPS also bought Roadie, a subsidiary that connects businesses to drivers who use their personal vehicles to make same-day deliveries.

Part of the next contract fight needs to be fighting to make sure that these deliveries are being made by Teamster drivers making Teamster wages.

Organizing Amazon is another major challenge that we need to meet. Amazon is spreading a sweatshop business model across our industry. We need to bring their wages and standards up or we will be dragged down.

As Teamsters we have faced challenges before. CEOs come and go. Teamsters endure.

United, we will enforce our contract, defend our seniority, and fight for our future.

From organizing drives to contract campaigns, when we fight we win.

“As we face layoffs, it’s important for us to stay informed, educate ourselves and each other, and build a stronger workforce by being united.

“Support our brothers and sisters who are directly affected, enforce the contract and file 9.5 and supervisor working grievances. When we fight the good fight, we win.”

Antoine Andrews—Package Driver, Foster