Preparing for the Worst: How to Mitigate the Impact of a UPS Service Disruption

Unless you’ve been living under an oversized shipping box lately, you’ve probably heard about the possibility of a UPS workers strike this summer. The latest contract between the Teamsters Union—of which more than 340,000 UPS workers belong to—and UPS, the world’s largest package courier, expires soon (Aug. 1). And reports say the chances of a walk-out are higher than they’ve been in decades because the company is facing strong headwinds at a time when many of its workers “are fed up,” the union’s president, Sean O’Brien, told CNN.

No one wants a strike, though, which is why representatives from both sides will head to the negotiating table Monday, April 17. Can they come to an agreement over a relatively short time frame (106 days)?

If your brand uses UPS to ship products to customers, then you’ve probably got a lot going through your mind. From the size of the bargaining window, to the chances of resolution, to the extent to which a strike could impact your business, there is no shortage of aspects around the situation to consider. Should you be concerned?

The short answer is yes … and no, according to Netrush’s Senior Director of Transportation, Sean Dougherty, whose resume also includes a 38-year stint at UPS. Read on to see his full answer to the last question above, as well as his responses to three other burning questions sure to interest brands ahead of what may be one of the most consequential summers for commerce in years.

Q: How concerned should brands that use UPS be about the possibility of a workers strike, which would be the first since 1997?

A: Brands that already have contingency plans in place with multiple carriers should be safe. Those that do not have such alternatives need to develop a contingency plan.

Q: You talk to brand leaders daily. What are some of them doing right now to prepare for a strike, should it ultimately happen?

A: Brands that don't utilize UPS haven’t given the possibility much thought, which obviously isn’t surprising. What is surprising is that those that do utilize UPS—or at least many that do—seem to be unaware of what is happening and what could happen. Brands that are aware of the negotiations are evaluating 3PLs like Netrush for support.

Q: What can be done to manage a major disruption to such a large delivery network?

A: Obviously, the other U.S. carriers (FedEx, DHL, and USPS) cannot absorb all of the UPS network volume. Other carriers will likely take what they can, but at higher cost and those arrangements will need to be made within the next 30 days. Brands that are currently utilizing a third-party warehouse solution to fulfill their orders should be able to utilize the 3PL’s carrier capacities to keep shipments moving.

Q: How can Netrush help companies that would undoubtedly feel the sting of a UPS service disruption?

A: Netrush offers 3PL warehouse fulfillment services that are not reliant on one carrier. We have multiple integrated solutions and capacity with FedEx, DHL, and USPS to execute our customers’ deliveries.

WHAT DOES ALL THIS MEAN?

In short, there’s a possibility that UPS workers could go on strike this summer, which would impact businesses and the economy. Not only would a strike disrupt supply chains, it could lead to higher shipping costs, reduced consumer spending, and, potentially, another economic slowdown.

Considering that the current contract between UPS and the Teamsters Union is due to expire in just a few months, brands that primarily use UPS to ship products to customers would be wise to begin researching and developing contingency plans.

As an ecommerce growth expert with employees who have extensive work histories with UPS, Netrush is uniquely positioned to help brands identify and implement the right plan for them. Contact us today to explore the options available to your brand should UPS workers in fact go on strike.