The New Trucking IndustryThe UPS-Overnite combination is the face of the new trucking industry. The boundaries are blurring between the small parcel, freight, and logistics sectors. The future belongs to integrated transportation companies that are players in all aspects of the market and can offer shippers a variety of options on a one-stop-shopping basis. That’s why FedEx already has successfully integrated a less-than-truckload carrier, American Freight, and built it into a $3 billion a year company—twice as large as Overnite.
Now UPS has acquired Overnite as part of its transformation from a parcel delivery company to an integrated shipping and logistics operation with global reach.
Industry experts predict further consolidations. Many say the next company to acquire a less-than-truckload freight operation will be DHL, the third largest parcel and air freight shipper in the U.S., and a subsidiary of the German post office, Deutsche Post.
All Teamsters need to understand what lies ahead in the new trucking industry—both the threats and the opportunities.
ThreatsUPS’ acquisition of Overnite poses a threat to UPSers, freight Teamsters, and to the retirement security of all members covered by Teamster benefit plans.
The Threat to UPS Teamster Jobs: UPS reportedly told the IBT that its acquisition of Overnite won’t affect Teamster jobs. But management is telling investors a different story—namely that the company will be looking to integrate products and operations. UPS Chief Financial Officer Scott Davis told Traffic World that UPS “…will be looking for bundled solutions.” In the past, UPS tried to get shippers to break down shipments into small parcels rather than combining them into palletized loads. Soon the UPS sales force will be promoting the exact opposite, which will divert business from UPS operations into its nonunion Overnite division.
The Threat to Freight Teamsters: Overnite, a vicious union buster and our number one organizing target in freight, is now backed by the deepest pockets in the transportation industry. UPS will look to double Overnite in size, and will have the power to undercut unionized freight companies in the process.
The Threat to Our Teamster Pension Funds: UPS already got the Hoffa administration to play ball and cut benefits in our union’s largest funds. Now management is aiming to break out of our pension plans altogether in 2008. Our union needs to have the opposite goal of drawing UPS 10,000 new Overnite employees into union benefit funds. The outcome of this battle will be key to the pension security for hundreds of thousands of Teamsters.
OpportunitiesThese threats are very real. But the UPS-Overnite combination also presents the Teamsters with the opportunity to reassert ourselves as a major force in the transportation industry.
At one time, the Teamsters moved America with two million members, most of them in freight, warehousing and at UPS. A Teamster strike then had the potential of stopping the flow of goods and paralyzing the economy. That power is how we won the wages and benefits we enjoy today.
Deregulation changed the rules of the game. Nonunion companies flourished, especially in the truckload sector of freight. Our union membership declined.
Now, consolidation is the watchword of the new trucking industry. And with it, the pendulum can swing back in our union’s direction if we act decisively.
Within a few years, the trucking industry will be dominated by a small number of huge, integrated companies all competing for market share. With the exception of FedEx, our union already has a presence in each of these trucking giants: Yellow-Roadway, DHL and UPS.
But it will not be enough to represent a fraction of the employees at these integrated trucking giants. Our ability to maintain our wages and benefits—and win new gains—will depend on our union’s power to organize these companies wall to wall.
To have leverage at the bargaining table, our union must have the power to shut down a company’s operations—not a fraction of their operations.
That is why our union’s actions at UPS-Overnite are so critical. Our power to tackle this challenge will never be greater than it is right now. Our union represents more than 200,000 UPS Teamsters. The Overnite division has just 10,000 employees. UPS Logistics coupled with Overnite already diminish the power of a strike weapon. But the threat they represent is nothing compared to what they will become if they are allowed to expand as nonunion entities inside UPS. We need to act decisively now.
Organizing Overnite will protect UPS and freight Teamsters from nonunion competition, and protect our retirement security by bringing 10,000 to 20,000 new Teamsters into our pension plans. And it will do more.
Organizing Overnite will demonstrate that the Teamsters can and will organize integrated transportation companies wall to wall. Organizing the nonunion divisions of Yellow-Roadway and DHL is also critical.
UPS management understands the stakes. In conference calls, UPS’ chief financial officer referred to any possible union at the Overnite subsidiary as “third-party representation”—union busters’ favorite code for unions.
‘Hopeful’?In response, the Hoffa administration issued a limp statement saying, “We are hopeful that UPS’ long history as a company with Teamster representation will create new opportunities for Overnite workers to achieve their goals in the workplace.”
Sunny press releases won’t diminish the challenges we face. They won’t organize Overnite. And they won’t position the Teamsters to reestablish ourselves as a major force in the new trucking industry.
If the IBT leadership takes a wait-and-see attitude, the changes in the industry will pass us by and further undermine our union’s power and the wages and benefits of Teamsters in our core industries.
We can’t let that happen. Teamsters need to demand that our leadership rise to the occasion with a plan to organize, grow and win. “Teamster Power” is not a label for our union’s past. It can be our future if we’re bold enough to fight for it.
“We are hopeful that UPS long history as a company with Teamster representation will create new opportunities for Overnite workers to achieve their goals in the workplace.”
—James Hoffa, May 16 IBT statement on UPS-Overnite
“The Teamsters will never rest until workplace justice is a reality for our brave brothers and sisters at Overnite.”
—James Hoffa, August 2001 Teamster Magazine
Which is it, Mr. Hoffa: Hoping management will do the right thing, or promising a fight for workplace justice?
How about instead carrying out a plan to make it happen?
Experts agree that UPS needs to integrate a freight company into its operations. At stake is UPS position as the world’s leading transportation company.
Overnite is a $1.65 billion-a-year company. UPS plans to double Overnite’s size to compete with FedEx Freight. UPS has to make this acquisition succeed. This gives our union tremendous leverage, and we’ve got to use it to organize Overnite.
Shippers and stock analysts are closely scrutinizing the UPS-Overnite acquisition. Everyone knows that union representation at Overnite is a major issue. To be successful, we need to turn organizing rights at Overnite from an “issue” into a deal-breaker.
The Goal: A Free and Fair Choice
We know from experience that Overnite will spare no expense—and violate any law—to keep out the Teamsters in an NLRB election.
The IBT’s goal needs to be card-check recognition at Overnite with an enforceable neutrality agreement. A card-check would mean that if a majority of workers sign a Teamster card, then management would recognize the union. A neutrality agreement means that workers are free to choose whether to sign a card without a management campaign of fear and intimidation.
Campaign to Make it Happen
UPS didn’t buy Overnite to bring more members into the Teamsters union and our benefit plans. Management is only going to allow Overnite workers a free and fair choice on unionization if the alternative is worse.
What is such an alternative? A Teamster campaign that targets UPS and Overnite customers with information about Overnite employees’ right to organize. If necessary, we have to be ready to escalate to asking major shippers to drop UPS-Overnite. We may even have to target major shippers with pressure campaigns.
Of course, no one is suggesting that we launch a corporate campaign tomorrow. But preparation has to start now. Some first steps would include:
Involving Teamster members: The IBT needs to launch a major internal campaign to inform UPS and freight Teamsters on what’s at stake for the future of our union, our job security, and our pension plans. We need to start building local Overnite organizing committees of UPS and freight Teamsters that are coordinated as part of an International program.
Outreach to Overnite workers: Management will be hitting Overnite workers with all kinds of anti-Teamster, pro-Big Brown propaganda. Our union needs a worker-to-worker welcome program in place by the time of the merger this fall.
Tracking freight and building customer lists: We need to immediately start tracking freight and coordinating grievances. At first there may be little loss of volume from UPS to Overnite, but it will grow over time. We need a computerized plan that starts in every building and terminal and is coordinated nationally. As part of this program, we need to assemble a major customer list as well. This information will be worth a fortune for winning subcontracting grievances. But much more importantly, it will give us the ability put the hurt on the company if we need to.
Is this the definitive, winning plan? Of course not. But it is an outline of the kind of plan we need. A plan to win needs to come from the leaders working with UPS and freight locals, stewards and members along with Overnite workers.
No Time to WaitOrganizing Overnite cannot be put off until 2008. By that time UPS will have an ingrained and growing nonunion culture inside the brown machine, and some ready-made ability to undercut a potential strike.
Now is the time to move. Many Overnite workers are talking about their chance to get a union, since UPS already has 200,000 Teamsters under contract. We need to organize now to encourage UPS to do the right thing, by showing them the consequences of doing the wrong thing.
In the links below, we examine the consequences of this change, and what we can do to turn it to our advantage. If our union fails to take that step, we could pay a big price.
Consider just some of the challenges. Our feeder jobs are endangered, if not right away, in the long run. We need to monitor the cross-over freight, as parcels are bundled onto pallets and moved by Overnite. Will we have a strong, viable strike threat by 2008, without taking positive action now? Not if UPS has a large and growing nonunion trucking operation.
The IBT didn’t deal with unionizing UPS Logistics in the last contract, and now that failure is biting us. This new configuration could eat us alive, unless we act now. Talk over the issues with your fellow Teamsters. Start talking to Overnite workers. And start thinking about new leadership for the IBT.
The wheels of justice grind slowly, but after seven years the courts have ordered UPS to put Stimpson back to work. The exact details remain to be worked out, but Stimpson will get very considerable back pay.
On May 18, the Sixth Circuit Court of Appeals ruled, “We find substantial evidence that Stimpson was terminated in retaliation for his grievance activity.” Stimpson won at every step with the NLRB, but UPS delayed his final victory with appeals.
The preloader had filed grievances over managers doing bargaining unit work, violations of seniority for work assignments, management threats against him for being injured on the job, and more. Stimpson???s manager accused him of being a “troublemaker” and asked why he was “filing these bull-___ charges.”
Stimpson filed NLRB charges against UPS because the company failed to respond to an information request related to the workplace injuries.Stimpson says the order has him returning to work in early June at the Madison Heights, Mich., UPS hub.
He expects to get the back pay in July. He added, “We’ve got a contract—I abide by my half if they abide by theirs. They broke it and I spanked them good.”
Congratulations to Paul, and also to his lawyer, long-time TDU attorney Ellis Boal.
In June, officers and BAs attended a meeting in Chicago to discuss the international union’s plans for UPS contract enforcement. Three years into the UPS contract, it is the first such meeting held.Whether the Chicago meeting is the start of something good or just a pre-IBT election chance to politic remains to be seen. But if the IBT says they are setting a new course, we should hold them to it.
One point addressed at the meeting was the need for the grievance panels to standardize decisions and stop undercutting contract language. What mechanism will the IBT put in place to make this happen? The horse-trading of grievances and other nonsense will only stop if the International provides strong and clear leadership. At the meeting, James Hoffa and others laid the blame on local leaders, but the problems are national in scope and the key grievance panels are run by International appointees.
Information gathering was stressed as key to the IBT’s plan. They distributed a packet consisting of four sheets that locals can use to gather information from members on 9.5 (excessive overtime) grievances, supervisors working, and subcontracting. These are important problems across the country. If you don’t see this material from your local in the near future, you may want to ask about it.
The meeting was advertised as the place where plans would be put forward to deal with the issue of UPS’ growing nonunion divisions: Overnite, Logistics, feeder work subcontractors, and SCS. No such plan was put forward.
There may be more meetings and more mailings to UPS members as the campaign for IBT president heats up.
Why No Fizz in the UPS COLA?The UPS contract has a cost of living allowance (COLA), which was played up in selling the contract as the “best ever.” Why then do we never get anything out of this clause?
An examination of the details of Article 33 shows why. There are three fine-print facts to know about the clause. First, before the COLA kicks in, the inflation rate has to exceed 3 percent on a May to May yearly basis. From May 2004 to May 2005 that rate was 2.9 percent, so no COLA. Second, even if it got a little over three percent, it would still pay zero, because the formula has to get to a five cent raise or it doesn’t count. This means inflation has to exceed about 3.5 percent to get that five cent wage adjustment.
If inflation rises over 3.5 percent in the specified yearly period, we would get COLA increases, starting with that nickel an hour. If inflation would go way up, we would get more than the nickel, based on a formula which covers about one-third of inflation. Thus if inflation jumped to five percent, unlikely but always possible, we could get a 19 cent per hour COLA adjustment.
The International officials who negotiated the agreement have a superior COLA formula. They automatically get the same percentage increase in union salary that the cost of living goes up.
When Mary Plagman's doctor put her on a 25-pound weight restriction because of her pregnancy, UPS management informed her that they had no work available for her. As they have done with many other women in her position, UPS forced her off the job and onto leave under the Family and Medical Leave Act (FMLA).
Anticipating the end of her FMLA leave Plagman-Markham planned to go onto disability leave, but now UPS is challenging her ability to get even that limited protection.
Markham’s doctor put her on restricted work on Dec. 14, 2004 and she filed for disability within 30 days of that date. To prevent her from receiving disability UPS now claims that her disability date was four days earlier, on Dec. 10.
Every day I walk to the time clock to punch in. On the way, I say “hey” to a handful of loaders, sorters, and a few clerks, but rarely a driver. At my shop, solidarity between UPS drivers and part-timers is the biggest and most overlooked issue. Management deserves credit for dividing us. In response, Teamsters must do an even better job of coming together on the shop floor. We may all work at the same hub, and be covered under the same Master Agreement, but UPS has driven a wedge between part-timers and drivers. That wedge is production standards, understaffing and the company’s daily violation of our union contract.
Production Standards Pressure Workers: A Classic Example
Management always tries to get the most work out of the fewest workers. Last week was a classic example. One day the whole supply chain was backed up. The guy I usually load my trailer with was home because of an injury so we were short one. On top of that, the newest package handler was not called in. So we were down two. Of course, that day we were slammed with packages and were 20 minutes late getting the trailer loaded. If the feeder driver is late, he hears about it from the supervisor. These kinds of things happen all the time at my shop, and create a lot of tension between drivers and loaders. What can we do together to confront management and not each other?
Meeting in the parking lot, before or after your shift, is a good way to open up communication between drivers and part-timers. Talk about what it’s like to work under these standards and how supervisors often do bargaining unit work instead of hiring more workers or giving current employees more hours. This is a direct violation of our contract and we should fight it.
Full Time Jobs Mean Union Power
Where are the full-time inside jobs required by the last contract? What is the union doing about it? How do full-time inside jobs benefit drivers? If more part-timers become full-time they will be more involved in the union, making it stronger. Many part-timers view their union dues as little more than a tax. In many locals, that is sadly all they are. With delegate and international elections around the corner, it’s more important than ever to make this an issue so as to find common ground between UPS’ Teamster employees.
Your Grievance Is My Grievance
Imagine if management had to face consequences inside for grievances drivers filed and vice versa. Workers should encourage their stewards to work with each other in filing and presenting grievances—especially when they are about the same issue like supervisors doing bargaining unit work or forcing production standards.
Setting up an informal get-together, even just once a month, will give brothers and sisters a chance to talk about what’s bothering them. When a part-timer becomes a driver is a good time to build bridges between the two sets of workers. Stay in contact and have the new driver speak to other part-timers who are interested in driving. Find out if the new driver is having problems or has filed any grievances. Encourage folks to attend local meetings and especially craft meetings at your local dedicated to UPS, if you have them.
Rallying around new job creation and holding the company to what they’ve promised is a way to both unite the workforce and to improve the quality of our workdays. UPS is a billion dollar company because of the work Teamsters do on the ground every day. But still we hear rumblings about things like the nonunion competition at Fed-Ex and an alternative pension to Central States. If we’re going to fight the concessions pushed by the company and sold to us by union officers who are too cozy with management, then we need a strong, member-driven union united across classifications.
The largest employer of Teamsters will soon operate an enormous nonunion freight division. And the Teamsters’ worst nemesis in the freight industry, Overnite, will be financially backed by the most profitable transportation company in the world.
UPS-Overnite is the face of the new trucking industry in which all the big players—Yellow-Roadway, FedEx, DHL—are consolidating and positioning themselves to compete as integrated transportation companies.
Nonunion Operations to Grow?
Each of the emerging global giants has both Teamster and nonunion operations, with the exception of FedEx, which is almost entirely nonunion. Left unchecked, the nonunion operations at “Teamster” employers will grow and undermine our bargaining power, job security, and pension plans.
We can’t let that happen.
UPS-Overnite symbolizes the threat posed by the new trucking industry. But just as important, UPS-Overnite gives our union an opportunity to take on that threat and win by organizing the world’s largest integrated parcel-freight-logistics company wall-to-wall.
We have the power to do that at UPS-Overnite, setting the pattern for organizing the other trucking giants—Yellow-Roadway, DHL, and ultimately FedEx.
The stakes have never been higher. If we act decisively, the Teamsters union can reassert ourselves as a major force in the new trucking industry, restoring Teamster power, not as a slogan, but as a source of security for a new generation of Teamsters.
Click on the stories below for more information about the UPS-Overnite deal:
UPS+Overnite = Danger Ahead
What Does it Mean for Freight Teamsters?
New Threats and Opportunities
Now's the Time to Organize Overnite
Teamster Pension Funds Could be Strengthened
DHL: The Next Move?
A long hot summer has been even longer and hotter for the thousands of UPS package car drivers who contend with constant and excessive overtime.
The short-term impact of this problem on Teamsters is tremendous. Weekday family life is nonexistent. Weekends are for recovery. The long-term effects include more injuries, more accidents and difficulty making it to retirement age. TDU spoke with a number of stewards and business agents about this issue and what can be done to protect members.
"Everyone is upset,” according to Des Moines Local 90 steward Todd Hartsell. “We are seeing people who have never filed a grievance filing them now. Standards are being cut, stop counts and overtime are up.”
“Over five hundred grievances have been filed on 9.5 violations in Local 688,” St. Louis steward Gil Clark reported, referring to violations of a rule limiting how often a driver can be forced to work more than 9.5 hours a day. “On paper management says routes are 8.5 hours, but drivers are coming back in with 11 hours day after day.”
The only thing hotter than the issue of overtime is the air coming from the IBT. Hoffa announced at a June meeting that the IBT had a plan. “It almost sounded like an Amway convention,” one BA said of the meeting. “They kept saying that they had a plan and were excited and that they felt positive about getting things done.”
“All we’ve gotten from the IBT is a postcard saying they are going to take it seriously,” Local 89 steward David Thornsberry said. “They’ve got an information gathering form to use, which is fine, but we are way past the stage of needing info. UPS workers know what’s going on. Teamster officials know what’s going on. It’s time for a real plan and action, not surveys.”
The IBT is hinging its approach on the double-time penalty in the contract. Detailed wording was added in 2002 to Article 37 stating that drivers can file grievances whenever they work over 9.5 hours three or more times in a week. Two penalties were set out in the article: double time pay for hours worked over 9.5 and/or adjustment of a driver’s work schedule.
“One problem with this language,” pointed out Local 728 BA Butch Traylor, “is that the penalty is not really that hard on the company. With the penalty kicking in only after 9.5, and taking into account that you already get time and one half for those hours, it works out to maybe $7 a day as penalty, or $35 per week.”
When asked if members in one of the largest UPS locals had ever seen penalty pay, David Thornsberry responded, “We’ve seen it as much as I’ve seen a girlfriend I had back in high school who moved to Canada, and nobody has seen her.”
St. Louis is another location where the IBT is falling short. Members handed officials a powerful weapon by filing over 500 grievances on 9.5. Rather than press for quick action, the local gave UPS a 30-day period to solve the problem. That 30 days will bump right into peak season, when they can disregard overtime limits all over again. (And the local supplement provides the right to strike in certain circumstances—an additional hammer the union is choosing not to use.)
At the same time, Traylor pointed out, “UPS is increasing the stops per car. The number of stops used to be in the 90s, last year it was around 108 and this year 118. That’s about 25 stops extra, that is why we have so much overtime. Even Hoffa has admitted that the company is nearly ten percent understaffed.”
Another factor is the cutting of time allowances. UPS applies production standards even though the contract does not recognize them. The managers plan the routes on those allowances, and when they are cut, routes disappear and more work gets piled on fewer drivers.
“The Albany, Ga., center is a good example,” according to Traylor. “Two years ago there were 44 routes. Now there are 39, even though there is more volume.”
What Can Be done
Despite the IBT’s inaction members have sometimes succeeded in softening the blow of the overtime hammer.
“At the Ashbottom building.” Thornsberry explained, “we started filing tons of grievances. Just recently we got bids put up for four more drivers. A few years ago, we got 20 put on. It takes persistence.”
“To be honest,” Traylor added, “the hassle of dealing with many grievances is perhaps itself a deterrent for management.”
“Lots of members are now filing over 9.5,” Pontiac, Mich., steward Darwin Moore said. “We are getting some relief for the ones who file and even won penalty pay recently in a case that went to the panel in Chicago.
“Really, we should be shooting for an 8.5 hour day,” Traylor said, “with progressive steps to penalize the company. There should be double time after nine hours and triple time over ten hours. And it should kick in automatically, not if you file a grievance.”
This is where the IBT has failed to grasp a great opportunity. The overtime issue bumps directly into larger issues of family life, health for workers and safety for the public. Local unions and rank and file members can take some action on their own, but a national campaign would have the most impact.