SCD: UPS will have trouble passing on any Teamsters wage hikes to shippers

SUPPLY CHAIN DIVE reports:

UPS will have trouble passing off higher labor costs resulting from a new contract with the International Brotherhood of Teamsters, experts interviewed by Supply Chain Dive say.

The wider variety of alternative carriers today versus 1997 — the last time UPS Teamsters went on strike — and softer delivery demand are key reasons why. As a result, shippers have less of an appetite to accept aggressive rate hikes from UPS and others than in years past, when they were fighting for limited carrier capacity.

Right now, UPS has no rate increase to announce, a spokesperson said. The carrier periodically evaluates its prices “to ensure it reflects the value we provide,” he added.

UPS, FedEx and other carriers typically announce annual rate increases in the second half of the calendar year. Last year’s 6.9% increase from UPS cited the need to support ongoing expansion and enhance its capabilities as reasons for its implementation…

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