A 10-day UPS strike could be the costliest in US history

Jul 14, 2023, 10:56 AM

UPS workers go through a rehearsal of a pending strike at the UPS facility in Longwood, Florida. (J...

UPS workers go through a rehearsal of a pending strike at the UPS facility in Longwood, Florida. (John Raoux/AP via CNN)

(John Raoux/AP via CNN)

New York (CNN) — A 10-day UPS strike could cost the U.S. economy $7.1 billion. That could make it the costliest work stoppage ever in U.S. history, according to an estimate from a Michigan economic research firm that studies the costs of labor disruptions.

The estimate from Anderson Economic Group said the hit to businesses and consumers would be $4.6 billion by itself, causing “significant and lasting harm for small businesses, household workers, sole practitioners, and online retailers across the country.”

Other costs include estimated direct losses at UPS of $816 million, as well as $1.1 billion in lost wages by 340,000 members of the Teamsters union at the company. The remaining costs would be born by UPS suppliers and from lost tax revenue.

The union has said it will go on strike August 1 without an agreement on a new contract. Talks broke off last week with both sides accusing the other of walking away from the table.

The Teamsters union did not have an immediate comment on the study. It has said in the past that if there is a strike it will be the fault of the company for not stepping up and agreeing to the economic package being sought by the union despite having its earnings nearly double during the life of the current five-year contract.

UPS said that it won’t comment on third-party research and that it is still hopeful of reaching an agreement with the union to avoid a strike.

“Our focus is on negotiations rather than speculation,” said UPS spokesman Glenn Zaccara. “We remain confident that we will reach an agreement that is a win for our employees, our company and customers, and the union.”

UPS did say Friday that it has started to train its nonunion U.S. workers, including managers to help continue at least some of the company’s operations if there is a strike. UPS has nearly 100,000 nonunion employees in the United States as of the end of last year.

“While we have made great progress and are close to reaching an agreement, we have a responsibility as an essential service provider to take steps to help ensure we can deliver our customers’ packages if the Teamsters choose to strike,” said a statement from the company.

UPS handled an average of 20.8 million U.S. packages a day last year. It would only be able to handle a fraction of that volume if there is a strike, said Satish Jindel, president of ShipMatrix, a software provider that works with the parcel shipper. But he said that UPS will concentrate on trying to deliver international shipments and high-value expedited shipments.

Asked if nonunion employees have been told they can’t schedule vacations starting August 1, Zaccara said, “We are asking management employees to be at the ready, should we need them.”

UPS has had only one national strike in its history, a 16-day strike in 1997 by the Teamsters. During that strike it essentially shutdown all U.S. operations and did not try to make deliveries. Back then the company had 180,000 Teamster-represented employees during that strike, slightly more than half the numbers it has now, and it was far less central to the US economy, said Patrick Anderson, president of Anderson Economic Group.

“It wasn’t a tech-centric economy built around small package delivery then,” said Anderson.

Anderson said estimates of the cost of earlier strikes goes back only 100 years, and that this would be the costliest he could find in that time frame. The $7.1 billion cost estimates would nearly double the $4.2 billion total economic hit of the costliest recent strike, the 2019 strike at General Motors. And that strike lasted six weeks, not just 10 days.

He said that the cost of the strike would be limited if it only lasts a couple of days, but would increase rapidly after that.

“The damage clearly grows day by day,” he said.

The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

KSL 5 TV Live

National News

President Joe Biden speaks, Saturday, July 13, 2024, in Rehoboth Beach, Del., addressing news that ...

Emma Keddington, KSL NewsRadio

‘It’s time to cool it down,’ says Biden in the wake of campaign rally shooting

President Joe Biden addressed the country Sunday night, saying there should be no toleration for any kind of political violence in the wake of the assassination attempt on former president Donald Trump. 

9 hours ago

The tail section of former President Trump's airplane is seen on arrival to the Milwaukee Mitchell ...

The Associated Press

Donald Trump arrives in Milwaukee for RNC after assassination attempt heightens security fears

Former President Donald Trump has arrived in Milwaukee for the Republican National Convention a day after he was targeted in an attempted assassination at a campaign event.

10 hours ago

Law enforcement officers gather at the campaign rally site for Republican presidential candidate fo...

Pamela Brown and Shoshana Dubnow, CNN

Local officer tried to stop gunman on rooftop, but was unable to engage him, Butler County sheriff says

A local police officer saw the gunman on the rooftop during former President Donald Trump’s Pennsylvania rally on Saturday but was unable to engage him, Butler County Sheriff Michael T. Slupe told CNN’s Pamela Brown on Sunday.

13 hours ago

U.S. Secret Service agents converge to cover Republican presidential candidate former President Don...

Julie Carr Smyth, Jill Colvin, Colleen Long, Michael Balsmo, Eric Tucker and Michelle L. Price, The Associated Press

FBI says it has not determined a motive for assassination attempt on former President Donald Trump

BUTLER, Pa. (AP) — On the heels of an attempt to kill him, former President Donald Trump called Sunday for unity and resilience as shocked leaders across the political divide recoiled from the shooting that left him wounded but “fine.” A former fire chief attending the rally with family was killed, as was the gunman. Two other […]

13 hours ago

Police snipers return fire after shots were fired while Republican presidential candidate former Pr...

Whitney Wild, Evan Perez and Tierney Sneed, CNN

Secret Service faces serious questions about security footprint and rooftop access at Trump event

In the wake of the attempted assassination of Donald Trump, there are growing questions about how a sniper was able to obtain rooftop access roughly 150 yards from the former president’s position at the podium at an outdoor rally.

15 hours ago

Boyd Matheson follows the latest details after an attempted assassination was made on former Presid...


Sunday Edition: The attempted assassination of former President Donald Trump

Boyd Matheson sits down for a special episode of Sunday Edition following the attempted assassination of former President Donald Trump.

16 hours ago

Sponsored Articles

young male technician is repairing a printer at office...

Les Olson

Unraveling the dilemma between leasing and buying office technology

Carefully weigh these pros and cons to make an informed decision that best suits your business growth and day-to-day operation. 

A kitchen in a modern farmhouse....

Lighting Design

A room-by-room lighting guide for your home

Bookmark this room-by-room lighting guide whenever you decide to upgrade your lighting or style a new home.

Photo courtesy of Artists of Ballet West...

Ballet West

The rising demand for ballet tickets: why they’re harder to get

Ballet West’s box office is experiencing demand they’ve never seen before, leaving many interested patrons unable to secure tickets they want.

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 internet safety tips for kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why printer security should be top of mind for your business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

A 10-day UPS strike could be the costliest in US history