UPS and Teamsters union reach agreement on new contract to avoid potential strike

The agreement between UPS and the Teamsters union averts the threat of a strike that could have started next week

United Parcel Service (UPS) and the Teamsters announced Tuesday that the two sides reached a tentative agreement on a new contract that will avert the threat of a strike beginning in August.

The current UPS Teamsters collective bargaining agreement – which is the largest private sector CBA in North America – is set to expire on July 31, and union members were poised to begin a strike on August 1 if the two sides were unable to reach an agreement. The UPS Teamsters union's roughly 340,000 members voted in June to authorize a strike, with 97% of voting members in favor.

The deal comes as the two sides returned to the negotiating table on Tuesday after talks had broken down in recent weeks. UPS Teamsters will vote to ratify the new agreement next month, with electronic voting beginning on August 3 and concluding on August 22.


UPS makes a delivery in Cape Code

UPS and the Teamsters announced an agreement on a new collective bargaining agreement on Tuesday. ((Photo by Robert Nickelsberg/Getty Images) / Getty Images)

"Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers," UPS chief executive officer Carol Tomé said in a statement. "This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong." 

International Brotherhood of Teamsters President Sean O'Brien touted the "historic" deal in an appearance on FOX Business's "Cavuto Coast to Coast" as being a "tremendous victory for labor."

"We got to a deal. We leveraged our 340,000 strong members. And again, this is the largest union contract, union settlement in the history of labor," O'Brien told host Neil Cavuto. "We're very proud of what we did. And we settled and there was nothing left to get. And, you know, UPS knew that if they didn't give us what we wanted, that they would be striking themselves, and I think it's a true testament to being supported by your rank and file members, but more importantly getting a deal done." 


United Parcel Services (UPS) workers

UPS Teamsters members held practice picket lines around the country as a show of solidarity in the union's negotiations with the company. ((Photo by TIMOTHY A. CLARY/AFP via Getty Images) / Getty Images)

In a statement, O'Brien added that "UPS has put $30 billion in new money on the table as a direct result of these negotiations." The Teamsters detailed several provisions of the tentative collective bargaining agreement, which would run until 2028, in a press release:

  • Existing full- and part-time UPS Teamsters would receive a raise of $2.75 per hour in 2023, and $7.50 over the length of the contract. Full-timers would see their average top rate rise to $49 per hour, which the union says is the highest pay for U.S. delivery drivers.
  • Current part-timers would receive an immediate raise to at least $21 per hour, with seniority
  • All UPS Teamsters would receive Martin Luther King Day as a full holiday for the first time.
  • Teamsters drivers would be able to choose from two workweek schedules and couldn't be forced to work overtime on scheduled off-days.

The two sides had previously reached an agreement on other items covered by the collective bargaining agreement, including heat safety. UPS will equip in-cab air conditioning in all large delivery vehicles, sprinter vans, and package cars it purchases after January 1, 2024. All UPS cars will also get two fans and air induction vents in the cargo compartments to help keep temperatures down in the vehicles.

Ticker Security Last Change Change %
UPS UNITED PARCEL SERVICE INC. 127.68 -17.53 -12.07%

The threat of a strike by the UPS Teamsters loomed over negotiations and intensified in recent days as the expiration date of the current contract approached. 


A strike by the UPS Teamsters could've been one of the most expensive in U.S. history – an estimate by the Anderson Economic Group, a think tank that specializes in the economic impact of labor strikes, projected that the economic losses from a 10-day work stoppage could cost over $7 billion. 

This is a developing story. Please check back for updates.