Delivery Services

Latest story

125 Shares129 Views

DHL Workers at Kentucky Air Cargo Hub Go on Strike

by

Workers who load and unload cargo planes at DHL’s hub near Cincinnati walked out after months of negotiations failed to produce a contract.More than 1,100 workers at DHL Express’s global air cargo hub at the Cincinnati/Northern Kentucky International Airport went on strike on Thursday after months of failed negotiations with the parcel carrier.A group of DHL workers at the hub who load and unload planes voted in April to unionize with the International Brotherhood of Teamsters, which has been in contract negotiations with the company since July. The union has filed more than 20 unfair labor practice complaints with the National Labor Relations Board since then, accusing the company of retaliation against organized workers. Teamsters Local 100, which represents the unionized workers, voted to authorize a strike on Sunday.“The company forced this work stoppage, but DHL has the opportunity to right this wrong by respecting our members and coming to terms on a strong contract,” Bill Davis, president of Local 100, said in a statement.DHL Express is the U.S. unit of the world’s largest logistics company, Deutsche Post, but accounts for only 2.3 percent of the market in the United States in package volume, according to the Pitney Bowes Parcel Shipping Index. As a German company, it is not able to ship between domestic airports within the United States, so it has to contract out those services and instead focuses on handling international shipments.A DHL spokesman said the company “was fully prepared for this anticipated tactic and has enacted contingency plans” like redirecting shipments to avoid Cincinnati and adding replacement staff members.The company noted that roughly 4,000 employees at the facility were still on the job. It said it did not “anticipate any significant disruptions to our service performance.”“Unfortunately, the Teamsters decided to try and influence these negotiations and pressure the company to agree to unreasonable contract terms by taking a job action,” the company spokesman said in a statement.The DHL strike comes at a time of increased tensions in the industry between companies and organized labor.On Thursday, the Teamsters threated to strike at a United Parcel Service facility in Louisville, Ky., accusing the company of engaging in “similar practices to disrespect and abuse our members in the same state” by laying off administrative workers who had just voted to unionize. The union threatened to strike at UPS as well if it “doesn’t get its act together” by Monday.UPS narrowly averted a strike over the summer after contentious negotiations with the Teamsters, which threatened to halt operations for the country’s largest parcel service.The facility where DHL workers are striking is directly in front of Amazon’s Air Hub, where a unionization effort is underway. Workers there have accused Amazon of illegally impeding organizing efforts. More

More stories

  • 113 Shares149 Views

    in Economy

    Retailers’ Seasonal Hiring Plans Signal a Cooling Labor Market

    by

    After scrambling to fill out work forces in recent years, many companies are reporting more modest goals for temporary employment.As the most important selling season for retailers approaches, job applicants may feel a chill.Macy’s and Dick’s Sporting Goods plan to hire fewer seasonal workers after a surge in the past two years, when shoppers thronged to stores after pandemic lockdowns and employers struggled to keep up. Many retailers have dropped the incentives they used over the past few years to bring workers in the doors, such as signing or referral bonuses and steeper employee discounts.The career site Indeed said that searches for seasonal jobs were up 19 percent from last year, but that listed positions were down 6 percent. Companies helping businesses find temporary workers note that major retailers have been slower to release hiring plans this year. And on Indeed, fewer job postings are described as urgent needs.Seasonal hiring helps retailers handle the increased shopping during the fourth quarter, often referred to as “peak season.” Sales in November and December can account for a quarter of some retailers’ annual revenue. In the weeks leading up to Christmas, foot traffic in stores and online shopping are usually at their height.Early estimates point to an increase in retail spending this holiday season, but not at the fast pace of recent years.Some economists and consultants see the trends in hiring and pay as a sign that the red-hot labor market of the past couple of years has cooled. Retailers’ work forces, unsteady throughout the Covid-19 pandemic, are starting to stabilize. As inflation erodes shoppers’ budgets and confidence — and savings from pandemic relief programs are drawn down — the hiring plans may be part of a cautious approach that extends to inventories and sales projections.“The seasonal hiring market looks a whole lot more like 2019 than those pandemic bounce-back years,” said Nick Bunker, director of North American economic research for Indeed. “I really do think this is emblematic broadly of what we’re seeing in the U.S. labor market, where demand for workers overall is fairly strong but down from where it was in the last year and a half.”Macy’s is aiming to hire 38,000 workers, 3,000 below its 2022 plan. In 2021, Macy’s said it aimed to hire 76,000 people — in both permanent roles and seasonal jobs — during the holiday season. Of those positions, 48,000 were temporary.Dick’s said it would hire up to 8,600 seasonal workers, down from targets of 9,000 last year and 10,000 in 2021 — and up only slightly from 8,000 in 2019.“The seasonal hiring market looks a whole lot more like 2019 than those pandemic bounce-back years,” said Nick Bunker, an economic researcher at Indeed.Nam Y. Huh/Associated PressTarget and United Parcel Service plan to hire the same number of workers as last year, about 100,000 each. In a statement, Target said its seasonal associates would supplement the hiring it had done throughout the year to staff up its stores and supply chain facilities.“This year, we are starting the season with stability in our work force and a continued commitment to scheduling flexibility for our team, which has helped us retain team members and create a more experienced work force,” the company said in a post on its blog.Walmart, the nation’s biggest retailer, echoed that sentiment.“I’m also excited that we’re staffed and ready to serve customers this holiday season,” Maren Dollwet Waggoner, senior vice president of people at Walmart U.S., said in a post on LinkedIn. “We’ve been hiring throughout the year to be sure we’re ready to serve customers however they want to shop.”A Walmart spokeswoman added that if a store had additional staffing needs during the holiday season, it would offer extra hours to current employees before looking externally. Walmart did not say how many seasonal workers it planned to hire this year, as it did in years past. (In 2022, it said it was looking to fill 40,000 seasonal positions, including truck drivers and call center workers.)Amazon is a notable exception, saying it will hire more seasonal workers this year — 250,000, up from 150,000 last year. It also said that a $1.3 billion investment would bring the average hourly wage of those jobs to more than $20.50 and that it would still offer signing bonuses in some locations.Matching staffing to demand helps ensure that retailers eke out as many sales as they can.Seasonal workers are “the folks that are on the front lines of their business,” said John Long, North America retail sector leader at the consulting firm Korn Ferry, adding that aside from a store’s inventory, they “are going to be the make-or-break piece of the equation of whether the retailer makes their numbers or they don’t.”Amazon said it planned to hire 250,000 seasonal workers, up from 150,000 last year.Karsten Moran for The New York TimesAfter paring their work forces during the worst of the pandemic, employers in the retail and hospitality industries scrambled to fill open positions as workers sought more flexibility, switched companies frequently or stood on the sidelines. To get back to prepandemic staffing, retailers have used evergreen requisitions — continually displayed postings advertising essential roles that often need to be filled — and have started hiring seasonal workers as early as August.They have also given more hours to part-time workers and relaxed qualifications. To reduce turnover, many companies have bumped up their base wages for hourly positions.These factors have complicated the explanation for reduced seasonal hiring this year, said Melissa Hassett, a vice president at Manpower Group who works with large retailers, logistics and distributors across the country.“If you’re always hiring, you’re just not going to see an increase in postings happen very often,” she said. “So sometimes when you look at the increase in postings for retail it’s not as accurate as you think it is.”But there is also a feeling that the leverage of retail job applicants will fade.“In the past it felt like the workers had a lot more upper hand in terms of being able to demand what they need,” Yong Kim, founder of the staffing platform Wonolo, said. That dynamic has changed, especially for temporary positions.“There is definitely more tightening around companies wanting to hold off on hiring unless they really need to” and waiting to see how the fourth quarter pans out, Mr. Kim said. More

  • 100 Shares129 Views

    in Economy

    UPS Workers Avert Strike by Approving New Contract

    by

    The vote by members of the Teamsters union removes a potential threat to the economy.Averting a strike that could have shaken the U.S. economy, the union representing more than 300,000 United Parcel Service employees announced Tuesday that its members had ratified a new labor agreement with the shipping giant.The union, the International Brotherhood of Teamsters, said that its UPS members approved the five-year contract with more than 86 percent support.The Teamsters have said that the agreement includes wage gains of at least $7.50 an hour for current employees over its five-year term. It also raises the minimum pay for part-time workers to $21 an hour from under $17, and raises the top rate for full-time delivery drivers to about $49 on average.Under the previous contract, which expired on Aug. 1, full-time drivers made an average of about $42 an hour after four years on the job.In a statement, the union’s president, Sean O’Brien, said the contract was the most lucrative ever at UPS and would serve as a model for other workers that the union is seeking to organize. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention,” Mr. O’Brien said.The Teamsters have made unionizing Amazon a top priority in recent years, and Mr. O’Brien said while running for the union’s presidency in 2021 that doing so would first require big, concrete gains at other companies.Despite the ratification, the new UPS contract will not take effect immediately. The union said in its statement that a group of workers in Florida voted down a supplement to the national contract that covers about 175 members — one of 44 supplements that the union also negotiated.The union said its negotiators would immediately meet with UPS to resolve the remaining issues so that those Florida members can vote again. The national contract will take effect once the supplement is approved.UPS declined to comment beyond a brief news release noting the ratification vote and stating that the Florida supplement would be “finalized shortly.”The Teamsters had been aggressive in mobilizing members and ratcheting up pressure on the company in recent months, including picket-line practice and training sessions for strike captains. Mr. O’Brien has frequently referred to corporate leaders as a “white-collar crime syndicate” and argued that “this multibillion-dollar corporation has plenty to give American workers — they just don’t want to.”UPS moves about one-quarter of the tens of millions of packages shipped in the United States each day, according to the Pitney Bowes Parcel Shipping Index. Its adjusted net income rose more than 70 percent from 2019 to last year, reaching more than $11 billion.The negotiations on a national contract began in April, and the union announced in mid-June that its members had voted overwhelmingly to authorize a strike.The two sides resolved many key issues by early July, including eliminating a lower-paid category of full-time driver that had angered many UPS employees, and requiring air conditioning in new trucks to improve heat safety. But then negotiations broke down, with the Teamsters arguing that the company had not offered sufficient improvements in pay for part-time workers, who make up more than half of the union’s UPS members.Mr. O’Brien and the union spent the next few weeks condemning what they sometimes referred to as “part-time poverty” jobs, before the sides resumed negotiating in late July and quickly finalized a tentative deal.UPS employees represented by the union began voting on the agreement in early August. While some part-time workers continued to argue that the wage gains should have been even larger and urged a “no” vote, the final margin suggested that most were satisfied with the deal. More

  • 125 Shares99 Views

    in Economy

    UPS and Teamsters Reach Tentative Deal to Head Off Strike

    by

    United Parcel Service faced a potential walkout by more than 325,000 union members after their five-year contract expires next week.United Parcel Service announced Tuesday that it had reached a tentative deal on a five-year contract with the union representing more than 325,000 of its U.S. workers, a key step in averting a potential strike.The union, the International Brotherhood of Teamsters, reported in June that its UPS members had voted to authorize a walkout after the expiration of the current agreement on Aug. 1, with 97 percent of those who took part in the vote endorsing the move.UPS handles about one-quarter of the tens of millions of packages that are shipped daily in the United States, and the strike prospect has threatened to dent economic activity, particularly the e-commerce industry.Representatives from more than 150 Teamster locals will meet on Monday to review the agreement, and rank-and-file members will vote on it from Aug. 3 to Aug. 22, according to the union.Negotiations had broken down in early July, largely over the issue of part-time pay, before resuming Tuesday morning.“We demanded the best contract in the history of UPS, and we got it,” the Teamsters president, Sean M. O’Brien, said in a statement. “UPS has put $30 billion in new money on the table as a direct result of these negotiations.”The company said it could not comment on the dollar value of the deal ahead of its second-quarter earnings call in early August.The Teamsters said that under the tentative agreement, current full- and part-time UPS employees represented by the union would receive a $2.75-an-hour raise this year, and $7.50 an hour in raises over the course of the contract.The minimum pay for part-timers will rise to $21 an hour — far above the current minimum starting pay of $16.20 — and the top rate for full-time delivery drivers will rise to $49 an hour. Full-time drivers currently make $42 an hour on average after four years.The company has also pledged to create 7,500 new full-time union jobs and to fill 22,500 open positions, for which part-time workers will be eligible. The company has said that part-time workers are essential to navigating bursts of activity over the course of a day and during busy months, and that many part-timers graduate to full-time jobs.“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,” Carol Tomé, the company’s chief executive, 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.”The union had cited the company’s strong pandemic-era performance, with net adjusted income up more than 70 percent last year from 2019, as a reason that workers deserved substantial raises.It had especially emphasized the need to improve pay for part-timers, who account for more than half the U.S. employees represented by the Teamsters, and who the union said earn “near-minimum wage” in many areas.The path to the agreement appeared to be paved weeks ago after the two sides resolved what was arguably their most contentious issue, a new class of worker created under the previous contract.UPS had said the arrangement was intended to allow workers to take on dual roles, like sorting packages some days and driving on other days, especially Saturdays, as a way to keep up with growing demand for weekend delivery.But the Teamsters said that the hybrid idea was never actually carried out, and that in practice the new category of workers drove full time Tuesday through Saturday, only for less pay than other drivers. The company said that, under the previous contract, the Saturday drivers made about 87 percent of the base pay of other drivers and that some workers did work in a dual role.Under the tentative agreement, the lower-paid category of drivers will be eliminated, and workers who drive Tuesday through Saturday will be converted to regular full-time drivers.The deal also stipulates that no driver will be required to work an unscheduled sixth day in a week, which drivers had at times been forced to do under the existing contract to keep up with Saturday demand.The two sides also agreed on several key noneconomic issues, such as heat safety. Under the proposed deal, new trucks must have air-conditioning beginning in January, while existing trucks will be outfitted with additional fans and venting.Whether it passes will partly be a political test for Mr. O’Brien, who was elected to head the Teamsters in 2021 while regularly criticizing his predecessor, James P. Hoffa, as being too accommodating toward employers and toward UPS in particular.Mr. O’Brien argued that Mr. Hoffa had effectively forced UPS workers to accept a deeply flawed contract in 2018, even after they voted it down, and accused his Hoffa-backed rival of being reluctant to strike against the company.Since taking over as president last year, he has frequently said the union would be aggressive in pressuring UPS and suggested on several occasions that a strike was likely.A few days before the agreement on eliminating the hybrid worker position, Mr. O’Brien said in a statement that the Teamsters were walking away from the table over an “appalling counterproposal” and that a strike “now appears inevitable.”The company sought to reassure customers and the public that a deal would be consummated despite the occasionally heated pronouncements.On an earnings call in April, the UPS chief executive, Ms. Tomé, said that the two sides were aligned on many key issues and that outsiders should not be distracted by the “great deal of noise” that was likely to arise in the run-up to a deal.The deal, if ratified, removes a serious threat to the U.S. economy. Economists say a strike by UPS employees would have made it harder for businesses to ship goods on time, and the resulting restrictions in supply chains would probably have stoked inflation just as it had shown signs of easing.“It would have been devastating to the economy, just given the size and scale of UPS,” said Mike Skordeles, head of U.S. economics at Truist Advisory Services. “You can’t just pull out a player that big without causing disruption and prices to go up.”A 10-day UPS strike would cost the U.S. economy about $7 billion, according to an estimate from the Anderson Economic Group.Small businesses were most at risk from a strike as UPS might be their sole or primary shipping provider, meaning they would have to scramble for alternatives. Large retailers tend to have more diversified delivery providers and are more likely to have contingency plans to soften the blow.Mr. O’Brien had explicitly asked President Biden, who has called himself “the most pro-labor union president,” not to get involved in the negotiations. A group of over two dozen Democratic senators also pledged not to intervene.The Biden administration helped broker a deal that headed off a freight rail strike last year. Many union members involved in that dispute saw the deal as leaning too heavily in favor of the major rail carriers.In 1997, about 185,000 UPS workers staged a strike for 15 days. That time, the company reported that the strike cost it more than $600 million. But the last strike happened when e-commerce was in its infancy. UPS has benefited from the e-commerce boom: In 2022 it reported more than $100 billion in revenue, compared with $31 billion in 2002.J. Edward Moreno More

  • 163 Shares139 Views

    in Economy

    UPS Contract Talks Go Down to the Wire as a Possible Strike Looms

    by

    With the Teamsters contract set to expire Aug. 1, pay for part-time workers is a major hurdle. A walkout could rattle the U.S. economy.Barely a week before the contract for more than 325,000 United Parcel Service workers expires, union and company negotiators have yet to reach an agreement to avert a strike that could knock the American economy off stride.UPS and the union, the International Brotherhood of Teamsters, have resolved a variety of thorny issues, including heat safety and forced overtime. But they remain stalemated on pay for part-time workers, who account for more than half the union’s workers at UPS.A strike, which could come as soon as Aug. 1, could have significant consequences for the company, the e-commerce industry and the supply chain.UPS handles about one-quarter of the tens of millions of packages that are shipped daily in the United States, according to the Pitney Bowes Parcel Shipping Index. Experts have said competitors lack the scale to seamlessly replace that lost capacity.The Teamsters have cited the risks its members took to help generate the company’s strong pandemic-era performance as a reason that they deserve large raises. UPS’s adjusted net income rose more than 70 percent between 2019 and last year, to over $11 billion.The contract talks broke down on July 5 in vituperation. The two sides are to resume negotiations in the coming days, but the window for an agreement before the current five-year contract expires is tight.In a Facebook post this month, the union said the company’s latest offer would have “left behind” many part-timers, whose jobs include sorting packages and loading trucks. The post said part-timers earned “near-minimum wage in many parts of the country.”UPS, which says it relies heavily on part-timers to navigate bursts of activity over the course of a day and to ramp up its work force during busier months, said it had proposed significant wage increases before the talks broke down. According to the company, part-timers currently earn about $20 an hour on average after 30 days as well as paid time off, health care and pension benefits. The company noted that many part-timers graduated to jobs as full-time drivers, which pay $42 an hour on average after four years.The union has gone out of its way to highlight the challenges facing part-time workers. In television interviews and at rallies, the Teamsters president, Sean O’Brien, has emphasized what the union calls “part-time poverty” jobs. He has frequently been joined by leaders of other unions and politicians, including Representative Alexandria Ocasio-Cortez, the New York Democrat.UPS said Wednesday that it was “prepared to increase our industry-leading pay and benefits.” But it is unclear if the company will satisfy the union’s demands.“UPS certainly wants to reach an agreement, but not at the expense of its ability to compete long-term,” said Alan Amling, a former UPS executive and a fellow at the University of Tennessee’s Global Supply Chain Institute.Professor Amling estimated that it would cost the company $850 million per year to increase wages $5 an hour for all part-time employees represented by the Teamsters.The company, which normally reports its second-quarter earnings in late July, has delayed the report this year until after the strike deadline. UPS said that the timing was within the required window for reporting its earnings and that it had never published a date other than Aug. 8 for the coming release.The sometimes-volatile negotiations began in April, and the Teamsters announced in mid-June that their UPS members had voted, with a 97 percent majority, to authorize a strike.Less than two weeks later, the union said that it was walking away from the table over an “appalling counterproposal” from the company on raises and cost-of-living adjustments and that a strike “now appears inevitable.”The two sides resumed their discussions the week before the Fourth of July and soon resolved what was arguably their most contentious issue: a class of worker created under the existing contract.UPS said the arrangement was intended to allow workers to take on dual roles, like sorting packages some days and driving on other days — especially Saturdays — to keep up with growing demand for weekend delivery.UPS handles about one-quarter of the tens of millions of packages that are shipped daily in the United States.Maansi Srivastava/The New York TimesBut the Teamsters said that the hybrid idea hadn’t come to pass, and that in practice the new category of workers drove full time Tuesday through Saturday, only for less pay than other drivers. (The company said some employees did work under the hybrid arrangement.)Under the agreement reached this month, the lower-paid category would be eliminated and workers who drove Tuesday through Saturday would be converted to regular full-time drivers.That agreement also stipulated that no driver would be required to work an unscheduled sixth day in a week, which drivers had at times been forced to do to keep up with Saturday demand.Despite progress on these issues, Mr. O’Brien could face a delicate test persuading members to approve a deal if it falls short of the lofty expectations he helped set. He won the union’s top position in 2021 while regularly criticizing his immediate predecessor, James P. Hoffa, for being too accommodating toward employers.Mr. O’Brien argued that Mr. Hoffa had effectively forced UPS workers to accept a deeply flawed contract in 2018, even after they voted it down, and accused his rival in the race to succeed Mr. Hoffa of being reluctant to strike against the company.He began focusing members’ attention on the contract and a possible strike even before formally taking over as president in March last year, and has spoken in superlative terms about the union’s goals for a new contract.“This UPS agreement is going to be the defining moment in organized labor,” he told activists with Teamsters for a Democratic Union, a group that backed his candidacy, in a speech last fall.The union under Mr. O’Brien has held training sessions in recent months for strike captains and contract action team members, who rally co-workers to help pressure the company.And he has strongly urged the White House not to wade into the contract negotiation. In his Boston youth, “if two people had a disagreement, and you had nothing to do with it, you just kept walking,” he said during a recent webinar with members. “We echoed that to the White House on numerous occasions.” (Administration officials have said they are in touch with both sides.)In some ways the context for this year’s negotiations resembles the circumstances of the nationwide Teamsters strike at UPS in 1997. UPS was also in the midst of several profitable years, and the rapid growth in its part-time work force loomed large.Sean O’Brien, the Teamsters president, right, at the Los Angeles rally. He was elected in 2021 after criticizing his predecessor as having been too accommodating toward employers.Jenna Schoenefeld for The New York TimesBut while a reformist president, Ron Carey, had mobilized the union for a fight, its ranks appeared divided between his supporters and those of Mr. Hoffa, who had narrowly lost an election for the union’s presidency the year before. The union may have more leverage this time because its members appear far more unified under Mr. O’Brien.Barry Eidlin, a sociologist at McGill University in Montreal who studies labor and follows the Teamsters closely, said that while the ramp-up to the current contract fight had lagged in some parts of the country, where more conservative local officials are less enthusiastic, Mr. O’Brien had no serious opposition within the union.“Not everybody is a fan of O’Brien, but they’re not actively organizing to undermine him the way people were with Ron Carey in the ’90s,” Dr. Eidlin said. “It’s a huge, huge difference.”Still, for all his pugilistic statements, Mr. O’Brien remains an establishment figure who appears to prefer reaching a deal to going on strike, and he has subtly acted to make one less likely.Earlier in the negotiations, Mr. O’Brien had said that UPS employees wouldn’t work beyond Aug. 1 without a ratified contract, and that the two sides needed to reach a deal by July 5 to give members a chance to approve it in time. But last weekend he said UPS employees would continue working on Aug. 1 as long as the two sides had reached a tentative deal.“This isn’t a shift,” a Teamsters spokeswoman said Friday by email. “This is how you get a contract. Our pressure and deadline on UPS forced them to move in ways they hadn’t before.”Niraj Chokshi More

  • 125 Shares149 Views

    in Economy

    Looming UPS Strike Spurs Some Companies to Rethink Supply Chains

    by

    Businesses around the country are facing what could be the latest disruption to how they get their goods to their customers in a timely and affordable fashion.Kathryn Keeler and her husband, Stuart de Haaff, own an olive oil company in the hills of central California. The couple spend their days harvesting olives, bottling the oil, labeling the glass bottles and shipping them out, relying primarily on UPS to get their product to kitchens throughout the United States. They are far from alone. UPS handles about a fourth of packages shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index, many of them for small businesses like Ms. Keeler’s company, Rancho Azul y Oro.But with the labor contract between UPS and 325,000 of its workers expiring at the end of the month and a potential strike looming, business owners around the country are facing what could be the latest in a series of supply chain disruptions they have confronted since the start of the pandemic.Some are pre-emptively turning to FedEx, the next largest private carrier in the United States, or the Postal Service. Others are calling their third-party shippers — firms that work with the likes of UPS, FedEx and DHL to handle their clients’ shipping needs — to ensure that their packages can still get to their final destinations even if there is a strike.The logistical challenge is just one more burden on businesses that have been stretched thin over the past few years.“Maybe a larger business can withstand those types of situations,” Ms. Keeler said. But as small-business owners, she and her husband “don’t have a lot of extra time in our day to be on the phone with the post office or FedEx.”Since 2020, the pandemic has strained the global supply chain in a number of ways. E-commerce reached record levels as stuck-at-home Americans bought clothes, furniture, workout equipment and groceries online. Companies had to navigate Covid-related shutdowns at factories in China and Vietnam. There were worldwide delays when a large container ship got stuck in the Suez Canal, leading to containers piling up at the Port of Los Angeles. Those situations affected the way goods came into the United States.A UPS strike could hobble the way brands move their wares domestically.“This is something that affects us on our home turf, and how do we solve for that?” said Ron Robinson, the chief executive of BeautyStat Cosmetics, which uses UPS to ship its skin care products to retailers like Ulta and Macy’s.One strategy that his team will lean on is trying to bundle packages, sending as many as it can out at once, he said.Switching to another carrier is going to cost some companies.Ryan Culver, the chief executive of Platterful, a monthly charcuterie board subscription service, also uses UPS. Switching over to FedEx Express — necessary to ensure that the meats in his packages reach consumers in time — would cost about $5 to $10 more per delivery.Using FedEx to ship goods can sometimes be more costly for small businesses.Hunter Kerhart for The New York TimesTeri Johnson, the founder of Harlem Candle Company, received an email on June 26 from her third-party shipper about a potential UPS strike. It suggested she switch to FedEx. That will cost her about $2 extra for each candle shipped in the greater New York area. Sending her candles to California will cost even more.“We don’t really have a choice right now,” Ms. Johnson said.FedEx said it was accepting additional volume for a limited time and would assess how much capacity its network could accommodate. “Shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now,” the company said in a post on its website on Thursday.The Postal Service said in an emailed statement that it “has a strong network, and we have the capacity to deliver what is tendered to us.”Larger companies are relying on sophisticated backup plans that have been tested over the past few years. The pandemic and previous tariff trade wars pushed many major retailers with global supply chains to diversify the countries where their vendors are and the parcel carriers they use.“We’ve been focused on investing in a lot of transportation solutions that allow us to more nimbly move freight between carriers,” said Alexis DePree, the chief supply chain officer at Nordstrom. “We can do that with a lot more flexibility and speed than we were able to in the past.”Some third-party carriers are seeing a boost in their businesses as the possibility of a UPS strike comes into focus for their clients. Stord, a third-party logistics and technology provider based in Atlanta whose clients include apparel makers and consumer-package companies, has been sending emails out telling its clients not to worry. Stord uses a cloud-based platform to offer services like warehousing and fulfillment and handles tens of thousands of their packages a day.By combining the volume of its broad portfolio of client brands and using software to make decisions, Stord has the leverage to better negotiate prices with the large parcel carriers, said Sean Henry, the company’s chief executive.“We’ve been negotiating with FedEx and U.S.P.S. about rates around UPS so our customers don’t have to do that,” he said.Stord said more of its clients had asked it to negotiate with carriers on their behalf. He said that equated to “tens of millions of dollars of annual revenue” for his business.Still, some business owners are not letting the possibility of a UPS strike stress them out just yet.Bill McHenry, president of Widgeteer, which sells cookware to large retailers, said he felt “kind of numb” after navigating the pandemic-related challenges. “I’ve seen a lot of stuff and the stories that I’ve heard and things we’ve had to go through and survive — not just the pricing but the upheaval of thinking you have a container but don’t,” he said.He said the potential rail strike last December had been a bigger concern for him.In the meantime, the possibility that a deal could be reached between UPS and the union that represents its workers, the International Brotherhood of Teamsters, remains. The union announced on Wednesday that negotiations had broken down, after previously saying the sides had reached a tentative agreement. If an agreement is not reached, a strike could happen as early as Aug. 1.If that occurs, “we would be collateral damage,” Ms. Keeler said. More

  • 100 Shares129 Views

    in Economy

    UPS Workers Authorize Teamsters Union to Call Strike

    by

    A walkout is possible after the contract for more than 325,000 workers expires this summer. Negotiations began in April but have yet to resolve pay.United Parcel Service workers have authorized their union, the International Brotherhood of Teamsters, to call a strike as soon as Aug. 1, after the current contract expires, the Teamsters announced Friday.The Teamsters represent more than 325,000 UPS employees in the United States, where the company has nearly 450,000 employees overall. The union said 97 percent had voted in favor of strike authorization.Many unions hold such votes to create leverage at the bargaining table, but a much smaller percentage end up following through. “The results do not mean a strike is imminent and do not impact our current business operations in any way,” UPS said in a statement, adding that it was “confident that we will reach an agreement.”A UPS strike could have significant economic fallout. The company handles about one-quarter of the tens of millions of parcels shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index. And while UPS’s competition has grown in recent years, rivals would be hard-pressed to replace that lost capacity quickly, leaving some customers in the lurch and others facing higher costs.“What happens when you try to stuff 25 percent more food into a stomach that’s 90 percent full?” said Alan Amling, a fellow at the University of Tennessee’s Global Supply Chain Institute and a former UPS executive.The two sides have reached tentative agreements on a number of issues since they began negotiating a national contract in April, most recently on heat safety, including a requirement for air conditioning in new trucks beginning in January and additional fans and venting for existing trucks.But the negotiators have yet to tackle pay increases, which the Teamsters say are overdue amid the company’s strong pandemic-era performance. The company’s adjusted net income increased by more than 70 percent from 2019 to last year.The union has also focused on revisiting pay disparities for a category of driver who typically works on weekends.The UPS chief executive, Carol Tomé, who started in that position in 2020, said on a recent earnings call that UPS was aligned with the union on “several key issues.” She added that outsiders should not put too much stock in the “great deal of noise” that was likely to arise during the negotiation.Looming over the talks is the political standing of the Teamsters’ leader, Sean O’Brien, who during his campaign for the union’s presidency in 2021 repeatedly accused his predecessor, James P. Hoffa, of being overly conciliatory toward employers.Mr. O’Brien complained that Mr. Hoffa had essentially forced a concessionary contract onto UPS workers in 2018 after union members voted down the deal. He criticized his opponent for the presidency, a Hoffa-aligned candidate, for being unlikely to strike.“You already conceded that in your 25-year career, you only struck six times, so UPS knows you’re not going to strike,” Mr. O’Brien said at a candidates’ debate.Mr. O’Brien has largely maintained his aggressive stance on UPS since taking over as president last year. Speaking in October to activists with Teamsters for a Democratic Union, a reformist group that backed his candidacy, Mr. O’Brien vowed that “this UPS agreement is going to be the defining moment in organized labor.”Compensation for UPS drivers is generally higher than pay at the company’s competitors. UPS said that the average full-time delivery driver with four years’ experience makes $42 an hour, and that part-time workers who sort packages make $20 an hour on average after 30 days.The groups receive the same benefits package, which includes health care and pension contributions and is worth about $50,000 a year for full-time drivers, the company says.Beyond overall pay levels, the union has said it wants to eliminate a category of driver created under the 2018 contract.The company said the category was intended for hybrid workers who performed jobs like sorting packages on some days while driving on other days, especially Saturdays, to address the growing demand for weekend delivery.But the Teamsters said these workers never followed the hybrid arrangement and simply drove full time from Tuesday to Saturday, for less pay than other full-time drivers. The company says that the weekend drivers make about 87 percent of the base pay of regular full-time drivers, and that some employees have worked under a hybrid arrangement.In the event of a strike, deliveries to consumers, such as e-commerce orders, would probably be among the first to be disrupted. But experts said the supply chain could suffer, too. Some suppliers would struggle to quickly ship goods like automotive parts to manufacturers, potentially causing production slowdowns.Even a short strike could take a toll on UPS. Many customers long relied exclusively on the company, but that started to change after the Teamsters last went on strike in 1997, Mr. Amling said. After that strike, which lasted just over two weeks, more customers began to work with multiple carriers. The consequences were masked by gains from the rise of e-commerce and fewer competitors to choose from, but the company may not be so fortunate today.Niraj Chokshi More

  • 150 Shares109 Views

    in Economy

    If the Job Market Is So Good, Why Is Gig Work Thriving?

    by

    Conventional employment opportunities abound, but online platforms still have appeal — for flexibility or additional income.American workers are experiencing, by many measures, one of the best job markets ever. The unemployment rate has matched a 53-year low. Job listings per available worker are at historic highs. Wages, while not quite keeping up with inflation, are rising at their fastest pace in decades.So why would people keep doing gig work, a notoriously difficult and insecure way to make a living?Online platforms like Uber and Lyft say the number of people providing services on their networks is rebounding steadily after a sharp decline early in the pandemic, while businesses like hotels and restaurants are breaking work into hour-by-hour increments available on demand.Picking up shifts offers something that traditional permanent employment still generally doesn’t: the ability to work when and as much as you want, demand permitting, which is often essential to balance life obligations like school or child care.And lately, inflation has provided an extra incentive. As the cost of rent and food soars, gig work can supplement primary jobs that don’t provide enough to live on or are otherwise unsatisfying.Lexi Gervis, an executive at a financial management app called Steady, said that users’ data showed that more people were involved in gig work — and that the average gig income per worker grew — from the start of the pandemic through this summer.“We were seeing this move towards multiple income streams, because that work was picked up as a stopgap and then continued,” Dr. Gervis said.Take Denae Bettis, a 23-year-old Steady user living in Severn, Md. After dropping out of college, she got a job at UPS, and after a few years rose to become a safety supervisor, usually starting at 4 a.m. During the pandemic, she took on more responsibilities.“The job got really stressful, and I felt like I had no way out,” Ms. Bettis said. So in June 2020, she started a side gig through Instacart, shopping for people holed up at home. The next month, she quit her job, making it easier for her to pursue her passion: working as a personal makeup artist, which often requires taking early-morning appointments.Surviving on income from gigs — which for Ms. Bettis now include DoorDash as well as Instacart — isn’t easy. But Ms. Bettis thinks she can save enough money to open her own storefront.“We just went through a period where millions died, so are you going to spend your time at your job if it doesn’t fulfill you?” Ms. Bettis said, summing up gig work’s appeal. “Everybody loves stability, but if the flexibility isn’t there, I don’t think a lot of people are going to go back.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Labor advocates have long been concerned about businesses that depend on independent contractors, since those workers aren’t entitled to the rights and benefits that come with employee status, like employer contributions to payroll taxes and unemployment insurance. But while the model has gained traction, it has been difficult to pin down how fast the ranks of gig workers are growing.The most accurate measure is Internal Revenue Service data on 1099 tax forms — the freelancers’ counterpart to the W-2 forms filed for employees — but that is available only to select researchers and released with a lag of several years. At last count, in 2018, a team of economists found that about 1.2 percent of workers with any earnings had at least some income from online platform work. (A Pew survey from 2021 found that the share of all adults with gig income in a 12-month period was about 9 percent.)The closest government metric that is more timely comes from the Bureau of Labor Statistics, which asks people whether they count themselves as self-employed. That number rose significantly as a share of the labor force from early 2020 to early this year. But it generally captures people for whom self-employment is the main source of income — which, for most gig workers, it isn’t. More likely, the bump represents an increase in the number of people working as home improvement contractors and owner-operator truck drivers — two longtime means of self-employment that surged during the pandemic — and some white-collar freelancers.Less comprehensive but more specific data comes from third-party platforms like Steady, which allows nearly six million workers to track their often-variable sources of income and posts incentives from gig platforms to try working for them. From February 2020 to June 2022, Steady recorded a 31 percent increase in the share of workers on the app with 1099 income. More of those were women than men, with particular growth among single mothers. Freelance income per gig worker increased 13 percent.Ms. Bettis hopes that doing deliveries will allow her to save enough money to open her own storefront.Rosem Morton for The New York TimesAt the same time, the lines between gig work and traditional employment are blurring.Staffing agencies have long supplied temporary workers for industries like warehousing and light manufacturing, where they would have to show up at a certain time on certain days until the business no longer needed the extra labor. Now, some agencies also offer one-off, no-commitment shifts in workplaces that rarely used temp labor before, like restaurants, hotels and retailers.Under this approach, while offering the flexibility of gig work, the staffing agencies usually serve as the employer and administer benefits. Workers are paid as W-2 employees, not independent contractors, which means that they’re still protected by federal labor laws and elements of the social safety net, including workers’ compensation in the event of an injury.Snagajob, an hourly work platform, says that those shifts tripled from 2020 to 2021, and that they will probably quintuple in 2022 — mostly as side income because people’s regular jobs weren’t sufficient.“I think if they were getting the ultimate flexibility and all the compensation they wanted from their full-time employer, there’s probably less of a need for shifts,” said Snagajob’s chief executive, Mathieu Stevenson. “But the reality is, at the overwhelming majority of businesses, you can’t offer as much flexibility. So this is a way to say, ‘If you do want to add an extra $150 because you need it, whether because you want to do something special with your family or you need to pay the light bill, this is an avenue.’”More so than online gig jobs, it can also be a springboard to other opportunities.It worked for Silvia Valladares, 24, who started picking up Snagajob shifts a few years ago to support herself as a college student studying fine arts in Richmond, Va., the company’s initial market. Dishwashing and catering at different places allowed her to fit work in between her classes. But while working at an event venue called Dover Hall, she took a shine to hospitality, and decided to make that her career.“I got to know the regular staff and the management, and they got to know me,” Ms. Valladares said. “Eventually I asked if I could just work here, and they just put me on the regular staff.” Now, as bed-and-breakfast director, she’s the one posting gigs on Snagajob — which lately have been filling quickly.Worker advocates say allowing many competing employers to post last-minute shifts through an intermediary is probably a better model than a world of platforms that change rates at will and lack many of the legal obligations that employers must meet. But they say it still leaves workers on the margins of the labor market. Research on labor outsourcing has generally shown that temp workers are compensated less generously than co-workers who are hired directly.“You can look at it and say, ‘This is great, people need jobs, these companies can do the matching, it’s a win-win,’” said Daniel Schneider, a professor of public policy at Harvard’s Kennedy School of Government who has studied low-wage work. “The broader context is that it’s really not. It’s just a way for companies to shift costs and avoid economic responsibility.”And while gig work has retained and even enhanced its appeal through the pandemic and recovery, it is not clear what will happen if the economy tips into recession and the number of conventional jobs starts to shrink.Gig companies say it will bolster their labor supply, as the hardship caused by rising prices has. Uber said on its second-quarter earnings call that for 70 percent of its new drivers, the cost of living influenced their decision to join. “There’s no question that this operating environment is stronger for us,” said Dara Khosrowshahi, the chief executive.But in an economic downturn, an increase in worker availability for online platforms could coincide with a fall in demand. If customers reduce delivery orders and take fewer cab rides, it would be harder for those who depend on the apps to make a living.That worries Willy Solis, a driver for the Target-owned delivery service Shipt in the Dallas area who has been an organizer for better conditions.“When people are desperate for work, that’s usually what they want to do, is find something that’s easily obtainable,” he said. But what is good for the gig-work companies may not be good for the workers, he added. “Whenever they do hiring sprees,” he said, “we see an influx in gig work and a decrease in the amount of work that’s available to us.” More

  • 100 Shares179 Views

    in Economy

    Gopuff Buys Time for Its 30-Minutes-or-Less Delivery Promise

    by

    The $15 billion rapid-delivery start-up decided to do business differently from rivals like Instacart. A changing environment is testing its model.From its beginning in 2013, Gopuff aimed to do rapid delivery differently.The start-up’s founders, Yakir Gola and Rafael Ilishayev, based the company in Philadelphia, away from other delivery ventures in Silicon Valley and New York. They opened warehouses and bought their own merchandise, instead of acting as middlemen who connected retailers and restaurants with customers. And they promised speed, delivering food and other items in 30 minutes or less.By late last year, Gopuff had amassed $3.4 billion in funding, bought the alcohol and beverage retailer BevMo! and was valued at $15 billion. This year, it appeared poised to go public.“We built a sustainable business that thrives and that is set up to win long term,” Mr. Gola, 29, said in an interview last month. Gopuff, he added, is “a disrupter.”Now the question is whether Gopuff has done delivery differently enough. In the past few months, the start-up environment has changed from boom to uncertainty, as tech stocks have cratered, inflation has risen, interest rates have increased and the economic outlook has darkened.In response, Gopuff recently put off its public listing and is trying to raise $1 billion in debt that could potentially be turned into stock. The unprofitable company also lowered its drivers’ minimum pay in California. This year, it has done two rounds of job cuts, including last month when it laid off about 450 people, or 3 percent of its 15,000 workers.Gopuff faces a dismal history of failed delivery start-ups, from Webvan and Kozmo.com in the early 2000s to Buyk, 1520 and Fridge No More in the past few months. Delivery — with high labor and transportation costs, stiff competition and lofty marketing expenses — is notoriously expensive and logistically complicated to provide and make money on.While delivery companies such as DoorDash and Grubhub have gone public, many of them lose money, and some have later been acquired. And with the bump in pandemic orders tailing off, many of these companies are hitting hurdles. Last month, the grocery delivery start-up Instacart cut its valuation to about $24 billion from $39 billion.“These companies are fine during a very ebullient and frothy capital markets environment,” said Ken Smythe, the chief executive of Next Round Capital Partners, which advises investors buying and selling stakes in start-ups. “The world has changed significantly in the past 60 days.”Gopuff’s delivery people are gig workers. The business also has warehouses where its workers are full-time employees.Gabby Jones for The New York TimesIn the interview, Mr. Gola acknowledged that delivery was “very logistically complex — it takes a lot of time and a lot of effort and capital.” But having warehouses and inventory is the only way to profit over time, he said, because it allows the company to make money from selling goods and not just charging delivery fees.“Once you can execute, and obviously that’s hard, it wins in the long term,” he said.Gopuff added that it was putting a public offering on the back burner because the stock market had been volatile and it had enough cash on hand. The layoffs were part of a global restructuring, it said.Mr. Gola and Mr. Ilishayev met as students at Drexel University in Philadelphia in 2011. In their sophomore year, they founded Gopuff for college students, offering fast late-night deliveries of junk food, condoms and smoking paraphernalia. They called themselves a “one-stop puff shop,” which led to the name Gopuff. Deliveries were available until 4:20 a.m.To set themselves apart from DoorDash and Instacart, which connect customers to restaurants and grocery stores via their apps and rely on gig workers, Mr. Gola and Mr. Ilishayev decided Gopuff would buy goods from distributors and wholesalers and have warehouses. Its warehouse workers would be full-time employees, though its delivery drivers and bike messengers would be contractors.Mr. Gola, who dropped out of college, and Mr. Ilishayev, who graduated from Drexel with a degree in legal studies, became co-chief executives of Gobrands, Gopuff’s parent company. To fund the business, they sold used office furniture on Craigslist and eBay. They also offered discounts on orders to attract customers and charged just $2.95 for delivery.As Gopuff gained traction beyond Drexel students, Mr. Gola and Mr. Ilishayev expanded their product offerings and set up warehouses in Boston, Washington and Austin, Texas. Starting in 2016, the company raised money from venture firms such as Anthos Capital and, later, investors including the Japanese conglomerate SoftBank.“We saw it in the data: customers coming back multiple times every month, very strong customer retention, customers who would stick around forever, basically,” said Jett Fein, a partner at Headline, a venture capital firm that invested in Gopuff.In 2020, the pandemic sent Gopuff’s business into overdrive as people shied away from shopping in person and relied on deliveries. Billions of dollars in new venture capital flooded in.Mr. Gola and Mr. Ilishayev went on a spending spree. That November, Gopuff acquired the California retailer BevMo! for $350 million, giving it a foothold in the state as well as the chain’s liquor licenses. In Europe, it bought the delivery start-ups Fancy and Dija.The company also started offering a $5.95 monthly subscription for delivery and began an advertising business.Gopuff now has nearly 700 warehouses that deliver to 1,200 cities in North America and Europe. It also has several retail locations in New York, Texas and Florida, where customers can walk in and shop.But profits have been elusive. The start-up is not cash-flow positive, which means it is spending more money than it is taking in, said Scott Minerd, the chief investment officer of Guggenheim Investments, which has invested in Gopuff. He added that the company had paused some plans to open new warehouses.Gopuff spends more on property and salaries of warehouse workers than its rivals, said John Mercer, head of global research at the firm Coresight Research. Discounts to attract customers have also eaten into revenue.Gopuff said it made money in its first three years. Its 2020 revenue was $340 million, according to a company document for potential landlords that was obtained by The New York Times. The document also showed that Gopuff’s cash balance dropped $111 million that year to $521 million.Revenue totaled $2 billion last year, Gopuff said. The company also lost $500 million, which was first reported by Axios.Some of its spending has gone toward handling delivery issues, said four former warehouse and district managers, three of whom declined to be identified because of severance agreements with the company. Several said they had sometimes spent hundreds or thousands of dollars a day on Instacart or at grocery stores to replenish Gopuff’s “never out of stock” staples like bacon, eggs and milk.At other times, suppliers sent pallets of items like ice cream that were not needed and could not be stored.“I would throw away $1,000, $2,000, $3,000 in inventory as soon as I received it because I had nowhere to put it,” said Anthony Nelson, who managed two Gopuff warehouses in Houston from 2019 through 2021. “That happened at least once or twice a week at bare minimum.”Mr. Gola said Gopuff bought items from Instacart or local retailers less than 1 percent of the time and threw out less inventory than the industry standard.The start-up has also faced questions over its use of gig workers, many of whom sign up for shifts with the company and report to managers. In 2018, the Labor Department found that Gopuff had misclassified delivery drivers in Pennsylvania as independent contractors.“Gopuff’s entire business model depends on flagrant misclassification of a kind that’s shocking well beyond what we see even from other gig companies,” said David Seligman, a lawyer who filed a 2017 class-action lawsuit claiming Gopuff wrongly categorized its drivers as contractors. The suit was settled in 2019.In November, hundreds of Gopuff gig workers went on strike, said Candace Hinson, a delivery driver in Philadelphia who helped organize the stoppage.Mr. Gola said the company used gig workers as drivers, rather than hiring employees, because “that’s what they want.” The company disputed that hundreds had gone on strike and said the workers’ action had not hurt its business.In the interview, Mr. Gola insisted that Gopuff would be the company to crack the instant delivery code.“The world is moving toward instant,” he said, “and Gopuff is at the forefront of that.” More