UPS

The approval puts an end to a contentious, monthslong negotiations process as the parcel carrier now seeks to recoup diverted volume.

With the contract's ratification, UPS shippers can rest easy after a contentious, monthslong negotiations process that had many customers fearing a highly disruptive strike.

"We expected negotiations with the Teamsters to be late and loud, and they were," UPS CEO Carol Tomé said on an Aug. 8 earnings call.

Differences over the wages part-time employees should receive emerged as a significant roadblock in early July, less than a month before the existing contract was set to expire. Talks were at an impasse for weeks before the two sides resumed negotiations and quickly ironed out a deal on July 25.

Both full-time and part-time employees will see their hourly pay increase by $2.75 in 2023 in the new agreement.

“Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry," Sean O'Brien, the union's general president, said in a statement. "This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.”

Although UPS avoided a strike, many shippers proactively diverted packages to other carriers over the past few months to ensure their deliveries wouldn't be disrupted. A combination of FedEx, the U.S. Postal Service and regional carriers gained an additional 1 million parcels daily due to the concerns in Q2, Tomé said.

UPS is now attempting to bring that lost volume back into its network, touting its strong service levels, speed edge over FedEx in several markets and other advantages for shippers.

"It's all hands on deck to win back the volume that was diverted as a result of the labor negotiations," Tomé said.