Changes in parcel landscape loom large as UPS, Teamsters knock heads again

Fred Harster drives a UPS truck on Park Avenue in New York, U.S, on Thursday, July 23, 2009. United Parcel Service Inc., the world's largest package-delivery company, forecast lower profit than analysts projected and said second-quarter earnings fell 49 percent as the recession cuts business demand. Photographer: Daniel Acker/Bloomberg

June 18, 2018

The UPS Inc. of 2023 may be a very different company from the one that exists today. By then, brown drones may fill the skies. Package cars may operate with the driver in the passenger seat. Sunday deliveries may become routine. Local deliveries might be handled by citizen drivers using their personal vehicles instead of by professionals in the ubiquitous UPS vans. UPS robots could be walking parcels from one urban location to another. Deliveries may be made in 30 to 45 minutes after an order is received. Amazon.com Inc. may no longer be a big UPS customer, but rather a full-fledged competitor.

If all that sounds far-fetched, consider that in 2013, “A.I.” was known as a Steven Spielberg film. Robots and drones were lab experiments. Sunday was a day of rest, not delivery routes. All vehicles had people driving them. Lockers were designed to hold clothes or books, not parcels. The “last mile” was a phrase associated more with death row than with packages. Amazon was a force in selling stuff, not shipping it.

The parcel industry has undergone profound changes in the past five years, and the next five are likely to be just as transformative. It is against this backdrop that UPS and the Teamsters union will hammer out collective bargaining agreements for the carrier’s small-package and less-than-truckload (LTL) operations to replace the five-year pacts that expire July 31. At stake are the livelihoods of 268,000 employees, relationships with 1.5million regular customers, and the direction of the $100 billion U.S. parcel market, and, by extension, the nation’s commerce.

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