A UPS Strike Is Looming. Here's How Your Business Can Prepare
Posted Jul 19, 2023
If UPS is the only shipping carrier you do business with, start diversifying now.
UPS and the International Brotherhood of Teamsters are currently in negotiations for a new agreement, which is set to expire on August 1. If a strike does occur -- marking the first one since 1997, which lasted 15 days -- all UPS deliveries will come to an immediate halt on August 1. This means that any packages sent via UPS, including those already shipped, will not be delivered until an agreement is signed.
While it is possible that both UPS and the Teamsters will find common ground and avoid a strike, it's important that shippers be prepared for any outcome.
What a strike could mean
If the looming UPS strike becomes a reality, U.S. supply chains will see significant disruptions. Those businesses without alternative providers in their shipping carrier mix will be the most susceptible to disruption. And if you're in a position where you also don't have enough shipping volume, you won't have the power needed to convince other carriers to accommodate you.
It takes time to get contracts in place, so, especially with peak holiday season around the corner, the sooner you start shifting volume to USPS, FedEx, or regional carriers, the more flexibility you'll have.
The power of a diversified shipping carrier mix
With shipping costs generally being one of the highest expenses in order fulfillment -- usually second only to product -- establishing a robust shipping carrier strategy is crucial. Just as with suppliers, there is a list of things that can go wrong with a shipping carrier at any time that are completely out of your control, such as capacity issues, on-time performance, or a labor strike. With so many variables potentially impacting a carrier you rely on to deliver orders to your customers, having a contingency plan in place should be part of your shipping carrier strategy.
This isn't just true of a strike situation. If you only have a contract with one carrier and your business experiences a sudden shift -- for example, business begins picking up in new regions -- delivering those orders could quickly become an issue. There are a lot of ways to go down, and none of them are ideal, but failing because business it too good is among the tougher pills to swallow.
Explore your options
The carrier, or carriers, you choose to work with play as big a role in the success of your order fulfillment as any other factor in the mix. Unfortunately, the selection process often suffers due to a lack of experience, knowledge, or bandwidth. If you are only using a single carrier, your options are limited. Assembling a diversified carrier network takes a fair amount of research, comparison shopping, and negotiating. As you can imagine, having existing relationships with different carriers comes in handy here, which is one of the big selling points of an experienced 3PL.
Determining which shipping carriers, methods, and services to use is done on a per-package basis. Companies with 3PLs often take advantage of their ability to negotiate more favorable terms based on maintaining high volume of business with multiple carriers, but you can negotiate your own rates, use your 3PL's rates, or a mix of both.
Figure out what's best for your business, now
The choice regarding timing is to be made by every company for itself; however, diversifying your carrier usage now will lessen the impact of a potential strike on your business. Some carriers simply may not be able to cover a significant volume should a UPS strike occur.
Work with your fulfillment team to minimize disruptions to your operations in the wake of this potential strike. Your goal should be to ensure that all orders continue to be fulfilled in a timely manner so your customers don't end up on the receiving end -- or, in this case, the non-receiving end -- of shipping complications.