Ups Essay, Research Paper
At 12:01 a.m. August 04,1997, 185,000 members of the International Brotherhood of
Teamsters, one of the largest and historically most powerful unions in the U.S., struck
against the United Parcel Service, the company which ships 80 percent of all packages in
the country. It was the first nationwide strike in the 90-year history of UPS, and involves
more workers than any strike in this decade. “It’s Our Contract, We’ll Fight for It” said
Teamster signs. It’s more than just a contract dispute, and what’s needed is a fight to win
this key labor battle. “We’re striking for every worker in America,” said a picketing UPS
driver in Atlanta. He’s right, and then some. All working people, minorities, immigrants
and every other oppressed sector in this country have a stake in this struggle. We must
prepare now to come out and defend the UPS strikers against the blows that the bosses
and their government are already preparing.
A 21-year UPS driver picketing outside the UPS Metro facility at 43rd Street in
Manhattan told The Internationalist: “this is a standoff between labor and
management–here it’s UPS, but it’s almost everywhere. The management at UPS looks at
us with contempt.” Deep-seated resentment against the highhanded UPS bosses and the
sheer power of the unionized work force make this a chance to turn the tide of the more
than two decades of defeats that the unions have suffered.
UPS was founded in 1907 by a 19-year-old Seattle teenager who employed a team
of boys to deliver luggage, parcels, and store purchases, UPS matched company growth
with innovation. The company pioneered the idea of “consolidated delivery,” which
streamlines performance by combining packages addressed to the same neighborhoods.
UPS introduced its service to the general public after World War II, and had its national
network in place by 1975. Its international network was set up soon after. In 1988, UPS
received approval to operate as an independent airline, and it is currently the nation’s
ninth-largest, even offering weekend charter flights.
Package delivery for retail stores became the company’s focus, and in 1913 Jim
merged with a competitor, Evert (”Mac”) McCabe, and the American Messenger
Company changed its name to Merchants Parcel Delivery. Charles W. (”Charlie”)
Soderstrom joined the firm and helped manage the company’s growing fleet of delivery
vehicles. During this period, the company also pioneered the concept of consolidated
delivery, combining packages addressed to a certain neighborhood onto one delivery
The company extended operations to Oakland, California, and later to Los
Angeles. In 1919, the name United Parcel Service was adopted. “United” because
shipments were consolidated, and “Service” because, as Charlie Soderstrom observed,
“Service is all we have to offer.” In 1929, the company opened United Air Express,
offering package delivery via airplane to major West Coast cities and as far inland as El
Paso, Texas. All UPS vehicles were painted the now-familiar Pullman railroad brown
color. By the 1930s, UPS provided delivery services in all major West Coast cities, with a
consolidated delivery service in the New York City area. The first mechanical system for
package sorting was developed, and a 180-foot-long conveyor belt was installed in Los
By the early 1950s it was clear that contract service to retail stores was limited and
UPS managers began looking for new opportunities. They decided to expand their
services by acquiring “common carrier” rights to deliver packages between all addresses,
for any customer, private or commercial. This decision placed UPS in direct competition
with the U.S. Postal Service.
In 1953, UPS resumed air service, offering two-day service to major cities on the
East and West coasts. The service, called UPS Blue Label Air, grew and in 1978 the
service was available in every state, including Alaska and Hawaii. To ensure dependability
during the time of federal deregulation of airlines, UPS began to assemble its own jet
cargo fleet, the largest in the industry. With growing demand for faster service, UPS
entered the overnight air delivery business, and, by 1985, UPS Next Day Air service was
available in 48 states and Puerto Rico. Alaska and Hawaii were added later. UPS entered a
new era with international air package and document service, linking the U.S. and six
In 1988 UPS received authorization from the Federal Aviation Administration
(FAA) to operate its own aircraft, thus officially becoming an airline. UPS Airlines was the
fastest-growing airline in FAA history, formed in little more than one year with all the
necessary technology and support systems. In 1990, UPS introduced scheduled service to
Asia and Mexico with expanded air express service by jet, feeder or contract airlift to
more than 200 countries and territories. In 1997, UPS Airlines embarked on a unique
program to reconfigure five 727-100 cargo aircraft passenger planes and charter them to
cruise lines and travel groups. During the week, these planes fly packages throughout the
U.S., but on the weekends when they aren’t in use, the aircraft are converted to
comfortably accommodate 113 passengers with spacious seating, complete with overhead
storage bins, fully equipped galleys for hot meals and three lavatories. Today, UPS
Airlines is the ninth largest airline in North America.
In the 1980s UPS entered the international shipping market. Today, UPS operates
an international small package and document network in more than 200 countries and
territories, spanning both the Atlantic and Pacific oceans. With its international service,
UPS can reach over four billion people.
In the mid-1980s, UPS shifted its emphasis from an operations focus to a customer
needs focus. Today, UPS provides many customer solutions. One such example is UPS
OnLine Tools. UPS OnLine Tools are free Internet-based applications that allow
companies to embed UPS shipping functionality directly into their own Web site. This
offering allows UPS to achieve its goal of helping customers to enable global service. UPS
continues to expand its services by developing new categories of business. UPS Logistics,
developed in 1993, provides global supply chain management solutions and UPS
Worldwide Logistics provides consulting services based on the customer’s individual
needs. In 1995, UPS acquired a company called SonicAir, making UPS the first company
to offer same-day/ “next flight-out” service and guaranteed 8 a.m. overnight delivery. In
1998, UPS Capital was founded and its mission is to provide a comprehensive menu of
integrated financial products and services that enable companies to grow their business. In
February 2000, UPS formed UPS e-Ventures which is the research, development and
incubation arm of UPS e-commerce. The first company this new group is developing is
UPS e-Logistics. UPS e-Logistics plans to provide complete, end-to-end business
solutions for the rapid, low-cost launch of e-commerce startups
UPS believes its most valuable asset is loyal and capable people. The dedication of
UPS people is achieved through two long-standing company policies: employee ownership
and training. A commitment to life learning means being prepared for continuous formal
education and training. UPS invests more than $300 million dollars a year in employee
learning programs. Managers can take advantage of full-tuition reimbursement for
advanced degree programs that apply to their careers. Drivers go through extensive
training both in the classroom and on the road. This training is done to ensure efficiency
and to guarantee customer service and satisfaction. At UPS, every member of the senior
management team began their careers at the front lines of the company as package sorters,
drivers and administrative assistants. The idea is that you can’t manage a business unless
you know how it operates.
This company sounds like one that you would want to jump right in and work for.
They seem to be there for their employees. You ask yourself then, what brought on this
Union members were waiting for a contract but UPS could not meet their
requirements before the deadline, therefore a strike. The demands that the Teamsters
called for were, for more full-time workers; a company proposal to take over the workers’
pension plan; and proposals for improving workplace safety. The union wanted a large
number of part-time jobs converted into full-time positions, with full benefits in order to
provide more job security.
Why did UPS hire only part time emloyees? Of the 46,000 workers UPS had hired
between 1993- 1997, more than 80 percent were part-timers. The reason behind this type
of hiring , UPS says, is in order to keep up with its non-union competitors, it has been
forced to hire more part-time workers.
Fifteen days later, workers prepared to don their brown uniforms and return to
their jobs. The Union took the first step to ratify the settlement and to get a contract
signed. Among the major provisions of the tentative labor agreement between UPS and
Teamsters union were: the contract would be for 5 years, not the 2-3 year deal that the
Teamsters asked for. To change 10,000 part time jobs to full time jobs. This was a plus for
the teamsters since UPS wanted only 1,000. The Teamsters will still keep control of the
multie- employer pension plan that is solely for UPS workers. Pension Benifits will also
increase. Increased hourly wages by up to 36%, so over 5 years full- time workers wil gain
$3.10 an hour, with the top rate reaching $23 an hour. Part- time workers will gain $4.10
an hour with the top rate reaching $15 an hour, which is up from the $8 an hour before the
After the strike UPS hurried to rebuild its business and make up a $1 billion
shortfall in revenues. The 1999 year’s financial performance indicated that the company
seemed to be recovering spectacularly. However, the improved financial performance has
not necessarily meant improved employee relations. Negative effects of the walkout
remained, despite the management’s efforts. Empoyee moral is up but it was met with
claims of non- compliance to the agreement.
Drivers were still complaining bitterly to union officials and UPS management
about productivity demands (employee performance) and what they saw as a decline in
service. Many drivers felt the increased productivity levels since the strike were
unattainable, and there were reports of nervous breakdowns because of the pressure put
on drivers to produce. Management however, pointed to the company service index being
at its highest level ever while the company had cut back on service. As drivers urged the
company to choose between increased productivity or better service the response has been
“give us both, because you can’t be productive without good service.”
UPS management saw the union as “us-versus-them” and were not going to
engage in “win/win” strategies. They also reported that since the work stoppage they had
not had an inordinate increase in the number of calls to their toll-free business-conduct line
where employees could call in anonymously and report their feelings or any incidents.
There had been a record number of grievances since the strike due to petty harassment and
post-strike vindictiveness on the part of some supervisors claimed teamster Rand Wilson.
Some progress was being made, admitted by both sides, but lots of bad blood
remained. Supervisors were called upon to keep the business running during the strike,
and were subjected to harsh language and threats when they crossed the picket line to do
so. Even UPS drivers admitted that some very nasty things were said during the strike,
and there are still some sores there that are mending.
UPS hired consutants and they stated that employee morale was higher than ever
but, some union activists said that there was still widespread dissatisfaction. Somewhere
between the two, layed the truth. UPS handed out surveys which revealed that employees
felt wounded by the blows to the company’s reputation and problem areas surfaced around
improving communications. Conjugate that and it seemed to be that employees were still
proud to work for UPS, but needed positive reinforcement. Workers in the field were
reported to still respect the head people in the company, who came up through the ranks.
However, there were some workers who felt that top executives were out of touch with
the workers themselves.
Union leaders, activists, UPS leaders and supervisors all voiced optimism for the
future.While UPS looked to dismiss last year’s strike as a minor glitch, much of the
bitterness and anger lingered on. There seemed to be a trend of policy makers for both the
union and UPS management to downshift their relationships from collaborative to
confrontational and splits between the rank-and file workers and supervisors, as well as
workers and UPS itself are likely to increase. All in all, it seemed profits had increased,
and the dynamics of labor relationship at UPS were still looking for a degree of
stabilization and the Union had lost over $3.5 million a year in dues.
So where is UPS now? Since the strike they have gone public, selling 10% of its
stock on the New York Stock Exchange to the public, making it the second largest initial
public offering by an American company in history. Today, UPS is not just in the delivery
business, but in the customer satisfaction business, and customer needs will continue to be
the company’s driving force. The highest priorities for UPS over the next five years will
be: growing internationally, deploying technology that will allow UPS to continue
introducing new services; to electronically connect customers to UPS so even more
comprehensive information about shipments is available; to continue creation of new
services and solutions for customers that add value all along the supply chain, and, finally,
to move further into all three converging flows of commerce – the flow of goods,
information, and funds.
UPS has always been a good company since they first days of business in 1907.
They expanded tremedously. Even though have had their shares of setbacks, they still
remain strong and have succeeded through it. The strike hurt them the most and they have
overcome it to bring their company to the top. UPS is and always will be a household
name. I remember running out of the house to that oh- so- familar brown uniform and
truck when I was a kid and hopefully my kids will too.
Behr, Peter. “UPS Ready to Roll After 15-Day Strike Union Negotiators, Local Leaders
Vote Unanimously For Pact.” Washington Post 20 Aug. 1997: 1.