UPS handles 24 million packages per day. What happens if there is a union strike on Aug 1st? Our CRO, Jim LeRose, lived through the last UPS strike in August 1997. And he remembers it vividly. ---- "The 1997 strike shut down UPS operations for 15 days and cost UPS over $600 million. During that time FedEx put in restrictions to avoid overloading their own systems and staff - there is only so much capacity available. Many of the packages were shipped via the USPS who legally cannot deny a customer from shipping additional volume. But the USPS systems were overwhelmed and there were delays and lost shipments (tracking was extremely limited at that time) This was prior to the ecommerce boom so the volumes were significantly lower. The strike ended when UPS signed a 5-year contract with the union that increased wages, improved employment benefits and boosted job security.” ---- This time around, the negotiations feel similar. Talks broke down on Friday, with just 3 weeks remaining until the current contract expires on August 1st, 2023. If no deal is reached in the next 3 weeks, I expect a significant disruption in the US ecommerce shipping. UPS holds about 24% of the shipping market share - every one from Amazon to mom-and-pop stores uses them. 15% of all shipments on the Ordoro platform last month was through UPS. So, if the strike happens, it'll be very disruptive for all of us. ---- Here is what we are recommending to all Ordoro customers to minimize disruption - 1️⃣ Diversify If you’re using UPS as your primary carrier, at a minimum we suggest adding other carriers to your shipping options. USPS, FedEx, Sendle, and Pitney Bowes will provide similar delivery timelines. Please contact support@ordoro.com if you need help in setting these up in your account PS - I expect that FedEx will limit taking on new volume during this time 2️⃣ Communicate Consumers might not be as familiar with the UPS strike news, so reach out to your customers and set expectations about shipping delays ---- Even if a strike happens on August 1st, I don't expect it to last very long. This is a high stakes situation, so both parties will reach an agreement soon, I’m optimistic. Ref: You can read up-to-date status of the negotiations here https://lnkd.in/gBEg7Y36
Great commentary. Will certainly consider alternatives to e-commerce if UPS does go on strike.
Great insights! Thank you for sharing
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6moJim LeRose Good Stuff. Communication is key. To note - I have seen FedEx communication that 7/17 is the last day to move volume to them - they will try to honor volume levels for those customer shipping with them before that date if there is a strike. So, shippers have some dice to roll this week.