Negotiations between UPS and the Teamsters over a new contract for the roughly 350,000 unionized workers at UPS are moving ahead as the threat of a potential strike later this summer hangs over the economy.

UPS’ role in the U.S. economy has grown in recent years due to the rise of e-commerce and an influx of deliveries during the pandemic – a trend that has remained even as the economy reopened and supply chain challenges abated. 

The company ships about 24 million packages per day and handles roughly one-fourth of all U.S. parcel volume according to shipping and logistics firm Pitney Bowes, which UPS notes is roughly equivalent to 6% of America’s gross domestic product. 

The sheer volume of UPS deliveries couldn’t be absorbed by FedEx or the U.S. Postal Service in the event of a strike, which would create delays and increase prices due to the lost capacity in the logistics system. As Thomas Goldsby, a logistics chairman in the Supply Chain Management Department at the University of Tennessee, told the AP, "The python can’t swallow the alligator, and that’s going to be felt by all of us."

WHAT UPS TELLS US ABOUT THE ECONOMY

UPS has about 350,000 unionized employees who are represented by the Teamsters under what is the largest private-sector collective bargaining agreement in North America according to the union. That figure includes package delivery drivers and warehouse logistics workers around the country.

The current Teamsters contract expires on July 31, which raises the possibility of a strike beginning on August 1 if the two sides are unable to finalize an agreement. Negotiations officially began on April 17.

UPS told FOX Business, "UPS is focused on reaching a deal that is a win for our employees, the Teamsters, UPS and our customers – and we’re committed to doing that before the end of July. We continue to make meaningful progress on a wide array of issues in our negotiations."

CALIFORNIA PORT PROBLEMS PILING UP AMID LABOR NEGOTIATIONS

Teamsters members are voting this week to authorize a potential strike if a deal with UPS fails to materialize, with vote results expected to be announced Friday. 

Such strike authorization votes are a routine part of collective bargaining negotiations and don’t necessarily mean that a strike will occur, as the two sides may compromise on a new contract to avert a strike prior to the deadline.

On Tuesday, the two sides announced a tentative agreement on workplace protections from heat, an issue that the Teamsters raised at the outset of negotiations. The union tweeted that it and UPS "agreed to tentative language to equip the company’s fleet with air conditioning systems, new heat shields, [and] additional fans during contract negotiations today."

CERTAIN AMAZON RETURNS AT UPS STORES COME WITH FEE

The Teamsters wrote on Twitter that the new contract language would mandate that UPS equip in-cab air conditioning systems in all larger delivery vehicles, small sprinter vans, and all the shipping giant’s brown package cars acquired after January 1, 2024. The brown package cars make up the vast majority of the 93,000 vehicles in the UPS delivery fleet.

UPS would also install two fans in the cab of all package cars after the ratification of a new contract, install exhaust heat shields on newer non-electric package cars and vans, and newly existing and purchased package cars would be retrofitted or equipped with induction vents to reduce temperatures in the cargo compartments of vehicles. 

According to UPS, the retrofits would occur within 18 months of the contract’s ratification.

"Air conditioning is coming to UPS, and Teamster members in these vehicles will get the relief and protection they’ve been fighting for," said Teamsters General President Sean O’Brien on Tuesday. "The union’s entire national committee and our rank-and-filers should be commended for staying in this fight and making their priorities known to this company." 

GET FOX BUSINESS ON THE GO BY CLICKING HERE

UPS confirmed the agreement in a post on the company’s negotiation news website and indicated the new vehicles would be allocated to the hottest parts of the country first when possible. It added that the new heat measures "build on important actions UPS rolled out to employees in the spring."

The Associated Press contributed to this report.