Retailers brace for more supply-chain woes as Teamsters threaten a strike against UPS

It is crunch time in the negotiations between UPS and the Teamsters union, which represents about half of the company’s workforce. Negotiations broke down earlier this month, but both sides head back to the bargaining table Tuesday — with just six days left on the current contract.

The more than 300,000 Teamsters who work for UPS are demanding higher wages and better working conditions. They’ve authorized a strike and have been practicing pickets and rallies.

If they end up striking next week, it’ll be the first time in more than a quarter-century. In that time, the delivery business has grown a lot and taken on a much bigger role in this economy. So how would a strike affect consumers and retailers?

Latasha Merritt runs Sweet Girl Desserts, where she makes and delivers baked goods to customers in and around Newark, New Jersey. On the menu? “Banana pudding, rum cake, carrot cake, strawberry cake,” she said.

Merritt is keeping an eye on the possible strike at UPS because she gets many of her supplies that way — “cake supplies, the containers,” she said.

For instance, the packaging for individual portions of her cakes comes via UPS. So if there’s a strike, “I don’t know how I’m going to be able to get by.”

A lot of retailers and manufacturers have pulled the trigger on a Plan B, explained Karen Donohue of the University of Minnesota. 

“Increasing their orders right now and having some extra inventory can help them to sort of ride the tide during the time that shipments might be temporarily delayed,” she said.

Many have also been seeking alternative delivery options, according to Jessica Dankert of the Retail Industry Leaders Association.

“A lot of that contingency planning involves expanding that portfolio of carriers, regional and local carriers, parcel carriers that retailers are working with,” she said.

Here’s the thing, though: UPS workers handle about a quarter of all parcel deliveries across the country, per Gregg Zegras, executive vice president at Pitney Bowes.

“There is not enough capacity with all of the other providers in the market to pick up the amount of volume that UPS accounts for on a daily basis,” he said.

The bottom line for consumers is that, if the strike happens, things are going to cost just a little bit more.