Mailers, Shippers Prepare for Possible UPS Strike

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Though optimistic that United Parcel Service workers will not strike in July, direct marketers are developing contingency plans in case a strike does occur.


Early results of an International Brotherhood of Teamsters vote this month show that 93 percent of UPS Teamsters support a walkout if an agreement is not reached before the current contract expires July 31. Final results are expected this week.


The union represents 230,000 UPS drivers, sorters, clerks and loaders. Teamsters walked out on UPS for 15 days in 1997.


UPS cautioned that the vote is a normal part of the negotiating process and should not be taken as a barometer of the progress.


Still, direct marketers are ensuring they are prepared.


"Anybody who is not working on a contingency plan in case there is a strike is a fool," said Bill Monk, director of logistics at Nordstrom.com, Cedar Rapids, IA.


"We utilize a lot of drop-ship vendors that ship to us via UPS, so right now we are verifying that those folks have plans in place to make sure that our packages still move in case of a strike," Monk said. "We also know that if we have to, we can move everything into our consolidator network. Right now, only packages in a certain pound break can be shipped via this network."


Monk said he is concerned about how a strike would affect the service of some of the other carriers.


"I'm not as worried about the postal service, but I am worried about carriers such as Airborne," he said. "If everybody and their brother jumps on Airborne and floods their transportation system, the packages are going to stop. It's going to be gridlock. We want to be sure Airborne has a contingency in place as well."


However, he said that other carriers may be better able to handle a UPS strike this time because some, such as Airborne and FedEx, now have ground networks.


"When the strike took place in 1997, we just didn't accept any new customers because we didn't want to jeopardize service for our loyal customers," said Robert Mintz, an Airborne spokesman. "I can't comment on what our policy will be this year if there is a strike, but we may do the same thing again."


At FedEx, sales executives are asking customers how much more they think they would need to ship with FedEx in the event of a UPS strike, and urging them to begin shipping this extra volume with FedEx by early June.


FedEx also is asking those customers to sign a letter that they will do this. If they don't sign, FedEx said, then it may be unable to handle the customer's extra volume.


"If, by early June, a customer is not shipping the extra volume with us, then we can say 'OK, maybe that allocation will go to a customer that is,' " FedEx spokesman Jesse Bunn said. "We think this is exactly right for the customer because it lets them know exactly where they stand with us, and it is exactly right for FedEx because it lets us match capacity to volumes." Bunn said this is the first time FedEx has done this.


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