UPS Traffic Losses Trigger Layoffs

United Parcel Service Wednesday said so-far-unsuccessful contract talks with the Teamsters have cost it enough business to eliminate thousands of union jobs.

PS spokesman Norman Black told Transport Topics that the job reductions were being implemented through a combination of layoffs and attrition.

While UPS insisted it will meet its earnings forecasts of 50 to 55 cents per share, the package carrier conceded that its package volume fell 4% in June as the contract deadline approaches, the Associated Press reported. Volumes in April and May had been 2% below the previous year.

Negotiations are taking place this week in Washington, where Teamsters spokesman Bret Caldwell questioned whether job reductions were in the thousands as UPS had said.

"There are certainly layoffs," he said. "We feel that's overstated."

t the same time, UPS investors got a bit of positive news, Reuters reported, when Standard & Poor's said Wednesday that the company will join the S&P 500 after the close of business July 19, as it plans to replace seven non-U.S. companies.

The main beneficiaries of diversion from UPS, Reuters said, have been FedEx and Airborne Inc., both of which claim to have been beating out UPS for contracts of a year or more because of strike worries among some shippers.

The current contract covers about 230,000 workers and expires July 31. Union members have authorized a strike if no deal is reached.

UPS is anxious to avoid a crippling strike like the one it endured in 1997, when the Teamsters shut down the company for 15 days, costing it $750 million in lost revenue.

Click here for a press release from UPS on shipping volume.)