April 12, 2018 3:30 PM, EDT

UPS Flight Dispatchers Vote to Authorize Strike as Contract Talks Continue

UPS planes at Worldport UPS planes at the company's Worldport hub in Louisville, Ky. (John Sommers II for Transport Topics)

Eighty-one unionized UPS Inc. flight dispatchers based at the company’s Louisville, Ky., Worldport hub voted unanimously to authorize their leadership to call a strike as contract talks continue, according to the union and a statement released from UPS on April 9.

UPS and the Transport Workers Union Local 549 have been at the bargaining table for more than two years. While at odds over the pace of negotiations, the sides are downplaying the possibility of a labor action in the near future.

A labor action, even a short one, could significantly disrupt much of the company’s delivery services. UPS makes 20 million ground deliveries worldwide each day, and its daily air cargo delivery service moves 2.9 million packages and documents a day, according to the company.

“The overnight express business would be severely hampered, not necessarily as much as shorter-length deliveries, which never sees the inside of an airplane. Anything longer than 500 or 600 miles would severely hamper the network,” said Donald Broughton, principal and managing partner of Broughton Capital.

“Under the U.S. labor law that governs airlines, this vote does not give the TWU the right to strike. The vote is simply a show of solidarity common in airline negotiations; there is no threat of a strike,” UPS said in a statement sent to Transport Topics. “UPS continues to negotiate in good faith for a contract that is good for our flight dispatchers, our customers and our company. We are confident talks will be completed without disruption to our customers.”

The talks are taking place under the supervision of a federal mediator and subject to the Federal Railway Labor Act, which seeks to avert walkouts by negotiating, arbitration and mediation to resolve disputes. The law has applied to airline labor talks since 1936.

The vote is simply a show of solidarity common in airline negotiations; there is no threat of a strike.

UPS Inc. statement to Transport Topics

The union said the strike authorization allows for it to ask to be released from federal mediation, then begin a strike after a mandatory 30-day cooling-off period. Even at that point, a strike could be averted by presidential action because the Railway Labor Act gives the president power to intercede if the labor action would “threaten substantially to interrupt interstate commerce to a degree such as to deprive any section of the country of essential transportation service.”

“I think the president of UPS in Atlanta would call [President Donald] Trump and say you need to intercede in this and not allow us to strike,” TWU Local 549 President Damon Wood said.

Flight dispatchers, like other employees in the airline industry, including pilots, mechanics and air traffic controllers, are licensed by the Federal Aviation Administration. They work with pilots and air traffic controllers to plan a plane’s route, track the flight, calculate the fuel usage, keep abreast of weather conditions and coordinate with the crew and mechanics in the event of an in-flight maintenance issue.

The union said it is demanding pay and benefit increases that would take it closer to others in the aviation industry because, the union claims, its members have not received a cost-of-living increase in four years and are earning about 26% less than dispatchers with the major air carriers.

“The UPS proposal currently on the table for a 20-year employee would be $6,000 or $7,000 a year behind their counterparts at American, Delta and United,” Wood said. “They’re doing the exact same thing. The only difference is UPS is carrying packages, and the other airlines are carrying both passengers and packages.”

The parcel delivery company said, “UPS dispatchers have historically enjoyed industry-leading total compensation packages when you factor in pay, health care benefits (for both active and retired employees) and retirement (both a defined benefit pension plan and a 401(k). In fact, we’re the only major unionized carrier that still offers a pension plan to our dispatchers.”

The Atlanta-based company, which ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, posted a $1.1 billion profit, or $1.27 per share, in the fourth quarter of 2017 compared with a year-ago loss of $239 million, or 27 cents. UPS has 434,000 employees worldwide.

UPS is expected to report earnings April 26 before the market opens. The report will be for the fiscal quarter ending March 31.