UPS, pilots quickly reach agreement

By Staff -- Logistics Management, 2/1/1998

Only six days after resuming contract negotiations on Jan. 12, United Parcel Service and the union representing its pilots, the Independent Pilots Association (IPA), reached terms on a new contract last month. The agreement covers the 2,100 air-crew members who operate UPS's fleet of 214 jet aircraft--the 10th-largest airline in North America.

The two sides issued a statement announcing the agreement but are withholding details until they work out final language for presentation to the company's pilots. The joint statement did say, however, that the agreement provided for substantial pay increases, improved working hours, and better working conditions. Once pilots receive the final language, voting on the contract by mail ballot will take about a month.

It appears likely that the settlement is comparable to an agreement that Federal Express reached with its pilots in December. When the UPS talks resumed, IPA President Capt. Robert Miller stated that parity with FedEx was one of the union's goals. "We're not looking for a 'best in the industry' contract. All we want to do is close the gap with our peers at FedEx," he said. (Federal Express and the pilots' bargaining unit, the FedEx Pilots Association, reached agreement on a four-year contract in December. Pilots were scheduled to vote on it last month.)

The UPS contract agreement came after 30 hours of non-stop talks under the supervision of the National Mediation Board. That the two sides reached an agreement so quickly after achieving little progress for the last two years came as something of a surprise. When the union rejected UPS's last offer in September, in fact, Miller had intimated that a strike against UPS around Christmastime was a possibility.

But UPS had to be anxious to settle as quickly as possible. A 15-day strike by its Teamsters employees last summer crippled the company's operations, angering shippers and delaying millions of shipments. UPS, therefore, could ill afford another work stoppage. If the pilots had walked out, moreover, the Teamsters probably would have walked with them to repay the pilots' support for their strike.

The UPS-IPA talks began in December 1995. A year later, UPS asked for federal mediation, and a federal mediator was assigned to the case. Last May, the pilots voted with near unanimity to authorize a strike. After the Teamsters strike, UPS offered its "last, best, and final" offer to the pilots' union--a proposal that the pilots rejected. The National Mediation Board then recessed the talks until last month. Under the Railway Labor Act, which governs the negotiations, that recess essentially barred the pilots from striking during November and December.