{"id":247572,"date":"2023-08-09T15:32:26","date_gmt":"2023-08-09T15:32:26","guid":{"rendered":"https:\/\/www.bnreport.com\/?p=247572"},"modified":"2023-08-09T15:32:26","modified_gmt":"2023-08-09T15:32:26","slug":"ups-warns-of-diminished-profits-due-to-labour-agreement","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/ups-warns-of-diminished-profits-due-to-labour-agreement\/","title":{"rendered":"UPS Warns of Diminished Profits Due to Labour Agreement"},"content":{"rendered":"<p style=\"text-align: justify;\"><a href=\"https:\/\/www.bnreport.com\/en\/\"><strong>BNR<\/strong> <\/a>&#8211; Shipping powerhouse <a href=\"https:\/\/www.ups.com\/\">UPS<\/a> has issued a cautionary statement, anticipating diminished profits for the current year. This is partly due to the pay escalations it recently approved for its US workforce in a labour agreement.<\/p>\n<p style=\"text-align: justify;\">It revealed that the new five-year contract guarantees that a driver\u2019s annual earnings are set to rise to approximately $170,000. The earnings are up from the current $145,000 level.<\/p>\n<p style=\"text-align: justify;\">These upward adjustments come against the backdrop of the inflation witnessed in the United States over the past four decades. Inflation has seen prices surge by 3 per cent in the year leading up to June. This was preceded by a staggering 9 per cent leap in the previous year.<\/p>\n<p style=\"text-align: justify;\">As rising living expenses strain household budgets, labour tensions have reached a boiling point.<\/p>\n<p style=\"text-align: justify;\">The Teamsters union recently threatened a strike that prompted customers to divert approximately one million daily packages to competing firms. This resulted in a sales hit of around $200 million for UPS.<\/p>\n<p style=\"text-align: justify;\">During an investor update call on Tuesday, UPS highlighted the impact of the Teamsters\u2019 deal. This deal, while advancing workers\u2019 interests, will exert pressure on the company\u2019s profits.<\/p>\n<p style=\"text-align: justify;\">The revised projection for the adjusted operating margin this year is now 11.8 per cent. It is a decline from the earlier estimate of 12.8 per cent in May. Also, this decline is also reflective of a dip in shipments amid a weakened economy.<\/p>\n<h1 style=\"text-align: left;\"><strong>Labour Agreement and Inflation Concerns Amidst Rising Wages<\/strong><\/h1>\n<p style=\"text-align: justify;\">UPS holds the distinction of having the largest unionised workforce among US companies known for its relatively robust compensation structure. The company\u2019s drivers, earning an hourly wage of $40 or more, have been the subject of widespread media attention.<\/p>\n<p style=\"text-align: justify;\">The recently ratified Teamsters contract bolsters starting pay for part-time employees to $21 an hour. Moreover, it recognises Martin Luther King Jr Day as a holiday for the first time ever. It also secures enhanced working conditions, including a commitment to providing air conditioning in new delivery vehicles.<\/p>\n<p style=\"text-align: justify;\">For drivers, the Teamsters deal will result in a $2.50 per hour pay raise this year, followed by an increase of $7.50 per hour over the contract\u2019s five-year duration.<\/p>\n<p style=\"text-align: justify;\">Economy experts are closely monitoring these wage hikes, concerned that they could contribute to an ongoing inflation issue.<\/p>\n<p style=\"text-align: justify;\">This labour agreement and its subsequent wage adjustments come at a time when US wage growth has surpassed price growth for the first time in over two years. The average hourly wage in the US was $34 in July, while employer compensation costs averaged around $43 per hour.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>BNR &#8211; Shipping powerhouse UPS has issued a cautionary statement, anticipating diminished profits for the current year. This is partly due to the pay escalations it recently approved for its US workforce in a labour agreement. It revealed that the new five-year contract guarantees that a driver\u2019s annual earnings are set to rise to approximately [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":247575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43],"tags":[278,12149,12241,12145,12148],"class_list":["post-247572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-featured","tag-teamsters","tag-truck-drivers","tag-ups","tag-ups-strike"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UPS Warns of Diminished Profits Due to Labour Agreement - Business News Report<\/title>\n<meta name=\"description\" content=\"BNR - Shipping powerhouse UPS has issued a cautionary statement, anticipating diminished profits due to the labour agreement.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bnreport.com\/en\/ups-warns-of-diminished-profits-due-to-labour-agreement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPS Warns of Diminished Profits Due to Labour Agreement - 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