According to Supply Chain Dive, parcel specialists say UPS customers should already be thinking about how to limit exposure if the International Brotherhood of Teamsters and UPS face another high-stakes negotiation cycle. The current national contract was ratified in 2023 after tense talks and ends July 31, 2028. A stoppage is not imminent, but agreements inked with UPS today typically run about three years and can outlast that labor deadline.
Contract timing and exit costs
Kenneth Moyer, partner and chief supply chain officer for strategic advisory at LJM, told Supply Chain Dive that shippers weighing new UPS deals need a contingency plan before they commit. In 2023, many firms shifted volume to FedEx, the U.S. Postal Service, and other carriers ahead of a possible strike that did not happen. Contract terms may block a quick pivot: early termination fees are increasingly common, so moving contracted packages elsewhere can trigger penalties. Moyer gave the example of signing with UPS now, reaching the Teamsters contract end date, and then trying to add a FedEx safety valve contractually while still under UPS terms.
What UPS and the union are signaling
On a July 28 earnings call, UPS CEO Carol Tomé said the company is signing shipper agreements that extend well beyond 2028, citing customer trust and confidence in managing negotiations. Teamsters General President Sean O'Brien has said the union must stay on offense ahead of the next fight, including fair treatment for part-time workers who load trucks. Wage gaps for part-timers stalled prior talks before pay increases were agreed. Priorities cited by Teamsters for a Democratic Union include non-union gig work at subsidiary Roadie, overtime, and pension and health benefits. UPS has cut tens of thousands of jobs and closed facilities as volume from Amazon has fallen, and the union and company have clashed over layoffs, peak-season threats, and driver buyouts since ratification.
Practical steps for operations and procurement
Moyer recommends that UPS-heavy operations prepare the backbone to use other carriers, including the ability to produce labels outside UPS after years on a single platform. Joe Wilkinson, VP of professional services at Intelligent Audit, told Supply Chain Dive that waiting until months before 2028 to secure FedEx capacity will be costly; carriers limit new volume when peers face labor disruption, as seen when Canada Post struck in 2024 peak season. Beyond dual sourcing, customers can negotiate agreement language. Matt Sumowski, head of GTM, parcel intelligence at Loop, said multiple shippers have secured clauses addressing extenuating circumstances that do not name a Teamsters strike explicitly but allow discussion with UPS over obligations when events outside the shipper's control disrupt service. Protection depends on leverage and knowing what to ask for, he said.