UPS (UPS) faces a potential job action in its industrial trucking unit, though a UPS strike would affect shipping customers — not homes and businesses — who have been told to make alternative plans ahead of a union workers' contract vote next week.
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UPS Freight workers nixed a tentative contract in October and are set to vote on updated terms, the Wall Street Journal reported late Thursday. With a contract extension set to expire Nov. 12, the delivery giant faces the prospect of 11,000 Teamsters members going on strike.
It would be the first work stoppage at UPS since 1997. The freight division ships heavier goods and bulk shipments, including to retail stores.
The company told customers it will stop picking up heavy shipments Wednesday. It also said it can only guarantee ground shipments through Thursday. A spokesman said UPS "cannot afford to put our customers' volume at risk of being stranded in our system."
Potential UPS Strike Hits Stock
UPS stock sank 1.4% to 106 on the stock market today. Shares fell further below the 200-day line after the company offered lackluster guidance during its Oct. 24 earnings report. Rival FedEx (FDX) lost 1.1%. Amazon (AMZN), a key customer that is growing its own delivery strategy, briefly reclaimed its 200-day line before closing flat.
Residential and business customers won't be affected by the potential UPS strike.
Workers in the division that delivers packages to homes and businesses ratified their tentative contract last month.
For UPS, the strike comes at a particularly tough time. Besides the upcoming holiday season, delivery and trucking companies confront tight capacity and a driver shortage as volumes surge in a robust economy.
The impact is being felt across the retail and manufacturing industries. Kellogg (K) saw rising freight costs hit earnings in the latest quarter. Coca-Cola (KO) and Kraft Heinz (KHC) are raising prices to offset higher costs.
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The post UPS Faces Possible Strike As Teamsters Eye Vote Next Week appeared first on Investor's Business Daily.
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