Union Slows UPS Automation

(p. B1) As UPS tries to satisfy America’s 21st-century shopping-and-shipping mania, parts of its network are stuck in the 20th century. The company still relies on some outdated equipment and manual processes of the type rival FedEx Corp. discarded or that newer entrants, including Amazon.com Inc., never had.
UPS says about half its packages are processed through automated facilities today. At FedEx, 96% of ground packages move through automated sites. UPS workers are unionized; FedEx’s ground-operations workers aren’t.
. . .
(p. B2) UPS is negotiating with the International Brotherhood of Teamsters to renew a five-year contract, which expires July 31. Representing 260,000 UPS drivers, sorters and other workers, the union wants UPS to hire more full-time workers to help handle the surge in packages. It has opposed technology such as autonomous vehicles and drones and is wary of projects that do work with fewer employees.
“The problem with technology is that it does ultimately streamline jobs,” says Sean O’Brien, a Teamsters leader in Boston. “It does eliminate jobs. And once they’re replaced, it’s pretty tough to get them back.”
FedEx, with no unionized workforce in its ground network, doesn’t have to worry as much about labor strife. And because it built its ground network more recently, it hasn’t had to retrofit older facilities with automation. “For an older hub, automating is like heart surgery,” says Ted Dengel, FedEx Ground’s managing director of operations technology. “We can drop automation in before a package hits a facility.”

For the full story, see:
Paul Ziobro. “UPS is Running Late.” The Wall Street Journal (Saturday, June 16, 2018): B1-B2.
(Note: ellipsis added.)
(Note: the online version of the story has the date June 15, 2018, and has the title “UPS’s $20 Billion Problem: Operations Stuck in the 20th Century.”)

Leave a Reply

Your email address will not be published.