As the July 31 deadline for establishing a new United Parcel Service/Teamsters contract approaches, the Retail Industry Leaders Association called for a quick resolution given the potential impact on the retail sector and the economy in the United States.
The threat of a Teamsters strike comes after the resolution of a labor dispute at West Coast ports, as well as one involving railways hat also loomed over the supply chain.
RILA noted that the modern supply chain relies on home delivery, so a disruption of fulfillment functions because of a lack of delivery vehicles operating would be a critical disruption. RILA noted:
As leaders within the U.S. economy, we are growing increasingly concerned with the stalled contract negotiations between UPS and the Teamsters. Reliable and quick shipping, ensuring the timely delivery of essential goods such as groceries, medicine, and school supplies to customers’ doorsteps, is the hallmark of our industry and the UPS fleet plays a critical role in that operation. Uncertainty is like kryptonite for supply chains. While retailers maintain flexible and resilient supply chains, adept at navigating challenges to deliver for consumers, the impact of a UPS worker strike would undoubtedly be felt throughout the economy, to the tune of billions of dollars. Retailers are preparing contingency plans, but even the most robust planning won’t shield retailers or consumers from the impact of shutting down a key component in the supply chain as we head full-steam into back-to-school and then holiday shopping seasons.
The impact of a supply chain disruption is no longer an academic exercise. We need only look in our rear-view mirror to see the economic and consumer harm that resulted from supply chain bottlenecks and delays that rippled throughout the economy post pandemic. Having worked through these challenges methodically over the past two years, retailers are loath to stress-test contingency plans again. We remain optimistic that, with the nationwide implications in mind, a resolution can be reached soon. We urge all negotiating parties to remain at the table until a deal is reached that keeps this vital supply chain link operating at full capacity.
