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  • Writer's pictureThe San Juan Daily Star

The delivery business shows why unions are struggling to expand

An Amazon delivery worker pushes a cart piled with packages in Manhattan, on Nov. 28, 2023. Many workers who deliver Amazon packages are employed by contractors, which for the most part are small businesses that can be hard to organize. (Tony Cenicola/The New York Times)

By Peter Eavis

Last year, two unions representing workers at three large automakers and UPS negotiated new labor contracts that included big raises and other gains. Leaders of the unions — the United Auto Workers and the Teamsters — hoped the wins would help them organize workers across their industry.

The UAW won one vote to unionize a Volkswagen factory in Tennessee last month and lost one this month at two Mercedes-Benz plants in Alabama. The Teamsters have made even less progress at UPS’ big nonunion rivals in the delivery business, Amazon and FedEx.

Polling shows that public support for unions is the highest it has been in decades. But labor experts said structural forces would make it hard for labor groups to increase their membership, which is the lowest it has been as a percentage of the total workforce in decades. Unions also face stiff opposition from many employers and conservative political leaders.

The Teamsters provide an instructive case study. Many of the workers doing deliveries for Amazon and FedEx work for contractors, typically small and medium-size businesses that can be hard to organize. And delivery workers employed directly by FedEx in its Express business are governed by a labor law that requires unions to organize all similar workers at the company nationally at once — a tougher standard than the one that applies to organizing employees at automakers, UPS and other employers.

Some labor experts also said the Teamsters had not made as forceful a push as the UAW to organize nonunion workers after securing a new contract with UPS.

“You didn’t have that energy that you saw with the UAW’s leaders,” said Jake Rosenfeld, a sociologist who studies labor at Washington University in St. Louis.

Teamsters officials said the UPS deal, which increases the average annual compensation, including benefits, of a UPS driver to $170,000 from $145,000, was helping them gain members. At DHL, a delivery company where the union has long had a big presence, the union added 1,100 members last year and is pushing to gain another 1,500. The Teamsters are also pursuing a legal challenge against Amazon that could allow them to gain ground at the company and its contractors.

“It’s been very helpful for us to mobilize,” Sean O’Brien, the Teamsters’ president, said in an interview, referring to the UPS contract. “We’ve set the standard in the industry.”

But the union has also suffered losses. Yellow, a trucking company that employed 24,000 Teamsters, shut down and filed for bankruptcy protection last year.

Amazon and FedEx said they were confident in their approach to managing and compensating workers. Amazon said it had made investments that bolstered pay and benefits at its delivery contractors. FedEx said its nonunion model allowed it to quickly increase pay whereas UPS’ union employees were bound by the terms of five-year contracts.

“Our culture, built and tested over 50 years, is based on the philosophy that if we take care of our people, they will deliver outstanding service for our customers, which will drive business results for our company,” Tracy Brightman, FedEx’s chief people officer, said in a statement.

Around 310,000 UPS employees belong to the Teamsters. Many of them see FedEx and Amazon drivers on their routes and talk about pay, benefits and working conditions.

“We make much more money than anyone else in the industry,” said Essence Carlisle, a part-time package handler at UPS’ hub in Louisville, Kentucky. “I definitely intend to make a career here.”

The UPS deal gave part-time employees, over half the company’s unionized workforce, a 26% raise, to at least $21 per hour. Carlisle makes close to $24 an hour and works around 20 hours a week, giving her time to run a bakery on the side, she said. Her friends who have full-time driving jobs at Amazon make around $19 an hour, she said.

As big as the raises at UPS were, they did not increase pay by a lot more than inflation. The top wage rate immediately after the latest deal, $44.25 per hour, was 22% higher than five years earlier. Over that period, consumer prices rose 21%.

Under the Teamsters’ deal with UPS, the top hourly wage will increase to $49 by the end of the five-year contract. Amazon said in January that the average pay of workers at its delivery contractors was $20.50 in the United States. FedEx declined to provide an average wage rate for its delivery workers.

Despite UPS’ superior pay over the years, the Teamsters have not made many inroads at FedEx or Amazon.

The high turnover of delivery and warehouse workers at Amazon and FedEx — where each part-time position was on average filled and vacated twice last year — makes it difficult to organize them.

Another challenge is that delivery workers at Amazon, and drivers who deliver for FedEx Ground, are employed by contractors. Rosenfeld said trying to organize a few dozen people at each contractor could be time consuming and costly.

At FedEx, there is another potential barrier to unionization.

FedEx was founded as an airline, and employees of its Express business come under the Railway Labor Act, which requires unions to organize nationally, across a whole company, at once. Union officials say it’s easier to hold individual votes at each company location as allowed under the National Labor Relations Act, which governs workers at UPS and automakers.

Even so, some FedEx employees do belong to a union. Nearly 6,000 pilots at FedEx Express are represented by the Air Line Pilots Association. The Teamsters are trying to organize the mechanics who work on the company’s planes.

FedEx said its delivery workers had benefited from not being in a union because the company raised wages significantly during the home-delivery boom of 2021 and 2022, when UPS workers’ raises were set by an agreement reached before the pandemic. A FedEx spokesperson noted that the company incurred an additional $1.4 billion in labor costs in its 2022 fiscal year.

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May 30

The challenges facing union expansion are exemplified in the clipping path service provider delivery business. With the rise of gig economy platforms, traditional labor organizing faces hurdles like worker classification and lack of collective bargaining power. These barriers impede unions' efforts to extend their reach. As the workforce landscape evolves, unions must innovate strategies to adapt and effectively represent workers' interests in the dynamic gig economy.

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