How much money do UPS drivers make per year?
Just months after UPS and the Teamsters Union signed a new contract averting a strike, the company plans to cut 12,000 jobs after a disappointing 2023.
UPS Teamsters ratified a new five-year contract with the package delivery company, narrowly averting a strike this summer. Touted as “the most historic collective bargaining agreement in the history of UPS,” it will see pay increases across the board and over 60 changes and improvements to the national master agreement.
However, the chief executive of United Parcel Service, Carol Tomé announced on a recent earnings call that the company will lay off 12,000 workers in the first half of the year. After seeing business surge and sales topping $100 in 2022 for the first time, UPS saw package volumes drop in the run-up to the potential walkout. While roughly 60 percent of the lost volume as returned, revenue was down over 9 percent in 2023.
The company is forecasting volumes to decrease in the first half of 2024 before rising again in the latter half. Tomé described the situation and near-term prospects as “difficult and disappointing.” The lower performance last year was blamed on “the macro environment and some due to disruptions associated with our labor contract negotiations as well as higher costs associated with the new contract,” she said.
UPS’s CEO told analysts on the earnings call that the move, it is hoped, will save the company $1 billion. The roughly 340,000 union jobs covered under the new contract will not be part of the headcount reductions, which will mainly affect manager and contract positions.
How much money do UPS drivers make per year?
As part of the new five-year contract drivers across the board saw a pay increase implemented retroactively. The new national master agreement gave all UPS drivers a $2.75 per hour pay raise retroactive to 1 August 2023. Over the life of the contract total wage increases will be $7.50 per hour.
The average annual pay for UPS drivers by the end of the contrwill be $170,000 once benefits are included according to Tomé speaking on an earnings call this summer.act agreement
The contract raised pay for existing part-time drivers to no less than $21 per hour, which was made effective immediately. This is also now the starting wage for new part-time hires, increasing to $23 per hour. The total wage increase for part-time drivers over the length of the contract will be 48 percent on average.
The average top rate for full-time drivers will rise to $49 an hour keeping UPS Teamsters the highest paid delivery drivers in the US.
“Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry,” said Teamsters General President Sean M. O’Brien in a press release this summer. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.”
Other conditions of the UPS Teamsters’ contract
In addition to the pay increases, the new national master agreement does away with the two-tier pay system immediately reclassifying 22.4 Drivers to Regular Package Car Drivers and placing them into seniority. As well, drivers will no longer be forced to do overtime on their days off. UPS also agreed to create 7,500 new full-time positions and fill 22,500 open positions.
Beginning 1 January 2024, all larger delivery vehicles, sprinter vans, and package cars will be equipped with in cab air conditioning. While the company will not install all existing vehicles with air conditioning, it will retrofit the entire fleet with systems to reduce the health and safety risks from hot weather.
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