1. Teamsters Tells UPS Regional Contracts Need Completed Before National Negotiations Will Begin
Negotiations between the Teamsters union and UPS on a national contract agreement were scheduled to begin today, April 17. Last week, the union notified UPS that they wouldn’t negotiate on a national level until all regional contract negotiations were completed.
The Teamsters said that only 10 of 40 regional contracts have been agreed upon since those negotiations began in January, blaming UPS for delays.
UPS has noted that supplemental regional and national contract negotiations often occur simultaneously, and has stated they’ll be in Washington D.C. today, ready to negotiate on both levels.
2. Use of Dynamic Pricing Increasing in Parcel Industry
Over the past year, FedEx and UPS have slowly increased their usage of pricing models that shift based on demand. UPS’ demand surcharge has become more prevalent in recent years, and FedEx used a dynamic pricing program based on customers’ volume shipped earlier in the year to profit $150 million during peak season.
Future dynamic pricing advancements could allow carriers to increase pricing at times of low capacity to capitalize on demand, and lower pricing when needing additional volume in their networks. Some are predicting an increase in ZIP code and delivery-area based pricing fluctuations, similar to current Delivery Area Surcharges.
3. Walmart eCommerce Facility Layoffs Pass 3k
Walmart views eCommerce as a massive opportunity. In early April, Chief Financial Officer John David Rainey said that “high return areas like eCommerce, supply chain, and store investments” will see about 90% of Walmart’s capital expenditures. The company’s massive brick and mortar footprint grants them a network of last-mile fulfillment centers that sits within 10 miles of 90% of the U.S. population.
The future Walmart envisions for their eCommerce operations features a heavy use of robotics. By 2026, they expect 65% of stores to have automation capabilities, and 55% of fulfillment center volume to move through automated facilities.
The implementation of robotics has led Walmart to lay off over 3,000 warehouse workers across 4 states in recent weeks.