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UPS strike could be severe
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July 31, 1997: 2:46 p.m. ET
Competitors say they can't handle UPS volume if Teamsters walk out
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NEW YORK (CNNfn) - Since the Teamsters rejected United Parcel Service's "last, best and final" offer on a new contract Thursday, who will handle the shipping giant's 12 million packages a day if there's a strike?
Not Federal Express. Or Roadway Package Systems or Airborne Express or DHL Worldwide Express. Each of the carriers on Thursday said they don't have sufficient capacity and have to protect their own customers.
"The volume of business that UPS does is enormous," said Bram Johnson, vice president of marketing at Pennsylvania-based Roadway Package Systems (RPS). "None of us has that kind of capacity waiting for [a strike] to happen."
The International Brotherhood of Teamsters on Thursday turned down the UPS plan after more than four months of increasingly contentious talks. But the union leadership offered to keep negotiating past the midnight strike deadline.
The current four-year pact expires at midnight Thursday.
UPS, meanwhile, blasted the Teamsters for rejecting the terms. Norman Black, spokesman for the company, said the Teamsters oppose UPS's proposal to restructure pension benefits.
"We're getting very frustrated because the Teamsters have been dragging their feet and stalling these talks," Black said.
UPS would create its own pension fund that it says would increase monthly pensions by 50 percent. Employees now have a pension with Teamsters from other companies. Black said Teamsters would sit on the new pension board and have influence in how it is managed.
"We are making a very substantial proposal here that we think the union members would applaud," Black said.
Ken Hall, co-chairman of the Teamsters' negotiating team, said the UPS offer didn't address key issues such as more full-time jobs, health and safety factors, and the end of subcontracting.
"UPS claims to have made a final offer," Hall said. "The fact is the last offer that UPS has put on the table does not address all of the serious issues."
Other new terms proposed by UPS include a first-time profit sharing plan, higher wages of $1.50 to $2.50 an hour, and a bonus in the year 2000. About 10,000 part-time employees would move into full-time jobs.
Some hope for a settlement still remained Thursday afternoon as the union said it would be willing to meet with UPS offiicials - with or without a federal mediator.
For months, businesses have been anxiously waiting to see what would happen with the negotiations. UPS, a privately-held company, ships millions of packages for businesses every day.
David Fonkalsrud, a spokeman for DHL in California, said other carriers couldn't fill the void.
"It would be impossible for even all of the players in the industry to absorb that business," he said. "It would be physically impossible."
RPS hasn't taken any new customers since July 1, Johnson said. The company started warning businesses in early March about the possibility of a strike, and that they wouldn't be able to use RPS unless they were regular customers by July 1.
Airborne, based in Seattle, took a similar stance. The company said it will take on UPS customers who also ship with Airborne -- on two conditions. The packages don't get the same guarantee of delivery, and they will be shipped on trucks instead of airplanes, said spokesman Tom Branigan.
"It's to preserve the integrity of our transportation system," Branigan said. "You're talking a huge volume of [UPS] shipments."
Federal Express said in a statement that it would limit extra volume to make sure service for its longtime customers isn't hurt.
"FedEx is not going to go out and rent more airplanes," Johnson said. 
-- Martine Costello
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