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Surviving the UPS strike
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August 5, 1997: 3:09 p.m. ET
Companies like Mail Boxes Etc. stand to lose significant business in walkout
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NEW YORK (CNNfn) - With United Parcel Service hobbled by Teamsters picketers for a second day Tuesday, thousands of franchise owners at Mail Boxes Etc. were scrambling to deliver 70,000 packages.
That's how many parcels Mail Boxes sends through UPS every day, representing roughly 55 percent of the company's business, or 18 million packages yearly.
The strike is already causing severe disruptions to thousands of U.S. companies like Mail Boxes, whose business relies on the package carrier giant.
"It is significant in its impact," said Jim Amos, president and chief operating officer at the San Diego-based company. "We do millions of packages a year with UPS."
Mail Boxes provides shipping, packaging and mailbox services at 2,800 individually-owned U.S. franchises. Its primary customers are small businesses and "road warriors," or individual traveling salesmen. There are another 500 franchises in Canada, South America, Mexico and other countries overseas.
Mail Boxes uses the U.S. Postal Service and UPS for packages that travel on the ground. During the strike, most of those packages are going through the U.S. mail service. Some are also going through Pennsylvania-based RPS, a business-to-business carrier.
UPS, meanwhile, was virtually paralyzed Tuesday as the walkout of 185,000 workers created tense scenes at picket lines across the country. UPS handles 12 million packages a day, or roughly 80 percent of the industry traffic.
Talks between UPS and the union broke down this weekend, and the Teamsters ordered its members off the job at 12:01 a.m. Monday. The two sides haven't come to the table since, although federal mediator John Calhoun planned to urge them to resume negotiations.
President Clinton has refused to step in, arguing he has no authority because the strike doesn't threaten the nation's economic health.
UPS and the Teamsters are at odds over pay and benefits as well as the use of outside contractors. The union is pushing for more full-time jobs while the company wants to dramatically reform the pension plan.
The strike comes at a time when Mail Boxes (MAIL) is hoping to finalize a $276.9 million merger, announced in May, with U.S. Office Products (OFIS). U.S. Office Products referred all comments to Amos, who said his company has had time to plan for a possible strike and that it hasn't affected the merger.
But it certainly is affecting business - costing the company an estimated $100,000 a month while the strike lasts. The losses could hurt individual franchises even more, Amos said, potentially reducing their business by 10 percent.
"The strike could impact some individual [franchises] more significantly, without a doubt," Amos said. "That's why I hope if this is extended, the president does the prudent and wise thing and intervenes." 
-- Martine Costello
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UPS
Mail Boxes, Etc.
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