Two years remain before the collective bargaining agreement between United Parcel Service and its 330,000 unionized drivers and package handlers expires. Normally, that would still be relatively early for a new round of labor confrontation.
For the Teamsters, however, the battle lines are already being drawn.
In a series of Teamsters-produced podcasts that began in mid-July, union president Sean O’Brien has repeatedly warned UPS that rank-and-file workers will be prepared to strike in 2028 unless the company agrees to demands that go beyond the already lucrative agreement currently in force. O’Brien has described the existing contract as “historic” in terms of wages and benefits, while insisting that the next deal must go further.
Among the issues the union expects to put on the bargaining table are potential attempts to reduce healthcare and pension benefits, increased automation, the deployment of autonomous trucks, and what the Teamsters describe as the outsourcing of last-mile delivery and supply chain activities to non-union subsidiaries.
One of the union’s most significant new demands would go even further: all four Teamsters regions covered by supplements to the national master agreement should have the right to strike during the life of the contract if the union and UPS reach an impasse over unresolved grievances.
“It’s going to be a battle and we are probably going to strike UPS,” O’Brien said during an episode of the “Better Bad Ideas” podcast. “I mean, we have to because they don’t respect us. They don’t do what they’re supposed to do on the obligation of the contract. They fight us on everything.”
The hostile rhetoric is notable because Teamsters and UPS have traditionally had contentious relations, but such aggressive positioning this far ahead of formal negotiations is unusual.
Once a contract is signed, unions generally lose their most powerful weapon — the strike — until the agreement expires. The purpose of a collective bargaining agreement is to provide operational stability for both the company and its workforce. During that period, union leaders normally concentrate on enforcing existing provisions rather than seeking additional concessions. Disputes are typically handled through established grievance and arbitration procedures.
O’Brien, however, has continued to attack UPS CEO Carol Tomé and her management team, arguing that they are disconnected from employees’ concerns. The tone fits O’Brien’s outspoken persona — he has even joked about his initials, SOB — but the intensity of the comments raises a broader question: how much room will remain for compromise when negotiations formally begin?
“She makes $29 or $30 million per year and all she cares about is the bottom line and the balance sheet and the stockholders. She doesn’t care about the employees who have made this company successful for 70 years,” O’Brien said in another podcast.
According to UPS securities filings, however, Tomé’s actual total compensation in 2025 was $22.8 million, with most of that amount coming from the value of stock awards.
“This lady is fucking delusional. And I cannot wait to get to the bargaining table to address our members’ concerns, but also to hold this company accountable,” O’Brien said.
He was responding to public statements made during earnings calls in which UPS management credited the company’s completed transformation plan — including a reduction in Amazon volume and a restructuring of its network — with helping restore profit growth.
O’Brien strongly rejected that interpretation.
“She doesn’t even mention the most important people that work for this company. That’s the rank and file members, the men and women who go there and sacrifice time away from their families, sacrifice their bodies,” he said.
“That is the biggest bunch of bullshit that I’ve ever heard in my life. … The company’s always been profitable. She didn’t bring it back. Our members are the ones that make this profitable.”
A $30 billion contract already considered historic
UPS drivers and package handlers represented by the Teamsters ratified a five-year contract in August 2023. The union valued the agreement at approximately $30 billion.
The deal delivered a $2.75-per-hour wage increase during the first year for full- and part-time employees, followed by smaller annual increases. It also included 60 non-economic changes affecting working conditions.
By the end of the agreement, senior full-time drivers are expected to earn approximately $170,000 annually in wages and benefits.
Full- and part-time workers will receive an additional $7.50 per hour over the life of the contract. Existing part-time employees immediately saw their wages rise to $21 per hour, while new part-time workers start at $21 and progress to $23 per hour.
The agreement also eliminated the two-tier wage system for drivers performing the same work, bringing junior drivers into seniority status.
Despite those gains, the Teamsters are already preparing for the next fight.
The union plans to formally launch its next contract campaign in fall 2027. O’Brien, however, has made clear that preparations are already underway.
The stakes extend far beyond the relationship between UPS and its employees.
UPS delivers more than 16 million packages every day, representing roughly 17% of total domestic package volume. Its total global volume is estimated to account for between 5% and 6% of U.S. GDP. A nationwide strike could therefore disrupt supply chains and operations for approximately 1.5 million business customers relying on UPS for package and freight delivery, particularly as the peak shipping and holiday seasons approach.
There is also a possibility that UPS executives could view a strike differently as an opportunity to stop the continued rise in labor costs and fundamentally reshape the company’s delivery model.
“We are focused on running a safe, reliable and successful business that provides industry-leading service for our customers, creates opportunities for our people and positions UPS for long-term growth,” UPS spokeswoman Gennevieve Bowman said in a statement to FreightWaves.
“The current agreement remains in place through July 31, 2028, and we remain committed to working with the Teamsters as we have for more than a century.”
UPS maintains that its contract provides industry-leading compensation and benefits, including annual wage increases and cost-of-living adjustments. The company points to a top driver wage of $45.75 per hour and healthcare coverage for part-time employees that requires virtually no employee contribution, including no premiums and low or no co-pays.
Some industry analysts nevertheless believe UPS must take a harder line with the union if it wants to bring labor costs closer to industry standards while remaining competitive in parcel delivery.
Satish Jindel, president of parcel analytics provider ShipMatrix, recently argued that a strike could give UPS an opportunity to break its dependence on union labor by recruiting outside drivers at significantly lower costs, potentially allowing the company to regain dominance in last-mile delivery.
UPS is changing its business strategy
UPS has already been streamlining its domestic parcel network, improving productivity and reducing its cost per package.
At the same time, the company has been shifting its strategic focus away from traditional parcel delivery toward market segments where its end-to-end capabilities can command greater value.
Those areas include complex healthcare shipments, small and medium-sized businesses, industrial and automotive customers, and B2B delivery.
UPS has promoted this premium-segment strategy for almost two years. Its Aug. 31 announcement about reorganizing the operating model around full-service global logistics solutions provided another indication that local e-commerce parcel delivery is no longer the company’s primary strategic priority.
That raises an important question: if UPS is deliberately moving away from traditional parcel delivery, how much would a strike by frontline workers actually matter to the company?
“This is crunch time for UPS and Teamsters. Their cost to serve remains extremely high. It’s an albatross for them. This is really going to be a seminal moment for UPS to try and change their business strategy,” said a former UPS executive who spent more than 20 years in a senior management position.
The executive spoke on condition of anonymity because he continues to work in the freight industry and did not want to risk professional backlash.
“Do you continue to slog along with a similar high cost structure, where you are the outlier, or do you really go to the mat, which would mean some sort of a work stoppage? I’m confident those types of conversations are taking place internally. What I don’t know is the level of willingness to take on that pain,” he said.
“I can guarantee you they are thinking about it. What’s the breaking point? How much can we tolerate?”
The lessons of the 1997 UPS strike
The last nationwide UPS strike took place in 1997.
The walkout lasted 15 days and cost UPS more than $600 million in lost business, according to a New York Times report at the time.
“There was a tremendous hangover, both culturally and on the business side,” the former UPS executive said.
He argued that the company underestimated how long it would take for customers and volumes to return after the strike.
“The calculations on how quickly the business would come back after the strike were too ambitious. It took a long time for people to come back. And it led many shippers to decide never to single source again. They split their volume to avoid getting caught without options.”
UPS generated $88.7 billion in revenue last year. The Teamsters argue that the company has the financial capacity to increase compensation further.
UPS also spent $1 billion on stock buybacks in 2025.
Richard Metzler, a veteran logistics executive whose career has included senior positions at FedEx, DHL, XPO and uShip.com, offered a different interpretation of the 2023 Teamsters victory.
“The irony of the 2023 Teamsters victory is that while it secured $65/hour total compensation, it forced UPS to aggressively shrink its network, automate hubs and cut thousands of positions to preserve margins on lightweight B2C freight,” Metzler commented in response to a FreightWaves article about Jindel’s strike prediction.
“They got their pound of flesh, but the Teamsters may have also mortgaged future union job growth in the process.”
Jindel argues that UPS is in a fundamentally different position today than it was three decades ago.
A strike that would have been extremely difficult to manage in 1997 could now be partially offset through Roadie, replacement drivers recruited from FedEx and a large pool of lower-cost alternative carriers that has emerged in recent years.
A strike “will be painful for three months, but that at least will correct the illness,” Jindel said.
“You have to amputate the leg to save the body. You already compromised the body with the last contract and this one will kill it. If they give in to the union they will have to remove their middle name. They won’t be a parcel carrier.”
O’Brien: “We are going to have to fight hard”
The Teamsters president has been unusually direct about his expectations for the 2028 negotiations.
In his “Better Bad Ideas” podcast appearances, O’Brien repeatedly portrayed UPS management as an adversary rather than a partner.
“We are going to have to fight hard to get what our members demand,” he said, warning members not to underestimate what he described as UPS management’s “trickery or foolery” during negotiations.
“We’re gonna go into this contract negotiations from a position of strength like we always do. But the one thing we’re gonna do differently is not take UPS at their word anymore because their word is no good.”
He accused the company of suffering from what he jokingly called “lie-abetes,” arguing that management’s statements and actions frequently do not match.
“So I cannot wait for 2028,” he said.
O’Brien also recalled a conversation in which UPS allegedly asked the Teamsters for help organizing FedEx or attracting additional business.
His response, he said, would have been different 10 or 12 years ago, when UPS was growing and hiring workers.
“But when you weren’t trying to eliminate jobs, when you weren’t subcontracting out of work,” he said, “it’s just funny. There’s no shame in their game.”
O’Brien was similarly dismissive of Tomé’s characterization of the Teamsters and UPS as long-standing “partners.”
When asked about the 2028 negotiations, Tomé had said the two sides had been partners for a long time and would presumably find a way forward.
O’Brien strongly disagreed.
“When you are opening up businesses, buying businesses [Roadie, Happy Returns] to try and compete with the core business that has made you the success you have been for decades upon decades upon decades, that’s not a true partnership,” he said.
The union president contrasted UPS with other employers with whom the Teamsters have what he described as genuine partnerships.
“UPS is not one of them.”
He also accused the company of losing its former focus on customer service and sales.
“There was a time at UPS where they were actually [urging] our members to bring in what they called sales leads, where they were hungry to get new business, where they actually cared about the customer, where they actually cared about service.”
O’Brien said he was “frightened” by what he sees as a lack of empathy among UPS executives.
“Look, 2028 is gonna be a very, very rough year for UPS.”
He also accused the company of mounting a public-relations campaign designed to portray the Teamsters as too rigid.
“We’re not destroying the package delivery business. She’s destroying the package delivery business,” O’Brien said, referring to Tomé.
“I want to be clear. We don’t have one fucking partnership with UPS. None whatsoever.”
He said the union has also rejected UPS requests for assistance with legislation or organizing competitors because the Teamsters are focused on defending their own members.
“As far as we’re concerned, we’re not gonna allow anybody to negotiate jobs away from us.”
The Teamsters are already preparing for a strike
O’Brien has repeatedly stated that a strike is not merely a possibility but an outcome he considers likely.
“We’ve not been shy in telling UPS and the public that we will strike to get the best contract,” he said. “We set the bar higher in 2023 and we have to achieve more in 2028.”
He encouraged UPS employees to begin preparing financially.
“We’re going to have to strike. We have a very rich strike and defense fund,” O’Brien said.
He advised workers to join a local credit union or bank and establish a dedicated weekly savings amount in anticipation of a potential work stoppage.
“We are going to pay an enhanced strike benefit if and when we do strike UPS,” he said, while emphasizing that employees have significant time to prepare financially.
“We have nothing to lose as a union. We are poised. We’re positioned. We’re gonna do exactly what we did the last time. We’re gonna have a contract campaign.”
O’Brien said he was not optimistic that the two sides would reach a tentative agreement without a strike.
“I am not optimistic of coming to a tentative agreement without striking UPS,” he said.
He also issued a warning to UPS shareholders.
“I hope the stockholders in Wall Street listen to this, because if I’m a stockholder and I’m dependent upon UPS to earn dividends, it’s going to be some tough times for you.”
The Teamsters, O’Brien noted, have struck more than 340 employers nationwide over the last five years. The union has also extended picket lines in support of workers at companies including Cisco, US Foods and Republic Waste Management.
Confrontation or compromise?
Not everyone agrees with the union’s confrontational approach.
One podcast listener challenged O’Brien over what the listener described as a constant stream of hostile statements toward UPS, arguing that customers could respond by moving their business elsewhere.
O’Brien dismissed the question as likely coming from a disgruntled UPS manager.
He argued that the hostility is a consequence rather than the cause of the conflict.
“If UPS did the right thing by their members, if they solved problems in a timely manner, if they adhered to the contract, then there’d be no complaints,” O’Brien said.
“UPS causes these problems. UPS chooses not to do the right things by their members. And if there’s consequences as a result of UPS’ bad behavior towards our members, so be it.”
He ended the exchange by telling UPS managers to stop listening to the podcast.
A new fight over the right to strike during the contract
One of the most consequential Teamsters demands for the next agreement concerns the grievance procedure.
Under the current system, the grievance process is one of the union’s principal mechanisms for forcing UPS to implement negotiated improvements or challenging company actions.
The Teamsters argue that UPS frequently delays resolutions, effectively wearing employees down until they accept conditions the union considers unfair, including alleged overtime abuses.
The union has already used the grievance process to push UPS on several issues.
After two years of limited progress, the Teamsters successfully pressured the company to accelerate air-conditioning retrofits for 5,000 delivery vans operating in hot-weather states.
In June, UPS met the deadline for upgrading 2,000 vehicles, with the remaining 3,000 scheduled to receive installations by next summer.
The company also withdrew its driver buyout program in the Central region after strong union opposition. It subsequently capped its nationwide voluntary separation offer at 7,500 drivers after the Teamsters argued that the program improperly weakened the union’s role as the workers’ bargaining representative.
Last year, coordinated strike threats by UPS Teamsters in the Central Region and Chicago Local 705 contributed to grievance settlements in the Central Region and a first contract for UPS administrators and specialists in Chicago.
Most union contracts prohibit strikes during the life of the agreement. At UPS, all supplements except the Central Region follow that general rule.
The Central Region supplement, however, permits the union to strike if the parties reach an impasse.
Grievances first move through panels at the local level. If no agreement is reached, issues involving union-wide matters can move to a national panel, while disputes concerning language in local supplements can proceed to arbitration.
The right to strike applies only when a deadlocked grievance concerns Central Region language rather than national contract language.
The provision remained unused until O’Brien invoked it in 2025.
After the two sides failed to resolve several workplace disputes, the Teamsters issued 72-hour strike notices at UPS Worldport in Louisville, Kentucky, and two other locations. The union also prepared to extend picket lines to additional air terminals.
Management quickly reached a settlement over disputes involving safety, seniority and subcontracting at a maintenance parts warehouse.
The concept is not entirely unprecedented in organized labor.
The 2023 collective bargaining agreement between the United Auto Workers and Stellantis included language allowing the union to strike over product and investment commitments after complaints had passed through the grievance procedure.
O’Brien wants UPS workers to have a similar weapon across the country.
“UPS does not respond to time sensitive issues. And the only thing UPS understands is the threat of a strike,” he said.
“UPS, true to their character, always tries to skirt their obligation under the contract.”
The Teamsters president said the union therefore believes it has a “credible argument” for establishing a right to strike over deadlocked grievances across every region.
“We’re gonna demand the right to strike over deadlock grievances,” O’Brien said.
“It’s gonna be up to UPS how they want these negotiations to go. If they want them to go smooth, give us everything we want — we go away.”
The objective, he said, is to give the grievance process enough leverage to force UPS to resolve disputes quickly.
“We want the right to strike over deadlocked grievances because right now there is such a backlog of grievances because UPS won’t settle anything.”
Outsourcing becomes another major fault line
Outsourcing is expected to be another central issue in 2028.
In November, the Teamsters announced a campaign to collect evidence and stop UPS from directing packages from its traditional delivery network to Roadie, the UPS subsidiary that operates a gig-economy delivery platform similar to Uber.
Roadie connects independent drivers using their own vehicles with local retailers fulfilling online orders that require same-day delivery.
The Teamsters accuse UPS of using Roadie drivers to subcontract parcel deliveries in violation of the 2023 collective bargaining agreement. The union argues that the practice allows UPS to avoid overtime costs and bypass safety requirements.
The union has also accused Happy Returns, another UPS business, of using independent contractors to process e-commerce returns that would otherwise have been handled through UPS Store locations and their employees.
Industry observers, however, largely agree with UPS that Roadie serves a different purpose.
Roadie handles same-day deliveries from stores directly to consumers that do not necessarily pass through UPS’s traditional sortation network. It also handles oversized items that cannot travel through automated parcel conveyors.
O’Brien nevertheless said the Teamsters intend to organize UPS Supply Chain Solutions, the division responsible for global logistics and freight distribution.
He also singled out MNX Global Logistics, a provider of time-critical radiopharmaceuticals and temperature-sensitive medical products acquired by UPS Healthcare in 2023.
“Supply chain is where they divert all their non-union work,” O’Brien said.
“We’re going to demand that they turn them [Supply Chain and Roadie] over through neutrality or we put them into the [national] agreement. . . . Otherwise, you’re not going to get a contract.”
A neutrality agreement would require an employer not to interfere with or campaign against a union organizing drive, allowing workers to unionize simply by signing authorization cards.
O’Brien also accused MNX of performing work inside UPS facilities while allegedly using employees in brown uniforms resembling UPS workers.
“MNX delivers the same packages that we deliver through the UPS system. MNX was caught being inside the facilities with a brown uniform masquerading as a UPS employee. We have an arbitration claim going on right now.”
UPS has previously rejected the union’s broader outsourcing allegations.
“We have several business units with different operating models to meet different customer needs,” the company said. “Our contract with the Teamsters requires that UPS drivers handle all deliveries for our small package business unit directly and we remain in compliance with the terms of our agreement. We address any disputes through our long-established grievance process.”
Automation and autonomous trucks
Technology will be another major battlefield.
O’Brien expects UPS to push for greater automation and more work to be performed with fewer employees.
“They are going to push for automation. They’re going to push for more work with less people. This is going to be probably the toughest negotiations that the Teamsters has seen,” he said.
He argued that UPS is no longer the dominant company it once was and said the union intends to negotiate from a position of strength.
“We’re gonna make demands. I know for a fact we’re gonna demand no automation.”
Artificial intelligence, automation and their impact on employment will be central to the negotiations, according to O’Brien.
“AI, automation and the creation of new jobs is going to be paramount in these next negotiations.”
Autonomous vehicles are an especially sensitive issue.
Tomé has publicly discussed the possibility of deploying autonomous feeder trucks on U.S. highways. O’Brien said the Teamsters intend to challenge that strategy through state-level legislation.
“We are gonna fight it legislatively on a state level, state by state, like we’re doing in California right now, and other states,” he said.
Healthcare and pensions remain non-negotiable
Healthcare and retirement benefits are also expected to be among the union’s most closely guarded priorities.
O’Brien described the healthcare plans covering full- and part-time UPS workers as among the strongest in the country.
“UPS members, full-time and part-time, have Cadillac health plans provided by union health and welfare funds paid for by the employer where our members pay nothing towards the cost of the premium,” he said.
“There are no hidden deductibles or anything else like that. We have the cream-of-the-crop medical.”
He said protecting those benefits would be “paramount,” while also describing UPS pensions as among the best available to workers in the United States.
The union intends to continue pursuing the highest wages in the industry while protecting and improving existing benefits.
“We need to continue to negotiate the highest paid wages in the industry; and protect, preserve and improve on any and all benefits.”
O’Brien also warned that any attempt by UPS to reduce healthcare or pension obligations would be considered a potential strike issue.
“It’s not beneath UPS to try and attack those health and welfare, and pension funds. That’s definitely a strike issue we’re going to have to protect and improve.”
Part-time workers are another priority
Approximately 51% of UPS frontline employees work part time.
O’Brien said improving their compensation was one of the major achievements of the 2023 agreement, pointing to the previous starting wages of approximately $13.50 to $14 per hour.
He described those wages as embarrassing for a Fortune 500 company whose part-time workers were receiving government assistance despite UPS reporting record profits.
The 2023 agreement raised the starting rate to $21 per hour and introduced further increases for long-term part-time employees.
“They deserve the highest wages and benefits,” O’Brien said.
“The cost of living is going up, especially in big cities. We’re going to build on [the last contract] and get the most for our part-time workers.”
The union also intends to target retirement benefits for part-time employees.
“There is no doubt that we will be making a proposal to increase part time pensions at UPS.”
2028 is already becoming a defining moment
The next UPS-Teamsters contract negotiations are still nearly two years away, but the rhetoric suggests that the confrontation has already begun.
The Teamsters intend to build on the gains achieved in 2023, while UPS faces a strategic transformation that is changing the role of traditional parcel delivery within the company.
Labor costs, automation, autonomous vehicles, outsourcing, healthcare, pensions, part-time wages and the grievance process are all likely to become major negotiating issues.
For UPS, the challenge will be balancing the cost of its unionized workforce against a broader strategy increasingly focused on higher-value logistics and specialized markets.
For the Teamsters, the objective is equally clear: preserve the gains already won, expand workers’ protections and give the union greater leverage when UPS disputes remain unresolved.
Whether the two sides can find common ground before July 31, 2028 remains uncertain.
But Sean O’Brien has already made his position unmistakable: the Teamsters are preparing for a fight, and they want UPS workers to be ready for a strike.
