Catherine Keeler and her husband, Stuart de Hough, own an olive oil company in the hills of central California. The couple spends their days harvesting olives, bottling the oil, labeling glass bottles and shipping them out, relying primarily on UPS to get their product to kitchens across the United States.
They are far from alone. UPS handles a quarter of the packages shipped in the U.S. each day, according to Pitney Bowes Parcel Shipping Index, many of them for small businesses like Ms. Keeler’s company. Rancho Azul y Oro.
But with the labor contract between UPS and its 325,000 workers expiring at the end of the month and a potential strike looming, business owners across the country are facing what could be the latest in supply chain disruptions they’ve faced since the start of the pandemic.
Some are already turning to FedEx, the next largest private carrier in the United States, or the U.S. Postal Service, which typically handles lighter packages. Others are calling on their third-party shippers — companies that work to manage their clients’ shipping needs like UPS, FedEx and DHL — to make sure their packages make it to their final destinations despite the strike.
Logistics challenges are another burden on businesses that have been stretched thin over the past few years.
“Possibly a big business can afford this kind of situation,” Ms. Keeler said. But as small-business owners, she and her husband “don’t have extra time in our day to be on the phone with the post office or FedEx.”
Since 2020, the pandemic has put pressure on global supply chains in several ways. E-commerce has reached record levels as stuck-at-home Americans buy clothes, furniture, workout equipment and groceries online. Companies had to navigate Covid-related shutdowns at factories in China and Vietnam. Worldwide delays occurred when a large container ship got stuck in the Suez Canal, causing the containers to back up at the Port of Los Angeles. These conditions affected the way goods arrived in the United States.
A UPS strike could disrupt the way brands move their goods domestically
“This is something that affects us on our home turf and how do we address that?” said Ron Robinson, chief executive of BeautiStat, which uses UPS to ship its skin care products to retailers such as Ulta and Macy’s.
One strategy his team will turn to is to try to bundle packages, as many as they can send out at once, he said.
Switching to another carrier is going to cost some companies.
Ryan Culver, CEO of Platterfull, a monthly charcuterie board subscription service, also uses UPS. Switching over to FedEx Express — necessary to ensure its packages of meat reach consumers on time — will cost about $5 to $10 more per delivery.
Harlem Candle Company founder Terry Johnson received an email from his third-party shipper on June 26 about a possible UPS strike. It advised him to switch to FedEx. It will cost her about $2 extra for each candle shipped to the greater New York area. It would cost more to ship his candles to California.
“We don’t really have a choice at the moment,” Ms Johnson said.
FedEx said it is accepting additional volume for a limited time and will assess how much capacity its network can accommodate. “Those considering moving shipping volume to FedEx, or currently negotiating with the company to open a new account, are encouraged to start shipping with FedEx now,” the company said in a post on its website Thursday.
USPS did not immediately respond to a request for comment on how it is planning for a possible UPS strike.
Large companies are relying on sophisticated backup plans that have been tested over the years. Pandemic and earlier Tariffs trade war Many large retailers with extensive global supply chains have pushed to diversify their vendors and the parcel carriers they use.
“We’re focused on investing in multiple transportation solutions that allow us to move freight between carriers more agilely,” said Alexis DePree, Nordstrom’s chief supply chain officer. “We can do this with much more flexibility and speed than in the past.”
Some third-party carriers are increasing their business because of the prospect of a UPS strike for their clients. Stord, an Atlanta-based third-party carrier whose clients include apparel manufacturers and consumer-package companies, is sending out emails to its clients not to worry. Stored uses a cloud-based platform to offer services such as warehousing and fulfillment and handles thousands of their packages daily.
By aggregating the volume of a broad portfolio of client brands and using software to make decisions, Stord has the advantage to better negotiate prices with the big parcel carriers, said Sean Henry, the company’s chief executive.
“We’re negotiating with FedEx and USPS about rates around UPS so our customers don’t have to do that,” he said.
Stord says more and more of his clients ask it to negotiate with carriers on their behalf. He said that equates to “tens of millions of dollars in annual revenue” for his business.
Still, some business owners aren’t letting the prospect of a UPS strike weigh them down just yet.
Bill McHenry, president of Widgetier, which sells cookware to major retailers, said he felt “kind of numb” after navigating pandemic-related challenges. “I’ve seen a lot and the stories I’ve heard and what we’ve had to overcome and survive — not just the price, but the rise of thinking you have a container but don’t,” he said.
He said Possible rail strike December was a big concern for him.
Meanwhile, an agreement between UPS and the union representing its workers, the International Brotherhood of Teamsters, remains a possibility. The union announced Wednesday that talks had broken off, after earlier saying the sides had reached a tentative agreement. If an agreement is not reached, a strike could take place before August 1
If that happens, “we will have collateral damage,” Ms. Keeler said.
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