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King Of The Hill: An Elite Group Of UPS Drivers Would Get As Much As $0.96 Per Mile In A Few Years

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King Of The Hill: An Elite Group Of UPS Drivers Would Get As Much As $0.96 Per Mile In A Few Years

The sleeper drivers for United Parcel Service, Inc. (NYSE: UPS) can look forward at the start of August 2022 to make as much as 96 cts per mile.

That was one of the details revealed Monday in a conference call by the Teamsters union, discussing the preliminary five-year contract the company and the union reached last month to replace the contract that expires at the end of July.

Denis Taylor, the director of the Teamsters Package division and co-chairman of the Teamsters Negotiating Committee, conducted the call in cooperation with the union's communications division. While the call was held Monday, its details were embargoed until Tuesday at 10:45 a.m. Eastern time.

While the number of sleeper drivers is minuscule compared to the rest of the size of the UPS driver team—UPS Freight lists assets of more than 5,9800 vehicles and 21,000 trailers--the size of the driver compensation is notable. The numbers compared to a Department of Labor estimate that in 2016, there were approximately 1.87 million heavy duty truck drivers in the U.S. Still, it marks the UPS over-the-road drivers as a sort of truck driver royalty.

As had been earlier disclosed when the preliminary contract was first announced, UPS has committed to adding 2,000 new sleeper team positions by switching some freight movement from rail. Taylor said the current number of sleeper drivers is between 1,800 to 2,000, but he did not have the precise number. However, the size of that fleet is about to double.

On August 1, if the contract is ratified, a sleeper team job with the single classification—pulling one trailer--will be paid 84.42 cts per mile. A double trailer gets 86.26 cts per mile, and a triple gets 88.1 cts. On August 1, 2022, those rates, after annual progressions, would be 92.29/94.29/96.31 cts per mile, respectively.

By contrast, in a recent increase in driver pay, Heartland Express, Inc. (NASDAQ: HTLD) crowed about an all-in rate of 67.5 cts/mile, while in this story from last month, Schneider was boasting of its rates of around 55 cts per mile.

Those high rates will not just be for UPS sleeper drivers. All drivers at UPS who are classified as mileage drivers will receive that rate. Taylor could not give an estimate on the number of mileage drivers at UPS. As he noted, all sleeper drivers are mileage drivers, but not all mileage drivers at UPS are sleeper drivers.

On another issue, while the contract provides for a new type of driver that will be able to work both Saturday and Sundays, Taylor said UPS indicated in its negotiations that it has no immediate plans to add that Sunday service, though competitors such as FedEx Corporation (NYSE: FDX) and internal Amazon.com, Inc. (NASDAQ: AMZN) delivery services now work the whole week.

"The company has no plans as we speak, and has as much said that across the table to us that they have no plans to do Sunday delivery," Taylor said. "But given the circumstances in the delivery situation, obviously the competition is delivering on Sunday, we firmly believe that at some point during the term of this agreement that Sunday delivery would be a distinct possibility for our members."

Taylor said the contract contains the structure that would allow Sunday delivery. If UPS decided to proceed with it, Taylor said no further changes would be necessary.

Sunday delivery would be accomplished mostly by a new category of driver called Combination Drivers. These would be full-time slots with a work schedule that would include the weekend. That also includes Saturdays, where service now is handled by drivers who work a Tuesday-Saturday shift. Those Tuesday-Saturday drivers would be transitioned to a Monday-Friday shift. They would start at $20.50 per hour and go to a top rate of $34.79 per hour on August 1, 2022.

The combination drivers and the additional sleeper drivers are part of a UPS commitment in the contract to hire 5,000 new full-time workers over the life of the pact.

Although the contract expires at the end of July, Taylor said it was unlikely to go into effect on that day. There are regional issues that are under discussion, and a 60-day extension of the existing agreement past August 1 has been agreed to between the union and the company while those local issues are being settled.

Taylor said the contract requires UPS to consult six months in advance about any proposed technological changes. A document distributed in conjunction with the conference call held with reporters gave examples of the type of technological change that might need consultation: drones, driverless vehicles and platooning of tractor-trailers.

"I'm not concerned that during term of contract that we're going to have drones flying on the back of package cars as much as some other things that could be implemented more reasonably, like platooning," Taylor said.  "It allows us a mechanism to go through grievance process in case the company tries to quickly implement unilateral changes."

Taylor was asked about concessions the union made in the negotiations and he cited two minor shifts, regarding payroll and employee progression. But if the framework ultimately sets the platform for Sunday delivery, that would turn out to be the biggest concession of all.

Posted-In: FreightwavesNews General Best of Benzinga

 

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