Thelife- Talks between UPS and the Teamsters are stalled less than three weeks from the July 31 deadline.
- FedEx sent a memo to its delivery force encouraging security awareness in the event of a strike.
If UPS and the International Brotherhood of Teamsters don't agree on a new contract by July 31, the union covering roughly 340,000 workers has pledged to strike. Negotiations have been at a standstill since last week, with the issue of part-time pay at the center of the disagreement.
The possible work stoppage, which is still far from certain, would present a significant disruption to some US supply chains and the economy at large.
FedEx, which potentially stands to benefit from a strike at its largest competitor, is concerned that picketing Teamsters could disrupt its operations, according to a memo sent to FedEx Delivery contractors Tuesday and seen by Insider.
"These activities could interfere with your business' ability to safely access customer locations or subject drivers to pressure not to provide service to customers," the memo reads.
Unlike unionized UPS, FedEx uses a network of small businesses that contract out its delivery routes and make package deliveries.
FedEx's memo to these contractors said they should have "heightened security awareness" and "avoid confrontations with upset customers or third parties" in the event of a strike.
"Have an action plan. Know the building exits, stay away from glass doors and windows, and remain calm if caught in a crowd," the memo said. It also said drivers should be familiar with how to report a burglarized or stolen package delivery vehicle.
A FedEx spokesperson told Insider that alerting delivery contractors of potential disruptions is normal practice.
Glenn Gooding, a former UPS manager during the last strike in 1997 who's now President of iDrive Logistics, said the content of FedEx's memo was "all in the realm of possibilities," based on his experience.
A Teamsters spokesperson dismissed FedEx's memo as "scare tactics to capitalize on a possible work stoppage at UPS."
A UPS spokesperson said the company doesn't comment on other players and that there are still two and a half weeks left to negotiate with 95% of the contract agreed upon by both sides.
Who gains from a UPS strike?
FedEx is perhaps the most obvious potential beneficiary from a UPS strike at its main competitor — executives have for months been encouraging shippers to begin talks earlier than later if they'll need alternatives.
Tuesday's memo said FedEx will prioritize existing customers in order to "manage capacity and protect service levels."
The United States Postal Service has also expressed readiness to take on more packages in the event of a UPS strike and a slew of new players in parcel delivery have emerged in recent years that could also take on some UPS volume. However, though diversification beyond the two biggest players is more common today than in 1997, parcel experts emphasize there is not enough excess market capacity to cover all UPS packages