Looming UPS Strike Spurs Some Companies to Rethink Supply Chains

on Jul8
by | Comments Off on Looming UPS Strike Spurs Some Companies to Rethink Supply Chains |

Kathryn Keeler and her husband, Stuart de Haaff, own an olive oil company in the hills of central California. The couple spend their days harvesting olives, bottling the oil, labeling the glass bottles and shipping them out, relying primarily on UPS to get their product to kitchens throughout the United States.

They are far from alone. UPS handles about a fourth of packages shipped each day in the United States, according to the 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 325,000 of its workers expiring at the end of the month and a potential strike looming, business owners around the country are facing what could be the latest in a series of supply chain disruptions they have confronted since the start of the pandemic.

Some are pre-emptively turning to FedEx, the next largest private carrier in the United States, or the Postal Service. Others are calling their third-party shippers — firms that work with the likes of UPS, FedEx and DHL to handle their clients’ shipping needs — to ensure that their packages can still get to their final destinations even if there is a strike.

The logistical challenge is just one more burden on businesses that have been stretched thin over the past few years.

“Maybe a larger business can withstand those types of situations,” Ms. Keeler said. But as small-business owners, she and her husband “don’t have a lot of extra time in our day to be on the phone with the post office or FedEx.”

Since 2020, the pandemic has strained the global supply chain in a number of ways. E-commerce reached record levels as stuck-at-home Americans bought clothes, furniture, workout equipment and groceries online. Companies had to navigate Covid-related shutdowns at factories in China and Vietnam. There were worldwide delays when a large container ship got stuck in the Suez Canal, leading to containers piling up at the Port of Los Angeles. Those situations affected the way goods came into the United States.

A UPS strike could hobble the way brands move their wares domestically.

“This is something that affects us on our home turf, and how do we solve for that?” said Ron Robinson, the chief executive of BeautyStat Cosmetics, which uses UPS to ship its skin care products to retailers like Ulta and Macy’s.

One strategy that his team will lean on is trying to bundle packages, sending as many as it can out at once, he said.

Switching to another carrier is going to cost some companies.

Ryan Culver, the chief executive of Platterful, a monthly charcuterie board subscription service, also uses UPS. Switching over to FedEx Express — necessary to ensure that the meats in his packages reach consumers in time — would cost about $5 to $10 more per delivery.

Teri Johnson, the founder of Harlem Candle Company, received an email on June 26 from her third-party shipper about a potential UPS strike. It suggested she switch to FedEx. That will cost her about $2 extra for each candle shipped in the greater New York area. Sending her candles to California will cost even more.

“We don’t really have a choice right now,” Ms. Johnson said.

FedEx said it was accepting additional volume for a limited time and would assess how much capacity its network could accommodate. “Shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now,” the company said in a post on its website on Thursday.

The Postal Service said in an emailed statement that it “has a strong network, and we have the capacity to deliver what is tendered to us.”

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