A Big Win at UPS Would Help Build Union Support at Amazon

Joe Allen March 30, 2017

A fighting union is the best advertisement for organizing new, nonunion workers. A big contract win at UPS in 2018 will help draw sympathetic union supporters from Amazon to the Teamsters. (Alan Levine/ Flickr)

This arti­cle was first post­ed by Jacobin.

The mod­ern econ­o­my revolves around the sprawl­ing logis­tics indus­try. Noth­ing demon­strates this more clear­ly than the cur­rent sit­u­a­tion at Ama­zon and UPS. If Ama­zon makes good on its recent pledge, it will add anoth­er 100,000 work­ers to its U.S. work­force by 2018, mak­ing it one of the country’s largest — and one of the largest nonunion — employers.

The U.S. labor move­ment faces sev­er­al exis­ten­tial threats right now, but Amazon’s is a spe­cial kind. The company’s break­neck expan­sion has rev­o­lu­tion­ized the logis­tics indus­try. Its impact is most deeply felt at Unit­ed Par­cel Ser­vice (UPS), the country’s largest pri­vate-sec­tor, union­ized employ­er, with near­ly 250,000 of its work­ers rep­re­sent­ed by the Teamsters.

UPS already lash­es the Team­sters with the threat of Ama­zon under­cut­ting the union’s gains to jus­ti­fy the mis­er­able wages paid to part-timers, impos­si­ble pro­duc­tiv­i­ty demands, and the sub­con­tract­ing of union work to non-union con­trac­tors. It will no doubt use the com­pe­ti­tion from Ama­zon to demand fur­ther con­ces­sions from the Team­sters dur­ing the next round of con­tract negotiations.

Team­sters Unit­ed (TU), the reform chal­lengers in last year’s union elec­tion that near­ly top­pled the scan­dal-rid­den and unpop­u­lar incum­bent Team­ster Gen­er­al Pres­i­dent Team­sters James P. Hof­fa, recent­ly announced the launch of a new UPS con­tract cam­paign. Fred Zuck­er­man, TU’s can­di­date for gen­er­al pres­i­dent, told sup­port­ers, we are going to have to fight for ourselves.”

Such a cam­paign has the poten­tial to take on the pack­age giant, but it can also serve as a bea­con for future activists among Amazon’s rapid­ly expand­ing work­force. And if social­ists in the Unit­ed States can devel­op an indus­tri­al orga­niz­ing strat­e­gy, we can play an impor­tant role in help­ing to orga­nize some of the most pow­er­ful work­ers in this country.

Seat­tle origins

UPS was found­ed as a bicy­cle mes­sen­ger ser­vice in 1907 by James E. Casey. Casey, known for his tac­i­turn per­son­al­i­ty, did few inter­views dur­ing his long tenure as the com­pa­ny head.

Forbes mag­a­zine in 1970 dubbed UPS the Qui­et Giant” because of the stealthy way it snuck up on and over­whelmed its rivals. The com­pa­ny did lit­tle to no adver­tis­ing. Forbes report­ed that UPS offi­cials believed only one par­cel ship­ping com­pa­ny could exist in the Unit­ed States, and it hoped that keep­ing a low pro­file would pre­vent any­one from copy­ing its methods.”

Keep­ing that low pro­file would quick­ly prove impos­si­ble. The com­pa­ny soon became known as Big Brown” and devel­oped into a glob­al behemoth.

Today, UPS employs 440,000 peo­ple world­wide — a work­force near­ly as large as the Unit­ed States’ stand­ing army of 460,000. It has one of the largest com­mer­cial air­lines fleets in the world and deliv­ers 2.7 mil­lion pack­ages and mes­sages in the Unit­ed States and 2.8 mil­lion to 220 oth­er coun­tries dai­ly. UPS boasts, We’re a com­pa­ny that every day moves 6 per­cent of US GDP and 2 per­cent of glob­al GDP through our system.”

UPS is dense­ly union­ized, unlike its almost entire­ly nonunion twin FedEx. Both are the dar­lings of the busi­ness media. Along with 250,000 mem­bers of the Team­sters — most­ly dri­vers and hub work­ers — UPS pilots are rep­re­sent­ed the Inde­pen­dent Pilot Asso­ci­a­tion (IPA), and some of its mechan­ics are mem­bers of the Inter­na­tion­al Asso­ci­a­tion of Machin­ists (IAM).

UPS Freight, for­mer­ly Over­nite trans­porta­tion, has around about 13,000 Team­sters based in the tra­di­tion­al heavy-duty bulk freight indus­try who work under local union con­tracts. The pack­age deliv­ery wing that most peo­ple are famil­iar (with their ubiq­ui­tous brown deliv­ery trucks) has over 230,000 members.

A major­i­ty — some­where around 55 per­cent, accord­ing to orga­niz­ers’ inde­pen­dent esti­mates — of these UPS Team­sters are part-timers whose start pay is an abysmal­ly low $10 to $11 per hour. For three decades, start­ing pay for part-timers was a mis­er­able $8 to $8.50 per hour. Part-timer pover­ty, along with bru­tal­ly high pro­duc­tiv­i­ty, sub­si­dized UPS’s mas­sive expan­sion in the 1980s and 1990s.

Yet, despite all the logis­tic ser­vices that UPS offers — and the dec­la­ra­tion of Jack Levis, UPS’s senior direc­tor of process man­age­ment, that, We’ve real­ly turned from a truck­ing com­pa­ny with tech­nol­o­gy to a tech­nol­o­gy com­pa­ny with trucks” — it is still pri­mar­i­ly a pack­age deliv­ery com­pa­ny. UPS doesn’t man­u­fac­ture any goods nor it is a retailer.

Amazon’s inspi­ra­tion lies elsewhere.

Sam Walton’s heir

Unlike UPS’s ear­ly attempts at fly­ing under the radar, Amazon’s rise has been any­thing but qui­et. Found­ed in Seat­tle in 1994, it has become one of the most vis­i­ble brands in the world and an inti­mate part of their dai­ly lives of tens of mil­lions of people.

Ama­zon founder Jeff Bezos is the fifth-rich­est per­son in the world, worth near­ly $72 bil­lion and treat­ed by some with a sim­i­lar cult-like rev­er­ence to the late Apple founder Steve Jobs.

Unlike the tac­i­turn Casey, who lived and died in a clois­tered world of UPS, Bezos is a high­ly vis­i­ble pub­lic fig­ure. He recent­ly pur­chased one of the most impor­tant news­pa­pers in the coun­try, the Wash­ing­ton Post. Bill­board actu­al­ly asked him if he had any plans to run for pres­i­dent. (He said no.) He even made a cameo appear­ance in Star Trek Beyond.

His flair for pub­lic rela­tions is well known. Amazon’s pro­mo­tion of drone deliv­er­ies has cap­tured the atten­tion of the gen­er­al pub­lic. The com­pa­ny also was grant­ed a patent Jules Verne-like float­ing warehouses.

Much of Bezos’s busi­ness mod­el has been influ­enced by Sam Walton’s Wal­mart. In the last chap­ter of Walton’s auto­bi­og­ra­phy Made in Amer­i­ca, pub­lished around the time of his death in 1992, he mused on whether anoth­er com­pa­ny could match or sur­pass Walmart’s success:

My answer is of course it could hap­pen again. It’s all a mat­ter of atti­tude and the capac­i­ty to con­stant­ly study and ques­tion the man­age­ment of business.

He added:

If I were a young man or woman start­ing out today with the same tal­ents and ener­gies and aspi­ra­tions that I had fifty years ago, what would I do? … Prob­a­bly some of kind of spe­cial­ty retail, some­thing to do with com­put­ers, maybe.

Walton’s mus­ings strong­ly hint at the pos­si­bil­i­ty of an Ama­zon-like com­pa­ny as his suc­ces­sor. But what did Bezos learn from Walmart?

Bezos had imbibed Walton’s book thor­ough­ly and wove the Wal­mart founder’s cre­do about fru­gal­i­ty and a bias for action’ into the cul­tur­al fab­ric of Ama­zon,” accord­ing to busi­ness reporter Brad Stone in his book The Every­thing Store. Bezos was espe­cial­ly tak­en by Walton’s will­ing­ness to use the best ideas of his competitors.”

Bezos was so enam­ored by Wal­mart that he poached a large num­ber of its exec­u­tives in the late 1990s. Wal­mart sued in response, argu­ing that Ama­zon was steal­ing its trade secrets”; Wal­mart ulti­mate­ly lost the suit.

One of the ideas Bezos bor­rowed from Wal­ton was work­ing his employ­ees past the point of exhaus­tion. An ear­ly Ama­zon exec­u­tive, for exam­ple, sug­gest­ed to Bezos that because park­ing was so expen­sive near Amazon’s first head­quar­ters and ware­house in Seat­tle, the com­pa­ny should sub­si­dize bus pass­es for its work­ers. Bezos appar­ent­ly scoffed” at the suggestion.

He didn’t want employ­ees to leave and catch the bus,” the exec­u­tive said. He want­ed them to have their cars there so there was nev­er any pres­sure to go home.”

Amazon’s work­ing con­di­tions wors­ened through the two decades of the twen­ty-first cen­tu­ry as it rapid­ly expand­ed its ware­hous­es or dis­tri­b­u­tion cen­ters (“ful­fill­ment cen­ters” in Ama­zonese) across the country.

The Allen­town Morn­ing Call con­duct­ed an inves­ti­ga­tion into Amazon’s work­ing con­di­tions in its Breinigsville, Penn­syl­va­nia, ware­hous­es. After inter­view­ing twen­ty cur­rent employ­ees in 2011, the Morn­ing Call reported:

Work­ers said they were forced to endure bru­tal heat inside the sprawl­ing ware­house and were pushed to work at a pace many could not sus­tain. Employ­ees were fre­quent­ly rep­ri­mand­ed regard­ing their pro­duc­tiv­i­ty and threat­ened with ter­mi­na­tion, work­ers said. The con­se­quences of not meet­ing work expec­ta­tions were reg­u­lar­ly on dis­play, as employ­ees lost their jobs and got escort­ed out of the ware­house. Such sights encour­aged some work­ers to con­ceal pain and push through injury lest they get fired as well, work­ers said.

In 2015, work­ing con­di­tions for Amazon’s staff at its Seat­tle cam­pus were exposed by the New York Times to be just as horrendous:

Work­ers are encour­aged to tear apart one another’s ideas in meet­ings, toil long and late (emails arrive past mid­night, fol­lowed by text mes­sages ask­ing why they were not answered), and held to stan­dards that the com­pa­ny boasts are unrea­son­ably high.” The inter­nal phone direc­to­ry instructs col­leagues on how to send secret feed­back to one another’s boss­es. Employ­ees say it is fre­quent­ly used to sab­o­tage oth­ers. (The tool offers sam­ple texts, includ­ing this: I felt con­cerned about his inflex­i­bil­i­ty and open­ly com­plain­ing about minor tasks.”)

The white-col­lar staff are told to be guid­ed by the company’s lead­er­ship prin­ci­ples, 14 rules inscribed on handy lam­i­nat­ed cards.” One of those rules: Lead­ers are right a lot. They have strong judg­ment and good instincts.”

Amazon’s suc­cess is due to its mas­sive online retail oper­a­tion, honed to cus­tomer sat­is­fac­tion on a mind-bog­gling array of prod­ucts that few oth­er tra­di­tion­al brick-and-mor­tar retail­ers — notably the ven­er­a­ble and declin­ing Sears, which Wal­mart sur­passed in sales in 1989 — or oth­er online retail­ers have been able to com­pete with.

So the announce­ment in July 2015 that Ama­zon was val­ued more than Wal­mart shouldn’t have come as a total surprise.

While Wal­mart is still the world’s biggest retail­er in terms of rev­enue, Amazon’s evo­lu­tion from a start-up in a mod­est office build­ing to a retail jug­ger­naut employ­ing more than 97,000 employ­ees [in 2015] has changed the shape of the retail industry.

Wal­mart pio­neered the cre­ation of the mod­ern logis­tics cor­po­ra­tion with the man­age­ment of entire sup­ply chains, from the man­u­fac­tur­er of con­sumer goods to their plac­ing on the store’s shelves. Ama­zon is attempt­ing to do the same thing — with­out, until recent­ly, the con­struc­tion of retail stores — with one addi­tion: con­trol­ling cus­tomer deliv­ery through its own fleet of drivers.

Oper­a­tion Drag­on Boat

If Ama­zon is able to build its own deliv­ery fleet, its impact on the logis­tics indus­try could have the great­est impact on the ware­hous­ing and deliv­ery busi­ness since the dereg­u­la­tion of the U.S. freight and avi­a­tion indus­tries in the late 1970s and ear­ly 1980s.

Ama­zon has launched its own air trans­port net­work, an ocean freight for­ward­ing com­pa­ny, direct deliv­ery oper­a­tions, and the myr­i­ad of small, bare­ly inde­pen­dent” sub­con­trac­tors ser­vic­ing the final cus­tomer deliv­ery of pack­ages. Not since UPS’s fran­tic efforts to build an air deliv­ery oper­a­tion to catch up with overnight pio­neer FedEx or FedEx’s con­struc­tion of a freight oper­a­tion to match its Big Brown rival has a logis­tics com­pa­ny in so short a time built such a for­mi­da­ble operation.

Accord­ing to doc­u­ments obtained by Bloomberg, Ama­zon intend[ed] to cre­ate a rev­o­lu­tion­ary sys­tem that will auto­mate the entire inter­na­tion­al sup­ply chain.” Furthermore,

A 2013 report to Amazon’s senior man­age­ment team pro­posed an aggres­sive glob­al expan­sion of the company’s Ful­fill­ment By Ama­zon ser­vice, which pro­vides stor­age, pack­ing, and ship­ping for inde­pen­dent mer­chants sell­ing prod­ucts on the company’s web­site. The report envi­sioned a glob­al deliv­ery net­work that con­trols the flow of goods from fac­to­ries in Chi­na and India to cus­tomer doorsteps in Atlanta, New York, and Lon­don. The project, called Drag­on Boat, is pro­ceed­ing, accord­ing to a per­son famil­iar with the ini­tia­tive, who asked not to be iden­ti­fied because the infor­ma­tion isn’t public.

Four years lat­er, accord­ing to Busi­ness Insid­er, Ama­zon has 214 logis­tics facil­i­ties across the Unit­ed States, includ­ing ful­fill­ment-cen­ter ware­hous­es; sor­ta­tion cen­ters, where pack­ages get pre­sort­ed for ship­ping; Ama­zon Pantry and Ama­zon Fresh, which deliv­er gro­ceries; and Ama­zon Prime Now hub, a sep­a­rate build­ing to store one-hour deliv­ery items. Twen­ty-eight more dis­tri­b­u­tion cen­ters are expect­ed to be built this year.

Ama­zon recent­ly announced that it will invest $1.5 bil­lion to build a mas­sive air hub based in the Cincinnati/​North Ken­tucky (CVG) Inter­na­tion­al air­port. The project will bring up to 2,700 jobs and forty Boe­ing 767s to CVG, accord­ing to offi­cials, with six hun­dred full-time jobs com­ing ini­tial­ly,” accord­ing to the Cincin­nati Busi­ness Couri­er. The air hub is square­ly with­in the region known as Car­go Alley,” where planes can reach near­ly 80 per­cent of the con­ti­nen­tal Unit­ed States with­in two hours.

We believe Ama­zon may be the only com­pa­ny with the fulfillment/​distribution den­si­ty and scale to com­pete effec­tive­ly with glob­al UPS/​FedEx/​DHL,” declared a report by Baird Equi­ty Research, a lead­ing finan­cial con­sult­ing firm.

Wal­mart con­scious­ly built its dis­tri­b­u­tion cen­ters in remote, con­ser­v­a­tive regions of the coun­try to avoid the threat of union­iza­tion. Ama­zon, on the oth­er hand,” Mark Mein­ster, the direc­tor of Ware­house Work­ers for Jus­tice, told me,

builds in or close to major cities. Their Kenosha facil­i­ty (and nobody had built ware­hous­es in Kenosha before Ama­zon) the work­force is more diverse. Ama­zon builds in big­ger labor mar­kets [like] Chica­go, [where] they have ful­fill­ment cen­ters on Goose Island, 28th and West­ern, Lisle, Joli­et, and Mor­ton Grove [both inside the city and in sev­er­al sur­round­ing sub­urbs]. Ama­zon has reversed the mod­el of ware­hous­ing pio­neered by Walmart.

This offers an oppor­tu­ni­ty to orga­nize Ama­zon work­ers, since its dri­vers inter­act often with Team­sters drivers.

Social­ists and the work­place strug­gles ahead

Ken Paff, nation­al orga­niz­er of the Team­sters for a Demo­c­ra­t­ic Union, says the lessons of past con­tract bat­tles at UPS will be impor­tant for future orga­niz­ing dur­ing the upcom­ing con­tract bat­tle at UPS and for future orga­niz­ing at Amazon.

When the Team­sters deci­sive­ly defeat­ed UPS dur­ing the 1997 strike, under the ban­ner of Part-Time Amer­i­ca Won’t Work,” John Sweeney, the then-head of the AFL-CIO, said that the suc­cess­ful 1997 UPS strike was worth a mil­lion house calls,’ ” Paff said, refer­ring to the orga­niz­ing tac­tic of vis­it­ing work­ers at home that is cen­tral to any orga­niz­ing cam­paign. He was right. Ama­zon work­ers — just like all work­ers — will want to join a union that knows how to win.”

When the Team­sters won their bat­tle against UPS in 1997, expec­ta­tions were raised through­out the entire labor move­ment. Imme­di­ate­ly fol­low­ing the strike, activists began talk­ing about orga­niz­ing FedEx (a cam­paign that has yet to be successful).

A fight­ing union is the best adver­tise­ment for orga­niz­ing new, nonunion work­ers. A big con­tract win at UPS in 2018 will help draw sym­pa­thet­ic union sup­port­ers from Ama­zon to the Teamsters.

Kim Moody, one of the founders of Labor Notes, wrote last year:

Eighty-five per­cent of the near­ly three-and-a-half mil­lion work­ers employed in logis­tics in the Unit­ed States are locat­ed in large met­ro­pol­i­tan areas — inad­ver­tent­ly recre­at­ing huge con­cen­tra­tions of work­ers in many of those areas that were sup­posed to be emp­tied” of indus­tri­al work­ers. There are about six­ty such clus­ters” in the Unit­ed States, but it is the major sites in Los Ange­les, Chica­go, and New York-New Jer­sey, each of which employs at least 100,000 work­ers, and oth­ers such as UPS’s Louisville World­port” and FedEx’s Mem­phis clus­ter, that exem­pli­fy the trend.

The orga­niz­ing oppor­tu­ni­ties this presents — at both com­pa­nies — should be clear to the Left.

When I spoke to Mark Mein­ster last year about the many chal­lenges fac­ing orga­niz­ers in the non-union logis­tics indus­try, he thought we need­ed a spark to ignite orga­niz­ing efforts. We need some­thing big like the 1997 UPS strike or the 2006 immigrant’s rights march­es.” Do we have that now with mil­lions march­ing against Trump?

The wide­spread inter­est in social­ist ideas and the explo­sive growth of the Demo­c­ra­t­ic Social­ists of Amer­i­ca (DSA) shows that there is a gen­er­a­tion will­ing to fight for greater polit­i­cal change. If social­ists are able to chan­nel that will­ing­ness into an indus­tri­al strat­e­gy, a plan to head to the shop floor and orga­nize one’s cowork­ers, we could shake the foun­da­tions of the twen­ty-first cen­tu­ry Amer­i­can economy.

This August is the twen­ti­eth anniver­sary of the 1997 UPS strike; a strike that defeat­ed one of the most pow­er­ful cor­po­ra­tions in the world. Now that much more of the U.S. econ­o­my revolves around the logis­tics indus­try, the 1997 con­tract cam­paign and strike looked like the strike of the future. Let’s seize the opportunity.

In These Times is proud to fea­ture con­tent from Jacobin, a print quar­ter­ly that offers social­ist per­spec­tives on pol­i­tics and eco­nom­ics. Sup­port Jacobin and buy a four-issue sub­scrip­tion for just $19.95.

Joe Allen is the author of The Pack­age King: A Rank and File His­to­ry of Unit­ed Par­cel Ser­vice, Viet­nam: The Last War the U.S. Lost and Peo­ple Was­n’t Made to Burn: A True Sto­ry of Race, Mur­der, and Jus­tice in Chica­go (Hay­mar­ket, 2011). He has writ­ten for Jacobin, Social­ist Work­er and elsewhere.
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