UPS is currently in labor discussions over a new contract with its 1,200 mechanics who work on UPS’s fleet of aircrafts. Although the workers represented by the Teamsters have overwhelmingly voted to approve a strike, UPS has stated that their vote is a typical negotiation strategy and that the company is not alarmed. The two sides have been in talks for almost three years and several rounds of negotiations have taken place between the two sides and even more negotiations are scheduled to settle outstanding issues. While a strike would be difficult to actually start due to the legal classification of the negotiations covered by the Railway Labor Act (RLA) and the National Mediation Board (NMB), if a strike would take place it would affect approximately 16% of UPS’s 15.5 million daily deliveries that are made by air.

It is surprising that UPS has allowed these negotiations to continue into the peak 4th quarter shipping season. While a strike would be difficult to start it is not impossible. When the freight industry is clearly a shipper’s market, some shippers are alarmed at any risk that may cause a disruption to service and are quick to put a contingency plan in place that moves freight to the competition. In an industry that tends to say that FedEx’s core competency is their airfreight movements, it is even more surprising that UPS has let this situation linger.

This labor negotiation brings back up the labor battle between UPS and FedEx. In last quarter’s Supply Watch the battle between FedEx and UPS were detailed out and many were anxious to see if the Senate would back the House of Representatives and pass FAA Reauthorization Act permanently affecting the labor landscape of the industry. The Senate announced mid September it would not pass the bill by the time the current bill expired at the end of September but intends to vote on the bill by the end of this calendar year.

Rachel Rutkoski is a Senior Indirect Services Category Manager for North America in Ariba’s Global Services Organization. Rachel is recognized by the Institute for Supply Management as a Certified Professional in Supply Management (C.P.S.M.) and has several years experience as a supply chain and transportation analyst in Fortune 500 companies.