United Parcel Service (NYSE:UPS) launched a presentation on Tuesday aimed toward highlighting particulars on the brand new labor contract that has been a priority to traders.
United Parcel Service CEO Carol Tome mentioned the prices incurred by the transport big for the brand new Teamsters contract masking about 340K staff are lower than the $30B in new cash. The deal will improve wage and profit prices at a 3.3% compound annual progress charge over the lifetime of the settlement, which runs till July 31, 2028. 46% of wage and profit prices from the settlement will probably be booked this yr.
“It’s a barbell construction the place it’s heavier to start with of the contract,” famous Tome in an interview with CNBC. “We’ll go in the midst of the contract and it steps again down. This 46% of the associated fee improve occurs within the first yr, so think about what the final 4 years of the contract are!,” she famous. Crucially, UPS (UPS) retained the flexibility to make deliveries on weekends, added Tome. That make the brand new contract a win-win-win for the union, firm, and clients, per UPS.
The brand new contract with the Teamsters included pay raises for each part-time and full-time staff. Full-time staff will common $49 an hour. Present staff will get $2.75 extra an hour this yr and $7.50 an hour extra over the five-year contract. Half-time staff will make at least $21 an hour, up from a minimal of $15.50 presently.
Shares of UPS (UPS) fell sharply after the corporate minimize steering in early August. The inventory closed on Monday at its 2023 low.