Effective November 12, more than 12,000 members of the International Brotherhood of Teamsters employed by UPS Freight—the nation’s 5th largest less-than-truckload (LTL) carrier—may be on strike. This strike will not affect UPS Parcel Service, but it will have a significant impact on customers of UPS Freight, the company’s LTL carrier. This would be the first UPS strike since 1997.
|What is LTL Freight? Cargo shipped using less-than-truckload carriers shares space on the truck with cargo from multiple shippers. It is commonly used to transport bulk shipments on pallets from shippers to stores and other businesses.|
Who will be affected?
In preparation for the potential strike, UPS Freight cleared all shipments received during the week of November 5-9 in order to ensure that its network is completely empty before November 12.
All customers of UPS Freight will be affected, and UPS Freight service will be suspended until an agreement is reached. Customers of UPS Parcel Service, including small package deliveries to individuals, will not be affected by the strike.
What what will happen because of the strike?
The strike will likely pose serious problems for retailers as they gear up for peak holiday retail season, potentially leading to greater scarcity of goods if suppliers are unable to arrange for alternative freight transport.
In addition, the strike may exacerbate the increase in transportation costs already seen in 2018, which has resulted in delayed shipments and an increase in the final cost of goods. Some of these increased costs have been passed on to consumers. FreightWaves, a leading industry publication, estimates that a UPS Freight strike will lead to:
- A 5-10% decline in on-time performance by shippers
- A 10-20% price increase for small- and medium-sized businesses, lasting at least until the first quarter
The disruption will also increase the risk of damaged freight as other carriers take on additional shipments during the busiest shipping months of the year.
To reduce the likelihood of damage and shipping delays caused by increased volume, it’s important to reschedule your regular shipments using another carrier as soon as possible in the event of a strike, especially if they are time-sensitive. Some companies, including TSI, work with a number of carriers and can often provide expedited pickup.
What to do if you are impacted by the UPS Freight strike
UPS Freight reached out to customers over the past week to inform them of potential service disruptions and the need to arrange for alternative carriers, such as 3PL solutions, freight brokers, or contacting carriers directly.
3PL (3rd Party Logistics)
3PL involves using a third-party business to outsource elements of your distribution and fulfilment services. 3PLs are asset-based, meaning that they own their own trucks, and possibly a brick and mortar storefront, warehouses, and other aspects of the supply chain. Setting up 3PL services often carries higher upfront costs and a greater investment of time and money than other alternatives, which makes it a viable long-term replacement to UPS Freight.
3PL may be best for:
- SMEs who fulfill more than 10-20 orders per day
- Businesses seeking value-added services. 3PLs are often all-in-one providers who offer a wider array of supply chain services, such as warehousing or storing and processing inventory.
Freight brokers assist shippers with ready-to-haul freight by finding carriers who are qualified to carry the load. The broker acts as a liaison between the shipper and the carrier by facilitating the movement of freight and by keeping a line of communication open between the shipper and the carrier. Unlike 3PLs, freight brokers are not asset-based.
Freight brokers may be ideal for:
- Pallet shipments and other ready-to-haul cargo
- Individual shipments, though the best freight brokers are also capable of organizing recurring shipments
- Businesses who only require transportation, and no other value-added services
With UPS Freight potentially on strike as of November 12, 2018, you might wondering how to transport your goods to their final destination. 3PL providers and freight brokers like TSI are your best options.
- 3PL may be ideal for businesses that require value-added services, such as warehousing.
- Freight brokers are ideal for ready-to-haul shipments, and businesses that don’t require value-added services.
Call us at 877-677-1571 to find out how we can help you during the UPS Freight strike or request a quote online. TSI can provide expedited pickup options and a variety of specialty shipping services in addition to LTL freight.