Kathryn Keeler and her husband, Stuart de Haaff, own an olive oil company in the hills of central California. The couple spends their days harvesting olives, bottling the oil, labeling the glass bottles and shipping them, relying primarily on UPS to get their product to kitchens all over the United States.
They are far from alone. UPS handles about a quarter of the 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 possible strike looming, business owners around the country are facing what could be the latest in a series of supply chain disruptions they’ve faced since the beginning. of the pandemic.
Some preemptively turn to FedEx, the next largest private carrier in the United States, or the U.S. Postal Service, which generally handles lighter packages. Others are calling their third-party shippers — companies that work with the likes of UPS, FedEx and DHL to handle their customers’ shipping needs — to make sure their packages can still reach their final destinations even if there is a strike.
The logistical challenge is just one more burden for businesses that have been stretched thin in recent years.
“Maybe a bigger business can handle 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 call 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 stay-at-home Americans bought clothes, furniture, exercise equipment and groceries online. Companies have had to navigate Covid-related shutdowns at factories in China and Vietnam. There were global delays as a large container ship became stuck in the Suez Canal, leading to containers piling up at the Port of Los Angeles. These situations affected the way in which goods came into the United States.
A UPS strike could disrupt the way brands move their goods 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, which uses UPS to ship its skin care products to retailers like Ulta and Macy’s.
One strategy his team will rely on is to try to bundle packages, sending as many as they can at once, he said.
Switching to another carrier will cost some companies.
Ryan Culver, the chief executive of Platterful, a monthly charcuterie board subscription service, also uses UPS. Switching to FedEx Express — necessary to ensure the meats in his packages reach consumers on time — would cost about $5 to $10 more for delivery.
Teri Johnson, the founder of Harlem Candle Company, received an email on June 26 from her third-party shipper about a possible UPS strike. It suggested that she switch to FedEx. That will cost her about $2 extra for each candle that is shipped in the greater New York area. Shipping her candles to California will cost even more.
“We don’t really have a choice now,” Ms Johnson said.
FedEx said it was accepting additional volume for a limited time and would assess how much capacity its network can accommodate. “Shippers who are considering switching volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to start shipping with FedEx now,” the company said in a post on its website Thursday.
USPS did not immediately respond to a request for comment on how it is planning for a possible UPS strike.
Larger companies rely on complex backup plans that have been tested over the past few years. The pandemic and previous customs trade wars have pushed many major retailers with vast global supply chains to diversify the countries where their sellers are and the parcel carriers they use.
“We’ve focused on investing in multiple transportation solutions that allow us to move freight between carriers more efficiently,” said Alexis DePree, Nordstrom’s supply chain chief. “We can do that with a lot more flexibility and speed than we’ve been able to do in the past.”
Some third-party carriers are seeing a boost in their businesses as the possibility of a UPS strike comes into focus for their customers. Stord, an Atlanta-based third-party carrier whose clients include apparel and consumer packaging companies, sent emails telling its customers not to worry. Stord uses a cloud-based platform to offer services such as storage and fulfillment and handles tens of thousands of their packages per day.
By combining the volume of its broad portfolio of client brands and using software to make decisions, Stord has the leverage to better negotiate prices with the big package carriers, said Sean Henry, the company’s chief executive.
“We’ve negotiated with FedEx and USPS on rates around UPS so our customers don’t have to do that,” he said.
Stord said more of its customers have asked it to negotiate with carriers on their behalf. He said that equated to “tens of millions of dollars of annual revenue” for his business.
However, some business owners still aren’t letting the possibility of a UPS strike stress them out.
Bill McHenry, president of Widgeteer, which sells cookware to large retailers, said he felt “a little numb” after navigating the pandemic-related challenges. “I’ve seen a lot of things and the stories I’ve heard and things we’ve had to go through and go through — not just the price, but the mess of thinking you have a container but you don’t,” he said. .
He said the potential rail strike in December was a bigger concern for him.
In the meantime, there remains the possibility that an agreement could be reached between UPS and the union that represents its workers, the International Brotherhood of Teamsters. The union announced Wednesday that negotiations had broken down, after previously saying the sides had reached a tentative agreement. If an agreement is not reached, a strike could take place as early as August 1.
If that happens, “we would be collateral damage,” Ms. Keeler said.