How a UPS strike can affect your business

25 years ago, the 15-day strike by UPS ‘s 185,000 workers severely impacted the shipping options for package delivery. Many small and medium size manufacturers were forced to scramble and find alternatives methods to get their packages to their customers. Additionally, these alternative methods proved to be more costly and less convenient for both the manufacturer and their customer.

Now more than 340,000 UPS workers are threatening to strike and if that occurs, it would be the largest single-employer strike in US history. Coupled with the fact that during the pandemic customers became more reliant on the services UPS has to offer, such a strike could have dire implications. UPS delivers the equivalent of about 6% of the nation’s GNP or about ¼ of all US parcel volume. Currently, competitors such as FedEx and USPS lack the capacity to absorb the nearly 20 million packages a day, UPS would stop delivering.

Although it is true that more alternative package shipping services have popped up since 1997, if the strike lasts longer than a week, SMEs are likely to experience empty shelves, higher prices, and longer delivery times. Some larger companies like Walmart, Target and other big box chains have built-in other delivery options, but SMEs would be most severely impacted from a lengthy strike.

SMEs need to take proactive measures to maintain their supply chains and meet their customer demands:

Prepare for disrupted operation if reliant on UPS for day-to-day operations, by increasing inventory levels for both raw materials and finished product to meet delivery deadlines. Explore potential for local sourcing.
Investigate alternative shipping solutions. Compare costs, reliability and ability of DHL, FedEx, USPS, and local/regional couriers to meet the anticipated increased shipping volume.
Leverage technology solution to track and manage inventory to mitigate supply chain disruptions. Automate your logistics with multi-carrier shipping software.
Communicate with customers and suppliers about plans to deal with shipping disruptions. Customer loyalty may be maintained by offering a discount or some other type of accommodation during this challenging period.

All challenges offer opportunities and as such, a potential UPS strike may pave the way for SMEs to consider diversification of shipping partners, exploration of local sourcing options and optimization of inventory levels.