Worse than Feared and STARTING: The Multi-Billion Dollar Strike.

I'm blown away yesterday I made a video

that honestly I thought was going to get

like 2 000 views I did not think this

video was going to do well but I wanted

to cover it because I thought it was

really important to address the

potential disaster that's happening at

UPS and even though I initially

dismissed it I realized my mistake that

this is not something that we should be

dismissing we should be paying attention

to what's going on at UPS because even

though technically we're in a freight

recession and Freight volumes and

package and parcel volumes are

plummeting revenues

aren't really plummeting ad companies

like ups and UPS's margins are still

doing pretty dang well despite this you

have UPS walking away from negotiations

with arguably one of the the largest

unions actually probably the largest

Union in frayed and a very very large

Union of almost uh you know what

one-third of a million individuals it's

remarkable and yesterday in the video

where we talked about this potential for

an inflationary Spike due to a UPS

strike think about it snarled Supply

chains delayed inventory accrual meaning

potentially higher prices for goods and

services again as people are now

creating whereas businesses and

individuals are creating wait times

again this could be a disaster I mean

even just the threat of a strike could

lead to more ordering and individuals

basically uh stocking up earlier again

potentially driving up temporarily at

least CPI and PPI uh in future months

but because people potentially are

worried that somebody who handles

somewhere around 37 percent of shipments

UPS which company not somebody uh it it

might completely shut down uh

historically for as long as maybe two

and a half weeks likely for potentially

up to a week before UPS realizes they

need to negotiate with the Teamsters

Union but what I wanted to say what I

was blown away by well I guess I should

say before I was blown away by is I want

to give you a quick reiteration as well

that in addition to going through the

earnings at UPS I actually think it's

very very important that UPS

make sure the a deal with this this it

will probably my expectation get dealt

with before the end of the month I think

that would be very smart I think the

28th is probably probably a good Target

that would be a Friday right I think

that's Friday before the 29th and 30th

uh the 31st I think is a Monday that'd

be really good last opportunity to get

this done uh and it would be nice to

make sure there is no shutdown or what

was mind-blowing was

I went into that video yesterday knowing

that uh 97 of teamsters unions were for

this strike but I was more mind blown by

the support this video got I again

thought this video was gonna get like a

thousand views and like it was gonna be

super Niche and super small of a topic

but no it was the best performing video

I posted yesterday with over 70 000

views in in just a matter of hours uh

and I'm gonna look at some of the

commentary here look at some of what we

got this is incredible I worked with

them during the holidays the drivers get

a great deal they earn it though running

up and down 100 plus driveway driveways

and at steps every day except Sundays

planning and consolidating all your

packages for efficiency and doing it

safely it made me a better driver they

do so many details Amazon doesn't UPS

workers well I'm gonna heart this ups

and I really want to dive into some of

the reactions here and see what what

we're getting if we can glean any

insights UPS workers will never go work

for Amazon it's a mass of downgrade in

pay and benefits if you actually look at

the details this is amazing I mean these

I'm not in the freight industry but

clearly there's a big difference between

the professionalism that you get at UPS

and and Amazon you know from what we're

getting from the commons here and you

you kind of see this too but let's just

leave that there all right uh so uh

nobody from UPS is going to work for

Amazon they'll have to take a 50 pay cut

which you know I will say this is

actually an interesting argument like

wait a minute wait a minute

on one hand the the UPS Union is saying

we need more pay

but then on the other hand we're saying

yeah but the competition is paying way

less so I think that's probably an

argument that doesn't bode too well for

the UPS unions that the competition is

paying way less probably doesn't support

their argument but I will say I mean

we've got a UPS guy that's been

servicing us for like I don't know a

decade now it feels like I think it's

been eight years that we've been here

his name is Brian this guy's amazing I

mean he always he tells me about his

retirement how uh how he loves working

for the company uh maybe not recently

with this threat of strike going on I

should talk to him again when I see him

actually I got a UPS scheduled for the

delivery today so yeah I wouldn't be

getting that if there were a strike oh I

didn't even think about that like this

is personally going to affect us too

right but anyway uh he's got two kids

officially two kids he might have had a

third now but he's one of the happiest

guys I've ever seen I think one of the

reasons he's so happy is because he

legitimately loves his job and if

anybody's like Brian at UPS that it must

original ordinarily be a great place to

or somebody here says I work for UPS for

11 years there was a strike threat

basically every time there was a new

contract coming up the drivers make very

good wages once they hit full scale the

benefits are basically the gold standard

there too even for part-timers highly

doubt anyone would move to Amazon uh wow

zero AC working and 100 degree trailers

loading by hand oh at Amazon yikes uh

talked to a UPS worker and he says the

air condition is like a bandage he's

ready to go on strike okay interesting I

work for UPS no one will leave if the

strike goes on long enough they'll just

work and get shunned by everyone

striking looking forward to the strike

let's go interesting not overstaffed all

UPS drivers are complaining about

excessive forced overtime especially in

this heat now this is actually really

interesting I didn't know this and uh

you know obviously this this comment's

getting a lot of attention here I was

under the impression that if Freight

volumes were declining that it'd be

possible that you'd have too much staff

but it appears that's wrong uh okay get

to know as a current employee I agree

with Kevin when he says the strike will

be short the Staffing comment is off

though the summer isn't friendly so we

will get a lot of quits and management

claims we are understaffed interesting

so you get a lot of quits in the summer

that's very interesting this is very

insightful this is that gives I mean

really very functional comments a

commentary here uh so I see them driving

with the doors open AC must not be a

benefit for them I think that's honestly

efficient an efficiency thing imagine

you have to open the door every single

time to get in and out I'm not sure

about that you know you like there's a

it's back in Florida back when you drive

around a convertible in a hot day I

found you would actually have to blast

the AC with the top open of the

convertible just to enjoy it because

it's so hot that you have to have the AC

on and the top down

uh so but really the support here is is

absolutely incredible now what I'm going

to do is I'm going to look at some more

news that we have here we need some more

strikes to get companies to uh learn

Vanguard owns nine percent of EPA of UPS

wage price spiral coming all unions

getting 20 rages this year some of that

could be lagging though Ryan Reynolds I

love your show okay

um all right so what what are some of

the latest updates that we have here

before we get over to the course member

live just remember to join that uh we've

got an expiring coupon code in about uh

one week and six a days for the FED

meeting we'll have an expiration there

and email us at snap at me kevin.com if

you have questions on those or just go

to meet kevin.com we'll learn more so uh

The Wider variety of alternative

carriers today versus 1997. the last

time UPS Teamsters went on strike and

software delivery demand are key reasons

why this strike is possible I'll see

that's interesting this aligns more with

my original argument that I think

there's there's potentially you know if

you have less demand for for uh Parcels

than potentially that could lead to more

of a a a an aggressiveness from UPS as a

result shippers have less of an appetite

to accept aggressive rate hikes well

obviously workers would probably argue

that they're not aggressive rate hikes

but anyway

uh from uh oh this is from Cher from um

from UPS oh interesting so there's this

argument here that maybe people who are

shipping are less interested in paying

higher fees for for uh ups but then

again you look at the revenues and

they're through the roof despite the

decline

in uh actual parcel numbers yeah UPS has

no rate increase to announce a

spokesperson said the carrier

periodically evaluates its prices to

ensure they reflect the value they

provide UPS and FedEx and other carriers

typically announce annual rate increases

in the second half of the calendar year

last year 6.90 classic number 6.9

increase from UPS cited the need to

support ongoing expansion and enhance

its capabilities as reasons for its

implementation the price hike the one

thing we do know is that rates will go

up at some point in the future uh but

how much of that is due to uh giving up

or or giving in with the team Service as

anyone's guess they have to remain

competitive remains to be seeing how

much wages will increase in the next

contract uh it looks like they're also

hitting roadblocks over specifically

part-time pay

yeah however it does look like the

conclusions we're getting here at least

from Wall Street are that UPS employers

are poised to see higher wages so

there's going to be some kind of wind

coming here

uh FedEx and others would capitalize on

higher rates one limiting factor uh one

factor limiting how much UPS can raise

rates is its competitor FedEx to

delivery Giants consistently stay in

lockstep with each other although I will

say UPS when we looked at the margin

yesterday it's substantially better

margins than FedEx

but it's not just then it's also

alternative parcel carriers like on

track and lso and then of course you've

got Amazon

okay interesting weaker demand

complicates price hikes this is the

weaker demand for the parcels makes

sense UPS demand cooling off after uh

pandemic surge the company's average

daily volume by quarter what's happened

in the last year is Carrier pricing

power has diminished significantly which

means it's going to be harder to you for

UPS to pass on the rate increases and

that's why they seem to be stuck with

pressure for wage hikes while not being

able to potentially pass those on which

means margins will get squeezed but then

again margins are already so good

all right so it gives us a little bit

more here uh here's a USA Today piece

that argues let's see here what are they

arguing USA Today piece on this

uh UPS workers may go on strike what it

means for you all right let's see here

the last time they went on strike was 97

consumers could face uh uh let's see

small businesses struggle to restock

their shelves and hospitals had a hard

time securing supplies according to the

nyt consumers could face that and more

if this Teamsters Union Teamsters Union

it goes on strike and they do not reach

a deal by the end of the month if a deal

does occur it will be very disruptive

says the department for Supply Chain

management at Michigan Michigan State

University this consumer is going to be

more affected getting everyday products

we battle on that is an interesting

thing back in 97 you didn't have uh what

you had today Amazon uh and that's

potentially going to make a strike even

more disruptive this time around than

ever before that honestly gives the

union a lot more bargaining power but it

it's gonna be it's gonna be a problem

because if there is a strike it is going

to affect inflation uh and and we don't

want that like we got good inflation

reports here please UPS

and you know obviously it's a give and

take but both sides figure this out we

don't want nobody wants to go on strike

uh but I understand the people will if a

strike does Place take place it would be

the largest strike in employer history

wow uh that's actually incredible uh

largest strike in in U.S history that is

even a short-lived strike could have

huge impacts for consumers I agree with

that uh they have a large Network taking

the kind of capacity out of the market

even for a day we'll have Ripple effects

at nearly 25 million packages daily

longer wait times are expected during

the strike as shipping centers like

FedEx and the USPS deal with an influx

of influx of packages to try to make up

the volumes and there's no way they're

going to be able to make that up FedEx

will prioritize existing customers while

trying to get people to switch of course

supply chain disruptors spare parts for

motor vehicles and this is already where

we're getting inflationary concerns

right you have inflationary concerns at

uh in in Insurance Services in motor

vehicle services uh not good these are

places you already have inflationary

concerns and they can get even worse

supply chain Healthcare supply chain

could take a hit since wholesale

companies that manufacture medical

devices and supplies rely heavily on

companies like UPS other Industries with

dealers that rely on getting spare parts

from wholesalers via UPS including

farming and construction and that's

another thing is the construction

industry it's just absolutely blowing up

right now because the home builders have

such big PP because there's so little

inventory for housing the home builders

have so much pricing power baby

that last thing you want is a shorter

delivery time frames on construction

material you know where I did just post

a link for course members for the live

stream uh sorry we are going to just do

the Bell here really quickly usually we

have a tradition of doing the Bell

together with course members so we'll

get the Bell together here

I need to keep talking about this

inflation for just a moment we'll start

with the story but quickly let's put the

Bell together here

[Music]

celebrating a race

a recent fact

Abacus life a buyer of life insurance

policies recently listed sorry out of

tradition we always we like to do the

ball together I every day I really enjoy

doing the Bell generally do it with

course members but I just have to keep

talking about this UPS issue because

it's actually a big deal

um I want to I want to give this example

I spoke with

um

it was it wasn't it was uh I I bought

this computer uh from this company

called I buy Power and uh first of all

never buy from them their customer

service was was like outright rude to me

I I literally I paid for Rush uh

production on July 1st and they're like

cool we'll ship your product out by the

six and I'm like really paying 200 for

Rush production or whatever was 100 200

Rush production it's gonna take until

July 6th like I get it there's July 4th

but that's one day

anyway

so that was lame

but then they're like oh we'll overnight

it and I'm like okay fine if you

overnight it on Thursday it'll show up

on Friday

but they didn't get it out until Friday

and then they overnight it and they're

like oh well we don't mean weekend

overnight we mean business day overnight

and then it's supposed to show up on

Monday this Monday just you know three

or four days ago but it doesn't show up

on Monday because it gets delayed

because they got it to FedEx the carrier

too late

and then so that it doesn't show up

until Tuesday but the point is like

we we had like you know a lot of things

lined up in the business so from like a

personal anecdotal level we're like ah

we really wanted that computer that's

why we paid for a rush for it and like

that's just one box

UPS is delivering 25 million a day and

everyone's stuff is just as important as

somebody else's but the exception

obviously like hospitals we could

probably say they're a little bit more

important but anyway other Industries

with dealers that rely on getting spare

parts from wholesalers via UPS including

farming and construction consumers are

not going to be the only ones it's a new

shock to the supply chain this is

literally the last thing we want please

we want inflation to stay good

don't ruin it UPS

a strike could also raise the cost of

shipping even if delivery companies

don't increase their rates amid a

stoppage UPS customers may need to turn

to higher priced Alternatives from a

competitor or pay for expedited shipping

elsewhere

didn't even think about them

you think about it if you're like okay

my stuff is sitting at the UPS store

it's not getting picked up I'm going to

take my box back

now I lost a day or two now I have to

pay for overnight where ordinarily I

could have just paid for ground I had

another service provider to get my

product where I need on time that's not

great I think the increases increases

your producer costs

uh hits margins it's not good

uh a strike could also raise the cost of

ship right we talked about that that's

actually a good piece by the USA Today

it may not be an immediate change in

prices but it is maybe leaning into some

direct payments for more expedited

shipment right what consumers do shop

online do it now but honestly even the

recommendations to shop online now

you know just basically accelerates the

inflation and pricing pressure that you

end up getting now

other Shoppers should consider shopping

in person it's also more expensive and

avoid or ordering pickup to avoid

delivery delays a feat that should be

easier to accomplish amid warmer weather

months uh it's a blessing in disguise

that this is happening in the summer

well maybe not for the drivers because I

mean you got to drive around the heat

but this is intense and uh what's

remarkable is at least what I'm seeing

is I'm seeing no progress on this and I

really hope we get more progress on this

uh but uh it doesn't look like it's

coming yet uh I am going to I want to

take a peek at uh Baron's take on this

so uh the International Brotherhood

Teamsters put out a statement saying UPS

has walked away from talks right that's

what we talked about last uh video

yesterday

uh I guess the actual average number of

packages delivered per day is 24.3 a

little less than that 25 I mentioned

uh just to get a little bit more uh

exact and again mark your calendar for

July 31st because July 31st is uh is

when we need a deal by if you go to

carrier okay well that's actually a USA

Today reprint it's looking at the

carrier uh journal and I'm going to look

at

NPR's piece on it quickly I know some

people don't like NPR everything's

getting so politicized these days it's

freaking exhausting uh but uh NPR does

call them much more vulnerable in the

event of a strike this time around uh to

basically other companies taking over

now that's also a downside for both

sides right because you don't want UPS

volumes to end up going somewhere else

because then you ultimately have less

packages so it's really important this

just gets dealt with for both both sides

the teamsters and UPS before the 31st

but also the entire economy so please

get it figured out uh anyway uh thank

you everybody so much for uh joining me

on uh the meet Kevin report episode 122.

I've got to jump to the course member

live stream I'm already late and quite

frankly I need to make another cup of

coffee really quickly so I will be there

in about three to four minutes as soon

as the coffee is done Brewing thank you

all so much please check out the courses

if you like my perspectives link down

below and we'll see you in the next one

goodbye everyone now I want you to know

this when it comes to a i time is what's

going to make you money and if you can

prove that value to an employer you'll

always be able to be employed so this is

another way of making sure that you

don't get replaced but