The Great Reset Crash Is STARTING: The Multi-Billion Dollar Strike.

here's an email on July 5th from the UPS

at Teamsters Union they wrote The

Following big picture of their entire

Teamsters well I mean at least the

people who showed up for I suppose this

event anyway it says here around 4 P.M

or Sorry 4 a.m oh okay I wasn't

expecting that one around 4 a.m UPS

walked away from the bargaining Table

after presenting an unacceptable offer

to the teamsters that did not address

the members needs the UPS Teamsters

National negotiating committee

unanimously rejected the package

following negotiations UPS refused to

give the teamsters a last best and final

offer telling the union the company had

nothing more to give now keep this in

mind the Teamsters Union is arguing here

that they are simply asking for a last

fast and final offer beyond what UPS is

saying was already their offer uh so

this is kind of something that you see

in real estate as well where you know

you'll write an offer as a buyer and be

like all right look your place is listed

for 450 I'm coming at 4 30. the seller's

like I'll take 445. buyers like I'll go

440. final offer and the seller's like

give give me one more last and best

stuff and you're like that's it and

everybody just gets really frustrated

and entrenched anyway that kind of

sounds like someone what's going on over

here obviously to a much greater scale

with the impact of many many more people

in fact up to potentially 340

000 people that's more than a quarter

that's more than a third of a million

people it's insane all right so what do

we have here quote the multi-billion

dollar Corporation has plenty to give

American workers they just don't want to

says Teamsters General president Sean

O'Brien UPS had a choice to make and

they have clearly chosen to go down the

wrong road the UPS Teamsters contract

covering more than 340 000 full and

part-time employees expires July 31st

that's in about two and a half weeks

that's actually right after the next

Federal Reserve meeting

no additional negotiations are currently

scheduled also not great the teamsters

have repeatedly made clear that UPS

members will not work beyond the

expiration of the current contract in

June a rank and file UPS Teamsters

authorized to strike but overwhelming 97

all right that also already made me a

little bit nervous because when I read

that part because look it's very common

for parts of a union to say let's strike

but then when you get actually down to

the union level people are like look do

we really want to strike look we're okay

with this offer clearly clearly if 97 of

folks in these unions are saying no

we're not okay with these terms clearly

there's a high likelihood year of a

strike which means either UPS

provides a better offer

or a strike happens and the last time a

strike like this happened was in 1997.

in 1997 UPS basically stopped being able

to deliver packages for 15 days it cost

the company in 1997 almost

850 billion dollars the crazy thing is

now

UPS is probably even more vulnerable

because you have a whole lot more

competition it's not just FedEx or the

USPS but it's also the fact that you've

got companies out there like I mean I'm

just gonna say it Amazon that are like

please give us more of a reason to be

able to raise what we could you know

essentially uh uh uh uh you know hire

workers with uh and if we have a larger

worker Supply then maybe we can actually

get experienced workers faster I know

I'm not sure if Amazon is is you know

looking to kind of recruit from UPS but

it would be very interesting uh because

you uh you potentially end up having

this larger shift of individuals from

UPS to maybe other companies especially

if these individuals do have to go on

strike and they get frustrated with the

ultimate resolution of this I do expect

there will be a resolution but the

problem the bigger problem will likely

be not so much the benefit to the other

papers the dhls the FedEx the USPS

the bigger problem is going to be what

is this going to mean for Supply chains

if UPS delivers 37 of the parcel Market

by Revenue which is larger than FedEx by

four percentage points double what uh

the United States Postal Services and

triple what Amazon Logistics is then all

of a sudden you potentially have a real

snarl and Supply chains now the good

news is our economy does have this

insulative buffer of inventory and even

though we thought that we've run through

most of our excess inventory

most of the individuals who

um or sorry most of the businesses who

have gone through the last you know 18

months or so still actually have some

degree of excess inventory Nike was

supposed to be one of the big winners in

this environment where Nike was in a

position of of pricing power was the

idea I didn't think this was true and

sure enough in the last earnings report

you actually had Nike basically begging

uh for more discounts in the earnings

call it wasn't a good look it wasn't a

good look at all you basically had them

going we're going to be discounting

sorry

and that's again because most businesses

seem to have more inventory than they've

had during the supply chain crises of 21

and 22. so will potentially an extra one

to three weeks of delays via UPS have a

massive impact on our economy

obviously it's hard to say there's a

real potential that it could the places

it's probably going to have the biggest

issue uh are going to be in areas where

companies haven't stocked up enough

inventory it would actually be prudent

now to potentially start pre-ordering

more inventory if inventory is tight for

and somebody is regularly using and

relying on UPS contracts for parcel

delivery maybe get that inventory

ordered now so we don't end up in supply

chain snarls like we had in 2021 so

again if companies have enough access

inventory then maybe two to three weeks

of a supply chain disaster with UPS

wouldn't make that much of a difference

uh because we have this available sort

of buffer of excess inventories however

it's still likely going to create some

form of a hint to GDP in that quarter

and this could be bad because of the

psychological implications imagine if

the UPS strike goes on long enough and

slows ordering down or long enough to

where all of a sudden we have a

consumption slowdown or a you know

temporary consumption slowdown that ends

up hitting CPI and ends up hitting GDP

now the question is okay are we paying

more for shipping rates leading to

higher core Services costs which would

be bad as well as potentially higher

Goods costs so now all of a sudden it

looks like inflation is reanimating on

the good side and the core inflation

side and then you end up having less GDP

output just by a a marginal difference

but you potentially end up going

negative for for Q3 which is basically

what the Bears have been calling for all

along that oh we're going to go negative

GDP in Q3 well now you potentially can

have who knows but you potentially could

have UPS strike contribute

to the start of an actual recession

which could then become self-fulfilling

once data starts coming out so I think

the ESU is actually a lot potentially

larger than I initially suspected and

that's my fault I should have covered it

earlier at least about a week ago when

this really started but I'm covering it

now and what I thought was very

interesting is uh some of the research I

was looking at indicates that UPS is

potentially more vulnerable to this

strike now than they previously were now

there is this potential as well that

this additional vulnerability actually

means UPS would be more likely to try to

solve this issue sooner rather than

later I would highly anticipate that

you're going to have some really serious

negotiations probably between the 26th

and 31st and it wouldn't surprise me to

see some form of near-deal struck by the

end of the month and then even if maybe

you get a day or two of striking I think

you'll end up seeing UPS Bend or the

teams somebody's going to Ben the end of

the month is Monday the 31st

I cannot personally expect this to go on

Beyond August 7th so that would be about

four days of striking first second third

fourth and you have the fifth and sixth

of uh of the um of the over weekend so I

find that potentially uh

a likely outcome that this strike ends

up going away uh by being solved it'll

be a last minute negotiation much like a

debt ceiling negotiation that you uh

that you really get uh in Congress but I

do think that it is quite interesting

that UPS reports their second quarter

results on August 8th which is

just literally a few days after I when I

expect this this issue to be resolved

now personally I want to make it clear

I'm I'm a big fan of making sure your

employees are paid well and uh you know

if not even overpaid whether that's you

know a combination of of benefits uh or

just pay or stock based comp whatever it

is a big fan of longer term employees

getting paid very very well and uh you

know I hope UPS can figure this out not

only because I don't want supply chain

problems and I don't want issues uh with

the economy but also because I think

it's I think there's an opportunity for

uh for ups and the teamsters you need to

figure this out but uh this is

definitely something that's a little bit

more uh intense I suppose than uh than

potentially first thought so I would pay

attention to this over the next few

weeks if you haven't yet it's one of

those near-term catalysts that just

isn't fantastic uh there are actually

surprise amazingly few near-term

catalysts I was talking about this

yesterday I was saying

you know really once you're

um once you're

uh what's it called um once you end up

getting gosh where am I trying to go

with this train of thought hello uh oh

uh once you get through these the CPI

report in the FED meeting your near-term

catalysts are somewhat far and few

between you know a lot of bears right

now are arguing that oh don't worry the

election is coming Kevin and when the

election comes you know that's the next

Catalyst and I always think it's funny

that when bears start talking about the

election cycle it generally is a warning

to me that the Bears have run out of

bearish things to talk about but anyway

I do want I do find it very interesting

that at the same time as you have this

potential strike for the freight

industry is technically in a recession

and this is worth considering because

that's probably putting a massive

squeeze on a company like ups and so

this is where there are always two sides

of the story it's not just the employees

but it's also the actual you know

business model what's going on obviously

uh and you know any individual versus a

company it's always sort of like hey

like an individual deserves as much help

as possible but now it's 340 000 people

I mean it's basically a company versus a

company it feels like or it's a company

versus a few individuals who's left you

know outside of this but what we found

very interesting is that uh impartial

volumes are down anywhere between 20 to

30 percent uh it across the board I mean

Freight parcel overnight International

uh you name it domestic it's it's

intense how much volumes have shrunk for

shipping to some extent it is also

possible and and this is the or I think

Sinister potential point of view

but to some extent it is possible that

and again this is this is going to sound

rough but it is possible that UPS is

like please

let's get fewer employees in other words

have some people leave because maybe

we've over hired that is a real risk

here that potentially UPS has seen so

much of an earnings recession uh and and

Freight recession they're like we are

now over staffed we can't fire people

maybe if we go through a strike some

people get so pissed they'll just leave

and then they're gone without us having

to fire them again that's that sounds

very insensitive I'm just thinking out

loud here about how there is that

possibility that UPS hired four shipping

volumes that were 2021 level but now

you're actually at 2023 dumpster levels

of of uh shipping that's not great now

Bloomberg intelligence argues that the

UPS negotiation is a huge opportunity

for FedEx

that not only is there the let's see

here contract expires July 31st last

time they went on strike we talked about

that from 1997 cost 850 million dollars

this is an opportunity for FedEx it is

uh they don't believe that a prolonged

walkout is likely okay that's

interesting that's actually somewhat

similar to what I think I think you're

maybe at a weak Max a businessweek Max

uh for a walkout so they agree with that

and at the same time if we look at their

earnings

let's take a look here we can see

exactly what's going on in comparison

here so look at this here are their

revenues this is UPS 2023 this is on

their latest 10q and what you'll find is

that your next day air is uh Next Day

Air Revenue actually is uh down only

about year over year here five percent

uh at UPS and it's volumes that have

really been getting hit but they're

keeping that Revenue up look at that

this this is actually a good argument

for uh the union negative 15 on deferred

and then ground is actually positive so

even though you've had some of these

volume crushes

they're actually positive on what

they're charging in revenue for ground

now I wonder how their costs of goods

sold has moved let's look at cogs

so we'll go over here

and oh how interesting so their revenue

their top line revenue has gone down

six percent and their compensation and

benefits

has gone down about one percent so you

are getting a bit of a squeeze here and

you're not seeing as much of a crush at

UPS as you certainly are like a FedEx uh

minus one percent ish yeah 1.2 percent

over here so so you see that margin

squeeze there you're operating profit

for example at UPS

was 11 in the last quarter and then last

year you're at

13.3 percent so you've definitely seen a

margin squeeze here 11.1 13.3 percent

and that's probably contributing to some

of UPS's frustration along with what's

going on in just the rest of the

industry with volumes being down so much

they look at FedEx investor relations

may as well take a quick peek over there

and see how they compare because that

might also give you an idea of hey does

FedEx is it would FedEx even be hiring

and mass uh you know I mean how much do

you need to hire in in a freight

recession so that does potentially

weaken some of the positions of the uh

the the union workers for UPS so we'll

go ahead and just briefly look at uh

FedEx and just see how they compare but

either way there are some broad

implications to this uh to the entire

situation between FedEx or sorry between

ups and the Union and I think this also

all of it reiterates why you have a lot

of companies that are very very afraid

of unionization whether it's Amazon or

Starbucks or uh quite frankly even Tesla

there's a lot of fear about unionization

because unions can be very very strong

especially when they have uh coordinated

union vote

so uh if I look at

let's see Revenue by service type and

then we've got I want to find volumes at

FedEx I don't think I can quickly find

those at FedEx that's okay that's

Revenue by service time let's just look

at their operating profit and just

compare okay so here's the FedEx

statement quick look at their operating

profit if we look at 22 169 in rev

pretty actually close here to what you

have at UPS 10 42. wow uh you know all

other things be assumed equal here FedEx

is only sitting at about a 4.7 percent

operating margin Which is less than half

of what you have at UPS so you know that

that doesn't that doesn't add well to

UPS's argument that they wouldn't be

able to support additional compensation

when uh they already seem to have an

industry leading margin despite the

volume recession that they're in wow

it's incredible so this gives us a

really good look into what's going on in

my opinion at least a surface level look

about

um what we're seeing

with the UPS strike and I would mark

your calendar for the 31st of this month

and really pay attention to what ends up

breaking down here or coming out of this

and it will probably again my guess is

hear a lot more about this on the 27th

and 28th which is really the these are

the your last business days before uh

the you know Monday the 31st but I

personally wouldn't want to pull it out

to uh to that uh that low of a level or

that close rather should I say yeah I'm

just looking at FedEx here their Freight

Revenue this is where you hear about

that Freight recession a lot down 13 in

Revenue year over year total uh total

let's see then we've got package Revenue

seven percent International priority 14

all of these are negative and these are

revenues so it's assigned to me that if

volumes are down in the excess of 20

pricing has come up and it's all also

likely that the individuals delivering

packages have seen pricing move at UPS

and with the uh you know other companies

like FedEx and that so uh again more

more bargaining power here for

the workers now I want you to know this

when it comes to AI

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

foreign