Kathryn Keeler and her husband, Stuart de Haaff, own an olive oil business in the hills of central California. The pair spend their days harvesting the olives, bottling the oil, labeling the glass bottles and shipping them, relying primarily on UPS to get their product to kitchens across the United States.
They are far from alone. UPS handles about one-fourth 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 contract of employment between UPS and 325,000 of its employees expiring at the end of the month and a possible strike looming, business owners across the country are facing what could be the latest in a series of supply chain disruptions facing them. since the start of the pandemic.
Some preemptively turn to FedEx, the second largest private carrier in the United States, or the Postal Service. Others call their third-party shippers — companies that partner with the likes of UPS, FedEx, and DHL to handle their customers’ shipping needs — to make sure their packages can still reach their final destination, even if there’s a strike.
The logistical challenge is just an additional burden for companies that have come under pressure in recent years.
“Maybe a bigger company can withstand that kind of situation,” Ms. Keeler said. But as small business owners, she and her husband “don’t have a lot of extra time in our day and age to be on the phone with 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. Businesses had to navigate Covid-related closures at factories in China and Vietnam. Worldwide delays occurred when a large container ship became stuck in the Suez Canal, causing containers to pile up in the Port of Los Angeles. Those situations affected the way goods entered the United States.
A UPS strike could hamper the way brands move their wares domestically.
“This is something that hits us on our home court, and how do we fix that?” said Ron Robinson, the CEO of BeautyStat Cosmetics, which uses UPS to ship its skincare products to retailers like Ulta and Macy’s.
One strategy his team will lean on is to try to bundle packages and send as many as possible at once, he said.
Switching to another carrier will cost some companies.
Ryan Culver, the CEO of Platterful, a monthly meats subscription service, also uses UPS. Switching to FedEx Express — necessary to ensure the meat in its packages reaches consumers on time — costs about $5 to $10 more per delivery.
Teri Johnson, the founder of Harlem Candle Company, received an email from her third-party shipper on June 26 about a possible strike at UPS. It suggested she switch to FedEx. That will cost her about an additional $2 for each candle shipped in the greater New York area. Sending her candles to California costs even more.
“We don’t really have a choice at the moment,” Ms Johnson said.
FedEx said it was accepting additional volume for a limited time and would assess how much capacity its network could hold. “Shippers who are considering transferring their 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 at Thursday.
The Postal Service said in an emailed statement that it “has a strong network and we have the capacity to deliver what is offered to us.”
Larger companies rely on advanced backup plans that have been tested in recent years. The pandemic and previous tariff trade wars have prompted many major retailers with global supply chains to diversify the countries where their sellers are located and the parcel carriers they use.
“We’ve focused on investing in many transportation solutions that allow us to move cargo faster between carriers,” said Alexis DePree, chief supply chain officer at Nordstrom. “We can do that with much more flexibility and speed than we could in the past.”
Some third-party carriers are seeing a boost in their business as the possibility of a UPS strike comes into the picture for their customers. Stord, a third-party logistics and technology provider based in Atlanta whose customers include apparel manufacturers and consumer package companies, has sent out emails telling its customers not to worry. Stord uses a cloud-based platform to provide services such as warehousing and fulfillment and processes tens of thousands of their packages per day.
By combining the volume of its broad portfolio of customer brands and using software to make decisions, Stord has the ability to better negotiate prices with the major parcel carriers, said Sean Henry, the company’s CEO.
“We’ve negotiated rates around UPS with FedEx and USPS so our customers don’t have to,” he said.
Stord said more of his customers had asked to negotiate with carriers on their behalf. He said that equated to “tens of millions of dollars in annual revenue” for his company.
Still, some business owners are still unnerved by the possibility of a UPS strike.
Bill McHenry, president of Widgeteer, which sells cookware to major 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 survive — not just the prices, but the turmoil when you think you have a container but don’t,” he said. .
He said last December’s possible railway strike was more worrying to him.
Meanwhile, the possibility of a deal between UPS and the union representing its employees, the International Brotherhood of Teamsters, remains. The union announced on Wednesday that negotiations had failed, after previously saying the parties had reached a preliminary agreement. If no agreement is reached, a strike could take place as early as August 1.
If that happens, “we would be collateral damage,” Ms Keeler said.