Profiteering at UPS

Illustration by Mike Konopacki, Solidarity

This morning, UPS sent an email to all customers announcing another rate hike — this one to be 5.9% — following last year’s increase of 4.9%. On its face, this may appear innocuous, but it should be viewed in proper context: UPS has enjoyed record profits since the start of the COVID pandemic in Q2 of 2020.

What kind of profits are we talking about? How about $2.9 billion in the third quarter of 2021 alone. Let that number settle in for a moment: The third quarter is July, August and September, or 92 days. That equates to more than $31 million per day in profit. PROFIT, not revenue. So, after paying all their salaries, fuel costs, maintenance expenses, etc., UPS hoarded $2.9 billion for its shareholders. In 92 days. And that was just Q3 of 2021.

Since COVID became widespread, in the spring of 2020, UPS, along with Fedex and other package carriers, has profited enormously from the pandemic. You could say this is not their fault, as consumers have been buying record amounts of goods online, requiring delivery. True. But at the same time, UPS has done little to share that good fortune with the employees who do the work that generates these profits, not has it invested commensurably to ensure service levels to its customers.

The average pay for a UPS warehouse worker is under $30k/year. That’s less than $15/hour. UPS drivers get paid considerably better, at about $88k/year — but drivers are also working 60+ hours per week these days, so $88k is really about $60k when prorated to a normal work week. Not bad, but not great when you consider the cost of living, as well as the fact that the company just poured almost $3 billion dollars into its shareholders’ coffers. How about sharing the love, UPS?

UPS CEO, Carol Tomé, likes to deflect responsibility by claiming that the company just can’t hire enough people. In reality, UPS keeps costs down and profits up by putting its hiring efforts into bringing on part-time, seasonal workers. And then letting those lower pay, no benefits workers go once they are no longer needed. (Which in itself is absurd, since there is a constant need for more people.)

At the same time that UPS is enjoying record profits, service levels have all but disappeared. Delayed delivery has become a norm, and UPS, like Fedex, has abandoned its standard service guarantees, recognizing pretty quickly that if it had to refund shipping charges every time it missed a delivery date, that $2.9 billion pot of gold it was enjoying would be quickly diminished. And that would not please its voracious investors. So, a customer now has no recourse when UPS does not provide the level of service for which the customer paid. In almost no other industry could you get away with charging for a service and not being held responsible when you failed to deliver that service. But UPS gets away with it.

All the while raking in the cash to the tune of $31 million every day, $1.3 million every hour, $22k every minute.



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