UPS strike could devastate the economy, and could be eight weeks away | Hacker News Reader

UPS strike could devastate the economy, and could be eight weeks away

cnn.com

50 pointsrntn42 comments

What a load of anti-worker propaganda. CNN would like you to think workers are obliged to work at wherever rate UPS offers because it's in the interest of "the economy". If UPS failed to reach a contract with any other key supplier they would be blasted by the press. UPS management has had plenty of time to negotiate. Management is playing a game pushing to the limit of a strike, and maybe into a strike, to get workers scared they'll lose a paycheck and accept a worse deal

This has been strike busting 101 since time immemorial. *The whole point* of a strike is to prove how much of a company will fall apart with out labour. It makes management liable for the impending break down because the strikers/union will have made a very public list of demands and reasons for the strike, so it’s on management to figure something out. Resolving problems with concrete decisions is their job after all, like you said about contracts.

However if management leaves it as long as possible so the public gets a taste of the breakdown, they can try and lean public sentiment towards them, painting the workers as “causing” the problem. It’s not their ineffectiveness in resolving a dispute that caused it, it’s those workers who don’t have any respect for the economy/consumers/YOU!

CNN is reporting the news here, this WILL seriously affect things, but they’ve taken the angle that UPS corporate was hoping for.

I think CNN knows this and is hard pressed to push the envelope further than they have.

They note that the company is doing tremendously well at least three times. They also mention that even Deutsche Bank says the company can handle increasing wages. (the bank identifies it as due to inflation not profit, but I'll take my wins where I can)

More than that, they have reported in the past on the record earnings from last year: https://www.cnn.com/2022/02/01/business/ups-earnings/index.h...

The American economy is both weak and strong — or so say articles like these that consistently try to convince us.

Even the slightest mobilization of workers within a single company within a single sector can bring the greatest economy in the world TM instantly to its knees.

I’m either getting sick of living in such a brittle system that is constantly at peril from people wanting to join or stay in the middle class, or I’m getting sick of these articles implying that this is the best we can do and there’s not better options.

Too much cognitive dissonance to be believable.

https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...

Brittle systems were built because they enriched and benefited certain folks (paperclip maximizer but for profits). To build better systems, existing systems will have to be "refactored." With structural demographics constraining labor supply for the next decade, this is an opportune time for Labor to use the power that it has to reverse its 40 year power decline.

https://www.epi.org/productivity-pay-gap/

https://www.pewresearch.org/short-reads/2018/08/07/for-most-...

https://www.barrons.com/articles/the-labor-market-bends-towa...

American economy has become too concentrated to a handful of companies. That makes America a fragile economy.

In a REAL capitalistic economy, a small shipping provider would have raised the capital immediately to capitalize on the strikes, advertised their services to UPSs customers and eaten the company away.

This would have put pressure on the company execs to negotiate fast, give in to worker demands (which are reasonable) just to not lose out on future earnings. If the execs succeeded, UPS would continue to live. If execs failed, the competitor would replace them.

That would have been capitalism but America is far too protective of large corporations.

> In a REAL capitalistic economy, a small shipping provider would have raised the capital immediately to capitalize on the strikes, advertised their services to UPSs customers and eaten the company away.

In a REAL capitalistic economy, a large shipping provider would intimidate their own employees by means of having their own army.

And it would all work out, because the army would actually be composed of the striking workers, hired on short-contracts to intimidate themselves, and any strike-breakers would also be striking workers hired at greater pay; where else are you going to find people with exactly the right knowledge and experience, AND available suddenly? :)

Not really. The army is the part of the workforce they actually take good care of. It might be contracted from a PMC, or even the state because under REAL capitalism the state exists to keep the capital happy.

Wasn't there a part of Catch 22, where the entrepreneur character outsourced the German bombing of some US air base to that very same US air base's bombers?

Sounds about like that. In non-fiction there are just more steps in between to hide it.

>In a REAL capitalistic economy, a small shipping provider would have raised the capital immediately to capitalize on the strikes, advertised their services to UPSs customers and eaten the company away.

In the real world it takes weeks if not months to purchase a delivery vehicle. There are no delivery van lots that you go to in order to browse a wide variety of Morgan Olson and Utilimaster vans and then plop down a million dollars for 20 of them, not that 20 of them would allow you to run a parcel shipping service. You need thousands. Which means a production run at a manufacturer who is already booked through next year.

Hell, it would take weeks just to figure out WHERE to advertise much less actually inking deals, unless you like throwing money away.

It doesn't matter if you apparate a trillion dollars, time is immovable. It took a decade of conceptualizing and two years of actualizing to start FedEx.

If a rationally-acting rational actor rationalizes ten quadrillion dollars of gold into his pocket, it doesn't matter one fucking bit.

They can't buy the facilities, systems, equipment, and experience needed to do shit. They can't use their iron capitalist will to pour concrete faster.

This is one, of many, fundamental blind spot concerning reality that capitalists or pseudo-capitalists used to working in the fake online venture capitalist world have.

> In the real world it takes weeks if not months to purchase a delivery vehicle.

But you are looking at it from the perspective of someone sitting behind a keyboard, starting from scratch.

In the real world with thriving economies, there will be smaller, underdog players already operating. Maybe they are regional, or maybe they have a slower/smaller fleet.

Whatever the reason, these smaller players rise up to eat the big one because they already have something to leverage. Facilities, workers etc. They just need to raise capital to expand rapidly.

The steps in the parent post are not meant for someone starting from scratch.

>In the real world with thriving economies, there will be smaller, underdog players already operating. Maybe they are regional, or maybe they have a slower/smaller fleet.

Yes. I use them every day. I send million of dollars of aerospace equipment to and fro every year using 3PL, none of which are UPS or FedEx or the USPS.

There are thousands of 3PL firms, each competing with each other.

If you search "full truck" and/or "intermodal" and "logistics" I guarangoddamntee there are a dozen within 50 miles of your zip code.

> They just need to raise capital to expand rapidly.

LOL

If my preferred smaller logistics firm (Polaris) was given eleventy-billion hexaseptillion dollars it would take two years at a minimum just to lease the aircraft, airport slots, and facilities needed to compete with a single-digit percentage of UPS's network.

Again, the fact that people think that smaller underdog competitors to UPS don't exist is a glaring, supermassive-black-hole-sized blind spot that pseudo-capitalists have.

Once again, your understanding of this is based on single anecdotal experiences.

In a thriving economy, there will be multiple underdogs, all competing for different segments of the market. Each one of them will eat market share - which will lead to UPS losing some customers at first. Then, if they can keep nibbling at the market share until they keep acquiring more customers.

There are regional parcel carriers. Two of the largest just merged (OnTrac and LaserShip).

Neither of them, nor the combined, has the assets (physical vehicles/aircraft, drivers, pilots, package handlers, terminals/hubs) to take over a substantial fraction of UPS volume on a few days’ notice. And they won’t scale up ahead of obvious opportunity because if UPS settles, they’ve got a ton of previous capital stranded and employees to fire with no associated business to pay for them.

The original post bemoaned the fact that the economy has become too concentrated to a handful of companies and is too protective of large corporations.

I took this to mean that capitalism would better work as intended if UPS was not allowed to grow to be as big as they are. They would then be a regional player themselves, one of many, and it would be easier for one or more other similarly sized companies to take over their business if they drop the ball. There would be a real competitive market.

The scenario you mentioned is the current state of affairs, where such a large company cannot be replaced, and can hold the economy hostage.

1. Do you have any idea what is the latency for a such operation? This is real world, not computers. Imagine AWS engineers going on strike to give you an idea of how hard would it be to build a competitor from scratch. IRL clients will try to migrate to big existing players like FedEx, but you can’t build warehouses and a truck/railroad fleet overnight. This is a new “let them eat cake”. Why don’t peasants just make a startup that will make more food? Right? 2. “This is not real capitalism” — this is the convergence I did not expect to happen.

When government cares about corporation shareholders well-being more than their own people that happens.

Do you measure strength in money or resilience?

Those are metaphors. Hard, but brittle like over heat-treated steel might be a better metaphor. US makes it workers work very hard, but it will explode if too many workers will refuse to put up with the pressure.

Or, more reasonably, CNN is just a garbage news source.

The economy is already devastated if it relies on a separate class of owners and workers. With the workers never protesting too much.

Labor disputes and working with those things is a net positive for the economy and most people. Most people are not filthy rich.

Can someone explain why Airline pilots are allowed to go on strike, pretty much at will, without government intervention, but railroad workers, who are paid a tiny fraction of pilots, are forced back to work? I expect the UPS drivers will be forced back to work just like the railroad workers.

You want the government to force private employees to work? UPS is not USPS.

Neither are railroads. Freight railroads, not just Amtrak.

US have four railway companies from what i understood a few month ago. Is one of them state-operated?

Because we outlawed railroad strikes but didn't outlaw airline strikes.

Doesn't really prevent a strike though: it just makes it cost more. Here in Massachusetts it's illegal for public school teachers to strike, yet it has happened a couple times in the last year. In one case the teacher's union was fined: https://www.bostonherald.com/2023/02/08/woburn-teachers-turn...

Railroad strikes are not outlawed. They are probably more regulated than other strikes in some ways, as there are certain things they can't strike for, and certain times they can't strike. But when they do strike, they have more leeway too, like they can solidarity strike which is illegal under NLRA.

The most recent attempt at a railroad strike was stopped by Congress imposing management's contract. But that's not a general prohibition against striking.

It's not a general prohibition but what message does it send? "You can't strike because we'll just force you back because we care more about your bosses and Americans getting their cheap shit from China for Christmas presents than we do about you" seems to be the message.

I think a reason Congress is willing to impose a contract on railroad workers is that they genuinely can make a credible threat against the broader economy in a way that airline pilots can't. Just to name a single sector, a railroad strike could jeopardize around 70% of coal electrical production, which makes up 20% of electrical generation in the country. While industrial action by pilots would be devastating for a few industries, the railroads really could hurt large portions of the entire economy.

I tend to think UPS is a lot more like pilots than railroad workers, especially since there are alternatives if you really do need to ship something right away.

Why do the government target the workers? And not the owners of these companies?

Why can't they just tell that they will nationalize them if they don't agree to demands. If they don't and allow strike to happen. Just take over the private ownership resetting both equity and bond holders and give the gains to workers...

The owners of these companies are also the owners of this country.

Do you think the Democratic or Republican candidate gets the nomination and wins the presidency because they do what the people want? They get that nomination and win the presidency because they convince a small constellation of large companies to buy election advertising on their behalf in order to influence the outcome of the election for the candidate that each company in that constellation feels would serve their interests best.

So of course the House of Reps, Senate, and President are all going to support the biggest corporations - they don't want to spend their own money campaigning and they don't want to go back to a life where they don't have influence and aren't wined and dined for things.

This is incorrect. Airline pilots also fall under the Railway Labor Act and require federal mediation before authorizing a strike vote. In the past the Feds have usually allowed strikes, but not always. https://simpleflying.com/airline-labor-negotiations-guide/

Who writes “An UPS?”

This is an affront to sub-vocalization!

Obviously an young journalist does.

Remember that package delivery peaks in December before Christmas--yet the package industry can handle this peak. So let's say December volume is 100x units of which UPS handles 40x--leaving the rest of the industry handling 60x units. And normal August volume is 60x units. Thus the rest of industry can handle this (with overtime, part-time workers...). And business will do things like consolidate orders [ever order a half dozen things from Walmart and it comes in more than one package (from different distribution centers)].

Corporations can now win lawsuits against labor unions for economic damages. So, expect this propaganda to lead to the destruction of UPS's union following another lawsuit.

UPS Management got one of the largest IPOs of the 90s, and have blundered and failed repeatedly at the promised international expansion. Meanwhile Amazon went ruthless, and other large package delivery companies were efficient. UPS is looking more like Detroit and less like New York City right now. Taking the difference out of the skins of workers is probably in line with the current strategy there.

Did the 1997 UPS strike devastate the economy?

No, but package delivery is a much larger part of the economy today than it was 26 years ago. Many more businesses today depend upon UPS for delivery of parts.

I also wonder how much of ‘just in time’ / lean adoptions over the last 26 years might also play a part in potential negative effects.

>package delivery is a much larger part of the economy today than it was 26 years ago

In this "age of big data", is there a way to quantify it? Ideally, it would be interesting to see the inflation adjusted package carrier revenue per capita for the past 30 years or so in the U.S..

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