He looks a bit helpless, the robot delivery person for the Serve company, as he waits on the sidewalk to finally be emptied. He’s transported food from a restaurant in West Hollywood a little more than a mile to a house off Sunset Boulevard – and now he’s patiently waiting for the recipient. You look at it and think: Okay, it works quite well on short distances, this could be an environmentally friendly and traffic-calming option for the so-called last mile for deliveries. But you can immediately see the limitations: there isn’t much that can fit into the robot, which is why medication, ordered food or small items from supermarkets are currently delivered this way. And of course the recipient must be at home. And in this case he has to walk from the fourth floor apartment down to the sidewalk. The cuddly robot isn’t likely to deliver large packages any time soon.
This leads to a collective bargaining dispute in the USA, which has shown that people are not as replaceable as is often said at the moment. Quite the opposite. He is irreplaceable for the logistics industry and that has consequences: parcel drivers for the delivery giant UPS will be able to earn up to $170,000 per year in the future – and can also count on amenities such as air-conditioned trucks. By 2027, no one, including part-time workers, should earn less than $25.75 an hour. Every employee receives health insurance and social benefits, and there are higher bonuses on public holidays. UPS generated sales of more than $100 billion in 2022 for the first time in its history; the profit was more than 13 billion.
“The messages were louder than we expected,” said UPS boss Carol Tomé: “However, I believe that all sides can now be satisfied.”
UPS estimates that six percent of U.S. gross domestic product is handled by its employees
Americans are currently often talking about the “summer of strikes” because there are disputes in many industries. It’s about money, of course, but – across all industries – it’s also about the question of how important people still are, how irreplaceable what they do is. In Hollywood, authors fear that producers will increasingly rely on scripts written by artificial intelligence. Actors fear that their image will be copied into several projects and, in particular, supporting actors will no longer be needed. There is also currently a strike in the auto industry: One of the issues there is how many people are still needed in the factories given the advances in production and automation technology – and how they should be paid. When it comes to ride-hailing services like Lyft and Uber, the question that has always been raised when arguing with drivers is: How long will they be needed when it is said that self-driving taxis are only a matter of time?
The message from the logistics industry’s tariff dispute is now: The parcel drivers cannot be replaced and there are reasons for this. It’s the last milee, which continues to cause headaches for the industry – mainly because customers refuse to take it on themselves. The Covid pandemic has conditioned people to have everything delivered straight to their doorstep, often at unbelievable speed. In 2000, US Postal Service, the largest package delivery company in the United States, handling 2.4 billion packages; In 2022 it was 7.2 billion. Amazon is in third place with five billion packages. UPS is in between with 5.2 billion packages. The company estimates that six percent of the US gross domestic product is processed by its employees.
The problem for the parcel companies: It is unlikely to be possible to change the habits of customers; the fierce competition between the top dogs UPS, FedEx, Amazon and US Postal Service makes an increase in delivery fees for customers de facto unrealistic . Incidentally, that was also the reason for the drivers’ excellent negotiating position. According to experts, a strike would have had devastating consequences for UPS. The prospect of this alone caused customers to migrate to competitors, including both large companies and smaller regional suppliers. In the last quarter of 2023, UPS processed ten percent fewer packages and sales fell by seven percent. That was the volume of the message that boss Tomé spoke about: “We heard it, loud and clear.”
A strike at UPS would have been the largest in history for a US retailer, with 340,000 drivers stopping work. The dispute alone caused massive damage to UPS’s image; since the Covid pandemic, parcel drivers in the USA have been seen as heroes who have brought people the essentials. There were therefore also UPS drivers who voted against the new contract; José Negrete from Anaheim, California, for example: “Nothing in the new contract shows what we did for this company in 2020. The momentum was on our side.”
And that’s true. There is currently no realistic option for delivering packages to customers’ homes other than having a human take them there. The message is clear: people are still irreplaceable.