It is understood that the five-year contract between UPS and Teamsters Truck Drivers Association in the United States is about to expire at the end of this month (July 31). Previously, there were conflicts between the two parties regarding the new contract, which led to the union chairman issuing the strongest statement to date, threatening a strike unless the company raised wages and welfare conditions.

At present, the union has stated that UPS must propose better treatment before Friday to return to the negotiation table, otherwise it will face the risk of a strike on August 1st. With just over a month left until the deadline, if both parties fail to reach a consensus, there is a risk of UPS generating 24 million packages per day without being delivered, which may cause global logistics disruptions.

Earlier on Wednesday, United Parcel Service and the Truck Drivers' Union issued tit for tat statements as negotiations on a new labor contract worsened.

The truck drivers' union claims that UPS has abandoned negotiations on a new contract, clearly choosing the wrong path. However, UPS denied this claim and stated that the union has stopped negotiations despite the company proposing a industry-leading compensation plan. United Parcel Service (UPS. US) said in a media statement: "Refusing to negotiate, especially when the finish line is approaching, will cause serious unease for employees and customers, and may disrupt the US economy." Currently, UPS. US has fallen by more than 2% at the beginning of trading.

The strike will have a significant impact on UPS, including the US supply chain and the economy.

Jonathan Gold, Vice President of Supply Chain and Customs Policy of the National Retail Federation, stated that the strike will have a huge impact, just like the supply issues faced during the pandemic.

Firstly, customers may experience disruptions in the supply chain, resulting in the inability to receive goods, as seen during the pandemic.

Secondly, other related companies find it difficult to bear additional burdens, and other carriers find it difficult to fill the services that UPS cannot provide. This does not mean that one can immediately seek help from other companies, but rather may not be able to compensate for this lack of ability.

UPS delivers approximately 25 million packages every day in over 220 countries worldwide, accounting for approximately 26% of all package volumes in the United States. According to estimates, 6% of the United States' gross domestic product (the broadest economic measure) is transported by UPS trucks, including time sensitive goods provided to healthcare and other companies. Even if FedEx and USPS provide services, it is difficult to make up for the backlog of packages after the strike. If a strike occurs, it will have a significant impact on Amazon sellers.

Finally, there are other impacts, such as ships piling up in ports, which directly threaten the chaos of the supply chain.