UPS says Teamsters deal will raise costs by 3.3%

United Parcel Service Inc.
UPS,
-0.09%
on Monday said it expects costs related to its deal with the Teamsters union to increase at a rate of 3.3% over the contract’s five-year lifespan. Chief Financial Officer Brian Newman, in a presentation, said that compound annual growth rate figure accounted for all contract provisions — like stronger wages and benefits — that affect operating costs, but that it did not include any impacts from productivity improvements over that time. But he said that UPS “retains flexibility to implement technology to further drive productivity inside our buildings,” with more opportunity to automate. The contract is effective from Aug. 1 of this year to July 31, 2028, UPS said.