August 2023 Business news You Can Use

August 2023 Business News You Can Use

UPS-Teamsters Contract Ratified

Key Point: UPS employees and customers alike celebrated the ratification of a new Teamsters Union/UPS labor agreement. 86.3 percent of the more than 300,000 UPS employees voted in favor of the negotiated five-year deal.

Covered UPS workers get a wishlist that includes a $2.75 per hour pay hike, reduced mail volume (more will be outsourced to the USPS), and more say-do about the technology used by UPS. Meanwhile, the company is scurrying to regain volume lost during the negotiation period.

Here’s how the Teamsters Union president sees the new contract: “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.”

Those words could be ominous. The latest New York Federal Reserve employment survey found that the average minimum acceptable salary that would entice workers surveyed to switch jobs is now at the highest level ever

Yellow Corp. Has Entered Bankruptcy

Key Point: UPS settled with the Teamsters, but after 100 years of service, the fifth largest trucking company in the United States, Yellow Corp., is declaring bankruptcy. In a classic case of finger-pointing, the Teamsters Union blames the company, and the company blames the Union. Caught in the middle are the almost 30,000 displaced Yellow Corp. workers.

The failure isn’t a surprise to those who have watched Yellow struggle to produce a positive return on investment over the years. Nor does it seem to surprise the union that represented the lion’s share of workers. 

The Teamsters president had this to say:

“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government. This is a sad day for workers and the American freight industry.

As to the effect on shippers, the LTL (less-than-truckload) services Yellow Corp. provided will be absorbed by other carriers and shouldn’t have a noticeable impact on deliveries. Yellow Corp. launched in 1948 and grew to nationwide status, but it may be an excellent example of how charging the lowest price isn’t always the best idea.”

How America’s Biggest Retailers Plan to Use Technology to Catch Organized Retail Theft

Key Point: Walmart, Home Depot, and Walgreens have something in common: They are all concerned about the pattern of shoplifting cases in their stores. Rather than needing to watch for thieves working alone, retailers have seen a dramatic increase in organized theft carried out by groups of criminals.

Target funded the Loss Prevention Research Center at the University of Florida over two decades ago to test anti-theft technology. But with the rise in the availability of artificial intelligence solutions, and there may be help on the way. Anti-theft tools include robots, face recognition, predictive analytics, and more — all now enhanced with AI. 

The aim is not just to catch thieves in the act, but to prevent them from thinking the store is an easy mark in the first place. “Thieves want the easiest job possible,” said one retail tech expert. “If your store has some basic security protocols, they move on to a store that hasn’t been hardened.” Thieves today are taking a bigger dent out of retailer profits, have become bolder in their exploits, and are becoming increasingly violent. Artificial intelligence combined with anti-theft technology may be the trump card for retailers. Assuming, of course, they get backing from the criminal justice system.

For a deep dive into the situation, check this article.

Macy’s Warning Signs Ahead

Key Point: Macy’s shoppers scooped up bargain prices when the chain had to radically discount spring stock to make room for fall and holiday goods this year. Reasons cited include consumer uncertainty over the economy, and a rise in credit card delinquencies.

Here’s what Macy’s CEO said at a recent earnings call: “As we plan the remainder of the year and we think about 2024, we remain cautious about the pressures impacting our customers, especially at Macy’s, where roughly 50% of the identified customers have an average household income of $75,000 or under.”

Consumer discretionary spending is down, interest rates are rising, and inflation is a widespread concern. Home Depot says its sales are declining, but Walmart’s revenue is growing. Therein lies a pretty good picture of consumer concerns. 

The good news for retailers is that the holiday shopping season is just around the corner. All eyes are on Black Friday and the hope that a brighter economic outlook is coming soon to a store (and a wallet) near you.


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