An interesting side note regarding UPS SurePost is the significance the product played during recent UPS/Teamsters contract talks. Since UPS SurePost packages are aggregated and inducted for USPS postal carrier delivery, Teamster negotiators view SurePost with extreme caution since it could have a negative impact on union labor. Simply put, it takes packages away from Union drivers and puts those packages in the hands of USPS postal carriers. As a result, the final master labor contract places several important restrictions on UPS SmartPost.

1. Surepost will not be presented as a general service offering, but rather it will be offered to existing commercial customers that ship from a business to a residential customer, and only when solicited by a competitor offering services similar to SurePost and/or to attract new commercial customers. UPS agrees to discontinue the product in the event its competitors did so as well. 

2. Packages eligible for such delivery will normally be less than ten pounds in weight and less than three cubic feet in size. Within 120 days of the effective date of the new contract, the Company shall also develop technology that identifies oversized (greater than three cubic feet) or overweight packages. Once such technology is operational, all Surepost packages exceeding ten pounds or with dimensions greater than three cubic feet, will be delivered by UPS package drivers.

3. UPS must continue to use and develop technology that identifies two or more Surepost packages to be delivered to the same address and/or any combination of Surepost package/s and ground package/s to be delivered to the same address. In such circumstances, all of the Surepost package/s and ground package/s will be delivered by UPS package drivers. In addition, UPS will develop and implement technology that identifies multiple addresses in close proximity to which any combination of Surepost and ground packages are to be delivered. 

4. A Joint UPS/Teamsters Competition Committee will meet on a quarterly basis to review the progress of the SurePost progress and discuss potential technological enhancements that will allow Surepost volume to be placed back in the UPS system for final mile delivery. 

5. Finally, in the event of a dispute, should an arbitrator determine that UPS expanded SurePost beyond the scope of the new contract without first obtaining the consent of the Union, the arbitrator has the authority to fashion a remedy based on the nature and extent of the violation, including issuing a cease and desist order that requires UPS to terminate the expanded service.