A UPS truck makes deliveries in Northbrook, Ill., May 10. UPS and the International Brotherhood of Teamsters, the union representing about 330,000 UPS employees in the U.S., on Tuesday reached a tentative collective bargaining agreement.

UPS reached a tentative contract agreement with its 330,000-person strong union Tuesday, averting a strike that had the potential to disrupt logistics nationwide for businesses and households alike.

The Teamsters called the tentative agreement “historic” and “overwhelmingly lucrative.” The contract includes higher wages for all workers, creates more full-time jobs, safety and health protections like air-conditioned vehicles, and includes dozes of workplace protections and improvements, according to a press release from the Teamsters.

This victory sets the bar for other labor negotiations, said Scott Sexton, a 39-year UPS employee, union leader and business agent who represents Teamsters Local 767, which includes Tyler, Longview, Sulphur Springs and Sherman.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” UPS CEO Carol Tomé said in a statement. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

The company said the five-year agreement covers U.S. Teamsters-represented employees in small-package roles and “is subject to voting and ratification by union members.”

“Nothing is final until the members ratify it,” Sexton said. “The ballots will be mailed to them. They will mark their ballot and send it back to be counted. The last time we had a vote, in 2018, the contract failed. It was defeated. At the end of the day, the members are the ones who will decide whether or not this is a good deal and whether their objectives were reached.”

The negotiations have been back and forth ahead of the current contract’s expiration, which is July 31. While talks were ongoing, unionized workers across the country took part in “practice pickets” to send the message that workers were prepared to strike if it came to that, Sexton said. Longview was the first city in the nation to hold the practice pickets and the Tyler facility followed suit the next week.

“UPS came dangerously close to putting itself on strike, but we kept firm on our demands. In my more than 40 years in Louisville representing members at Worldport — the largest UPS hub in the country — I have never seen a national contract that levels the playing field for workers so dramatically as this one. The agreement puts more money in our members’ pockets and establishes a full range of new protections for them on the job,” Teamsters General Secretary-Treasurer Fred Zuckerman said in a press release. “We stayed focused on our members and fought like hell to get everything that full-time and part-time UPS Teamsters deserve.”

According to the Teamsters, the tentative 2023-2028 agreement would allow existing full- and part-time UPS Teamsters to get $2.75 more per hour in 2023 and $7.50 more per hour over the length of the contract. Existing part-timers will be raised up to no less than $21 per hour immediately, and part-time seniority workers earning more under a market rate adjustment would still receive all new general wage increases. New part-time hires at UPS would start at $21 per hour and advance to $23 per hour.

Wage increases for full-timers will keep UPS union workers the highest paid delivery drivers in the nation, improving their average top rate to $49 per hour, the union said. Current Teamsters working part-time would receive longevity wage increases of up to $1.50 per hour on top of new hourly raises, compounding their earnings.

Another highlight of the tentative agreement is all Teamsters would receive Martin Luther King Day as a full holiday for the first time.

Additionally, there would be no forced overtime on drivers’ days off.

Members of the Teamsters, angered by a contract they say was forced on them five years ago by union leadership, clashed with UPS over pay as profits for the delivery company soared in recent years.

Union leadership was upended last year with the election of Sean O’Brien, a vocal critic of the union president who signed off on that contract, James Hoffa, the son of the famous Teamsters firebrand.

The two sides reached a tentative agreement early on safety issues, including equipping more trucks with air conditioning equipment. Under the agreement, UPS said it would add air conditioning to U.S. small delivery vehicles purchased after Jan. 1, 2024.

But a two-tier wage system remained a sticking point. The Teamsters called it “unfair,” which ended under the new agreement.

Profits at UPS have grown more than 140% since the last contract was signed, as the arrival of a deadly pandemic drastically transformed how households get what they need.

Unionized workers argued that they shouldered growth at the Atlanta company and appeared dead set on righting what they saw as a bad contract.

“Unless the company’s losing money, every contract you have will be richer than the one before, especially if it’s a growing company,” Sexton said. “The percent of profit the company has made over the last few years, certainly over the last five years during this current contract, has been historic. It’s been a lucrative five years for the company. So yes, I would expect it to be a lucrative contract for the employees.”

Member voting begins Aug. 3 and concludes Aug. 22.

UPS has the largest private-sector contract with workers in North America, and the last breakdown in labor talks a quarter century ago led to a 15-day walkout by 185,000 workers that crippled the company.