(Reuters) -UPS has reached a tentative five-year labor deal with the Teamsters Union that represents about 340,000 U.S. workers at the parcel delivery firm, the company said, sending its shares up 2.3% on Tuesday.
The deal averts a strike that could have disrupted logistics across the country and comes against the backdrop of at least 800,000 U.S. workers in healthcare, manufacturing and transportation pushing for strike if their compensation is not improved.
"UPS has put $30 billion in new money on the table as a direct result of these negotiations," Teamsters General President Sean M. O'Brien said in a statement.
UPS said last week it was prepared to increase its industry-leading pay and benefits in an attempt to reach a deal before the contract expired at midnight on July 31 and prevent a strike that could send customers into the arms of rivals like FedEx.
A 10-day strike at UPS could have cost the U.S. economy more than $7 billion, a think tank specializing in the economic impact of labor actions said.
That figure from Michigan-based Anderson Economic Group (AEG) included UPS customer losses of $4 billion and lost direct wages of more than $1 billion.
UPS currently handles about 20 million packages a day - about quarter of the parcel shipments in the United States.
"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", UPS CEO Carol Tomé said.
The tentative contract deal must now be ratified by the workers.
(Reporting by Priyamvada C in Bengaluru; Editing by Shailesh Kuber)
