Wall Street may be ignoring the continuing labor negotiations between the United Parcel Service (NYSE:UPS) and the Teamsters, but investors should keep a very close eye on these negotiations as they unfold. There remain 12 supplemental contracts still to be voted on, and if they can't come to an agreement, the national contract will not go into effect. Further, if these contracts don't pass after a third vote, it could lead to a strike in those specific locations.
The key area Investors need to watch is the union representing Local 89, the UPS Worldport location in Louisville, Ky. -- the largest automated packaging facility in the world. It has voted overwhelmingly against the contract in previous votes, and its local air supplement contract for the Worldport package hub is still outstanding for renegotiation and a second vote. Due to the importance of Worldport in UPS' daily operations, it gives Local 89 significant bargaining power.
In the video below, Motley Fool analyst Blake Bos updates investors on the latest round of voting and what implications future voting could have for the company at large. Investors in Fed Ex (NYSE:FDX) should pay particular attention to these events, as any service disruptions at UPS would be great news for FedEx.
Blake Bos has no position in any stocks mentioned. The Motley Fool recommends FedEx and United Parcel Service. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.