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Contingency Plans Required

Posted by Mark Fallon on Jun 18, 2018 7:30:00 PM

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“First ask yourself: What is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst.” – Dale Carnegie

In the Summer of 1997, I was the Assistant Vice President of Mail Services at State Street Corporation in Boston. My team was responsible for inbound and outbound mail for the Greater Boston area. That included shipping out hundreds of overnight packages each day – the bulk of those were handed off to United Parcel Service (UPS).

When the stock market closed, the mainframe system would produce tens of thousands of pages of reports. Secure internet delivery of these documents wasn’t possible in 1997, so the reports were collated, packaged and shipped to our clients. The system would print out labels for the UPS overnight packages, and the last pick-up was at 7:00PM.

We also maintained contracts with other carriers. For international shipments, the company used DHL. Local and regional packages went through Eastern Connection – a Boston-based carrier.

UPS and their drivers, members of the International Brotherhood of Teamsters (Teamsters) union, were negotiating a new contract. At one point, the drivers voted to authorize a strike if their demands weren’t met. Our UPS contact reassured us that this was a normal tactic, and that they expected a new contract to be signed, and that a strike would be averted. I also spoke with the UPS drivers, and they agreed that a strike was unlikely.

Unlikely didn’t mean “impossible”. I reached out to DHL, Eastern Connection and the US Postal Service. We had frank conversations of what might happen, and each vendor explained how much additional volume they could handle if a strike occurred. They sent us additional envelopes and labels to get through several days of shipping.

On Friday, August 1, 1997, State Street’s Executive Vice President of Corporate Real Estate called me and my boss into his office. The UPS-Teamsters contract expired that weekend. The executive wanted to know my prediction on what would happen. I explained that I thought a strike would be averted, but that I had a contingency plan in case the talks failed.

On Saturday morning, Ron Carey, the President of the Teamsters, announced on national television that the talks had broken down, and that strike would begin on Monday, August 4.

My hopes about the strike were wrong. However, there wasn’t time for second-guessing, it was time for action. I activated our call-tree, having all available managers come into the office on Saturday afternoon. We reviewed our staffing, determined how many temporary employees we’d need, and reached out to our contracting agency. We then drafted an email to our shipping partners and planned multiple check-ins each day for the next week.

With our contingency plan activated, I drafted an email to my boss and the Executive Vice President. Then an email to our major internal customers. We arrived early Monday morning, ready to attack the problem. For the next 15 days, our team worked diligently, exceeding expectations under difficult circumstances. The contingency plans worked.

21 years later, UPS and the Teamsters are negotiating a new contract. On June 5, 2018, the Teamsters voted to authorize a strike if the union’s demands aren’t met. As people post the story on Twitter, UPS is quick to respond: “The current contract remains in force, so it’s business as usual while negotiations continue.”

A strike could be damaging not only for UPS, but for the entire economy. Industry professionals are hoping that common ground is reached, and a walkout is averted.

The not-so-distant past demonstrates that “hope” isn’t enough. Shippers must review their contingency plans. Have discussions with alternative shipping companies. Test systems, staffing and communication plans.

The best time to start your contingency planning was when you signed your shipping contract. The second-best time is now.


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Operations Management / United States Postal Service

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