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Reuters reports that UPS has started contract negotiations with its union, even though the current contract won’t expire before 2008. The International Brotherhood of Teamsters represents more than 250,000 of UPS’ workers. Of course this will mean higher shipping costs, the current contract, signed in 2002, has increased UPS’ costs. According to the company,

the average full- time delivery-truck driver’s wages and benefits would rise about 4 percent a year.

The union is bargaining for increases in health and retirement benefits and overtime pay, according to the article. While it may seem premature to begin talks, the contract negotiations in 1997 didn’t turn out very well, ending in a two-week strike that cost UPS$750 million in revenue. We all know which way DHL is hoping the talks go.