Federal Mediator Calls for Recess In UPS Pilot Talks

In the NMB's notification to the parties, the negotiations havebeen placed in an indefinite recess as of December 23, 2005. Althoughno future mediation sessions have been scheduled at this time, themediator indicates both sides should "re-evaluate negotiatingpositions with respect to the remaining issues and prepare to bringthe negotiations to a successful conclusion."

There can be no strike or work stoppage while the parties are inrecess. UPS pilots are legally obligated under the Railway Labor Actto continue working under the existing contract during any recess.

A recess often is a normal part of the mediation process, allowingthe company and the union time to evaluate their positions. It doesnot prohibit the two parties from continuing to talk.

"We made progress during talks this week," said Bob Lekites, vicepresident of UPS airlines and international operations. "While thecompany and the union still have differences to address, UPS remainscommitted to continue negotiations until an agreement can be reached."

The main contract items still on the table are compensation andbenefits. UPS pilots already are among the highest paid in theindustry, earning an average of $175,000 a year.

UPS continues to believe the federally prescribed negotiatingprocess will result in a contract that best serves the interests ofits employees, customers and shareholders.

Moving forward, the federal mediator will continue to control thetiming and pace of negotiations. "The company remains ready andwilling to meet at any time or place specified by the federalmediator," added Lekites.

This is the second recess since the company and the union begantalks under the auspices of a federal mediator. The previous recesswas called in June 2005. While that recess lasted three months, thereis no prescribed time period for a recess.

UPS Airlines is the world's ninth largest airline. UPS is theworld's largest package delivery company and a global leader in supplychain services, offering an extensive range of options forsynchronizing the movement of goods, information and funds.Headquartered in Atlanta, Ga., UPS serves more than 200 countries andterritories worldwide. UPS stock trades on the New York Stock Exchange(UPS), and the company can be found on the Web at UPS.com.