UPS and the International Brotherhood of Teamsters, a union representing about 330,000 UPS employees in the US, have reached a tentative collective bargaining agreement, reports ABC News.

Contract negotiations between UPS and the Teamsters restarted on Tuesday after breaking down earlier this month. The two sides faced a July 31 deadline, at which point the Teamsters had vowed to strike before employees' contract was set to expire on August 1.

Instead, UPS and the Teamsters struck a five-year tentative agreement that raises wages for all workers, creates additional full-time jobs and imposes dozens of workplace protections and improvements, the Teamsters said in a statement.

"Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits," Teamsters General President Sean O'Brien said in a statement.

"Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers," Carol Tome, UPS CEO, said in a statement.

Under the terms of the deal, existing full- and part-time UPS Teamsters will get US$2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, the union said. Meanwhile, existing part-timers will see their pay raised immediately up to no less than $21 per hour.

Wage increases for full-time workers will keep UPS Teamsters as the highest-paid delivery drivers in the nation, improving their average top rate to $49 per hour, the union added.

In addition, the deal codifies a previous commitment made by UPS to equip in-cab A/C in all larger delivery vehicles, sprinter vans, and package cars purchased after the outset of 2024, the union said.

The tentative agreement would also grant all Teamsters-represented UPS workers with a day off on Martin Luther King Jr Day - a key demand that the union had raised in contract negotiations.