A strike at shipping giant UPS appears to have been averted in the US, after the company reached a tentative deal with the union that represents much of its staff.

The union said the agreement would “set a new standard” for all delivery workers, granting raises, more full-time jobs and “dozens” of new workplace improvements and protections.

It also sets starting pay at $21 per hour for new part-time workers.

UPS called it a “win-win-win” deal.

UPS chief executive Carole Tomé said the agreement would continue to reward UPS staff with “industry-leading pay and benefits” while still allowing the company to stay competitive.

UPS has the biggest unionised workforce of any company in the US, with more than 300,000 full- and part-time workers – such as drivers – represented by the International Brotherhood of Teamsters union.

A strike could have been significantly disruptive to the economy in the US, where the company carries an estimated quarter of the parcels shipped each day.

The union had been holding practice strike pickets in recent weeks to push the company after talks broke off earlier this month. It will now present the proposed five-year contract to its members for approval.

Teamsters General President Sean M. O’Brien said UPS had agreed to spend $30bn (£23bn) more on workers as a result of union pressure.

“We demanded the best contract in the history of UPS, and we got it,” he said. “This contract sets a new standard in the labour movement and raises the bar for all workers.”

The union said existing full- and part-time members will get $2.75 more per hour in 2023, and $7.50 more per hour over the five years of the contract.

It said pay for part-time workers – which had been a sticking point in the negotiations – would rise 48% on average for existing staff by 2028.

The company will also recognise Martin Luther King Jr Day in January as a holiday for the first time and stop requiring drivers to work overtime on days they are scheduled to have off, according to the union.

The union said UPS had also committed to ensuring air conditioning in all larger delivery vehicles, sprinter vans, and package cars purchased after 1 Jan 2024.

Lennox James has worked part-time for the company for almost 16 years and said he earned about $20 (£15) an hour. He said he planned to review the terms of the proposed contract more carefully but at first glance, it seemed “positive”.

The 51-year-old said it made him more hopeful that he might eventually move into a full-time position.

Mr James, who is a leader of the Brooklyn chapter of Teamsters, added that he was gratified to see the union finally fight for workers like him.

“It’s been a long time coming,” he said, adding “It’s never too late.”