I'll admit, it's always easier in hindsight of what should have been done. Maybe we weren't capable of it at the time. But, the best way to have handled a national competitor who was just starting would be to remove the very profitable pkgs away from them.
What I mean is that way back, (thru the late 80's or early 90's) we had one rate chart. It didn't matter if the shipper shipped tens of thousands of pkgs to commerical addresses that received lots of pkgs or if they shipped a pkg a day to a residential address in the boonies. The leaders of RPS, knew that the larger shippers, shipping to commercial addresses were very profitable to UPS. They were able to go in and give a large discount to those shippers and win volume from UPS. If UPS had reacted back then and implemented new pricing structures that reflected our cost + x% (roughly 10 %) for all types of packages, we could have made it virtually impossible for a new company to offer very large discounts to win volume away from us. Granted, there can always be small companies (couriers) doing very short distance moves that could exist (and do now). They wouldn't be a competitor like FDX ground is now.
As far as FDX air, the way to compete with them is to build an air network very very early in the game when they first came out. Make it so they couldn't build an infrastructure by offering low rates. (keep in mind, we already had a delivery network, we only needed to build the air network) and could have done it cheaper. But, back then, it was a very good chance they would not have suceeded.
