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Diesel Fuel Costs Hurting Shiney Wheels
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<blockquote data-quote="wkmac" data-source="post: 309498" data-attributes="member: 2189"><p>Scratch,</p><p> </p><p>You are correct that we can pass on fuel surcharges and Brett made a good point that at some point things will turn around so to speak and everyone is happy again. In other words, fuel will go down (not likely in the sense we'd like to see it) or business models will balance out with reality (more likely scenario) and we move forward. A humorous case in point was that I hit the lottery yesterday. Yep, finally did it after all these years of trying. How you ask? I paid $2.99 a gallon for gas! Felt like I had hit the lottery!</p><p><img src="/community/styles/default/xenforo/smilies/FeltTip/happy-very.png" class="smilie" loading="lazy" alt=":happy-very:" title="Happy Very :happy-very:" data-shortname=":happy-very:" /></p><p> </p><p>But here is a good/bad scenario for real that time will see how it proves out. The bad for right now. We live in a world where things aren't "homegrown" anymore and geographic areas have positioned themselves to be specialized in specific areas. With our national and even global transportation system what it is, we can have products from around the world in a few days and in some cases the next day. Even in critical cases, within hours. Cheap transport costs have played a factor where the business world has moved from local or region mass storage and distributiion to single point centralized distribution as the cost of multiple points of warehouse/distribution exceeded shipping/fuel costs from a central point. When I came to work for UPS in 81' this was not the case and it was ironic that in hard times UPS seemed to thrive as the business world reduced inventory and shipped more on a "as needed" basis. This may have been the brainspark to what we see today but I'll let others more expert in that take that question on.</p><p> </p><p>Where I am concerned has to do if fuel stays it's course and we start to see a reverse of centralized warehouse/mass transport begin to be more costly than regional or localized warehousing and the shift begins to reverse course of what we've seen the last 20 plus years. Now this would begin to effect our business model at UPS but to exactly what effect I can't tell because it would depend on how we answer to it. Let's be clear, there is nothing I've seen to suggest this retrack is taking place as the vast majority of people believe as Brett that everything will in the end balance out and I think Brett is probably right in the end. </p><p> </p><p>However, I like contarian thinking and considering their potentials so I ask, what happens in our UPS world if fuel costs continue to rise and this transport cost outweighs local/regional raw production, manufacture and distribution of goods and product? What happens if Acme Widgets realizes instead of 1 single production point and using UPS to deliver across the country, they return to the old model of regional production points with their own transportation to local retail points which in the case of UPS would seem to effect the Hundred Weight or bulk shipment the most?</p><p> </p><p>Saw the article and thought it is a "Current Event" issue but it "could" have potential ramifications to us as UPSers as well. From the standpoint of our business, should we concur with Brett and not worry at all so to speak or should we look at what business might rethink going down the road if this continues?</p></blockquote><p></p>
[QUOTE="wkmac, post: 309498, member: 2189"] Scratch, You are correct that we can pass on fuel surcharges and Brett made a good point that at some point things will turn around so to speak and everyone is happy again. In other words, fuel will go down (not likely in the sense we'd like to see it) or business models will balance out with reality (more likely scenario) and we move forward. A humorous case in point was that I hit the lottery yesterday. Yep, finally did it after all these years of trying. How you ask? I paid $2.99 a gallon for gas! Felt like I had hit the lottery! :happy-very: But here is a good/bad scenario for real that time will see how it proves out. The bad for right now. We live in a world where things aren't "homegrown" anymore and geographic areas have positioned themselves to be specialized in specific areas. With our national and even global transportation system what it is, we can have products from around the world in a few days and in some cases the next day. Even in critical cases, within hours. Cheap transport costs have played a factor where the business world has moved from local or region mass storage and distributiion to single point centralized distribution as the cost of multiple points of warehouse/distribution exceeded shipping/fuel costs from a central point. When I came to work for UPS in 81' this was not the case and it was ironic that in hard times UPS seemed to thrive as the business world reduced inventory and shipped more on a "as needed" basis. This may have been the brainspark to what we see today but I'll let others more expert in that take that question on. Where I am concerned has to do if fuel stays it's course and we start to see a reverse of centralized warehouse/mass transport begin to be more costly than regional or localized warehousing and the shift begins to reverse course of what we've seen the last 20 plus years. Now this would begin to effect our business model at UPS but to exactly what effect I can't tell because it would depend on how we answer to it. Let's be clear, there is nothing I've seen to suggest this retrack is taking place as the vast majority of people believe as Brett that everything will in the end balance out and I think Brett is probably right in the end. However, I like contarian thinking and considering their potentials so I ask, what happens in our UPS world if fuel costs continue to rise and this transport cost outweighs local/regional raw production, manufacture and distribution of goods and product? What happens if Acme Widgets realizes instead of 1 single production point and using UPS to deliver across the country, they return to the old model of regional production points with their own transportation to local retail points which in the case of UPS would seem to effect the Hundred Weight or bulk shipment the most? Saw the article and thought it is a "Current Event" issue but it "could" have potential ramifications to us as UPSers as well. From the standpoint of our business, should we concur with Brett and not worry at all so to speak or should we look at what business might rethink going down the road if this continues? [/QUOTE]
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