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<blockquote data-quote="randomUPSISer" data-source="post: 637509" data-attributes="member: 24399"><p>We raise our rates because its profitable to. FedEx is better because of it, and UPS is better because of it. To not raise our rates suggest to FedEx we are interested in competing on price. Competing on price tends to lead to a "price war".</p><p></p><p>The <strong>absolute last </strong> thing we want is a price war in the transportation business. We are absolutely <strong>not </strong> the "low cost producer" in transportation so the eventual result of a price war is we lose. We arent the low cost producer partly due to the teamsters, and partly due to the ridiculous amount of redundant management who do nothing but ask their boss for permission to do things. </p><p></p><p>FedEx raises its rates, so UPS raises its too. If we kept our rates where they are FedEx would simply lower its rates back to where they were. We wouldn't get much/any extra business from it because FedEx would lower right back to where they were. </p><p></p><p>So the choice really boils down to "get more profit" (by raising rates) or "keep existing profit" (by leaving our rates alone)</p><p></p><p>If you were leading UPS, which would you choose?</p></blockquote><p></p>
[QUOTE="randomUPSISer, post: 637509, member: 24399"] We raise our rates because its profitable to. FedEx is better because of it, and UPS is better because of it. To not raise our rates suggest to FedEx we are interested in competing on price. Competing on price tends to lead to a "price war". The [B]absolute last [/B] thing we want is a price war in the transportation business. We are absolutely [B]not [/B] the "low cost producer" in transportation so the eventual result of a price war is we lose. We arent the low cost producer partly due to the teamsters, and partly due to the ridiculous amount of redundant management who do nothing but ask their boss for permission to do things. FedEx raises its rates, so UPS raises its too. If we kept our rates where they are FedEx would simply lower its rates back to where they were. We wouldn't get much/any extra business from it because FedEx would lower right back to where they were. So the choice really boils down to "get more profit" (by raising rates) or "keep existing profit" (by leaving our rates alone) If you were leading UPS, which would you choose? [/QUOTE]
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