UPS vs. Fed-Ex

Discussion in 'UPS Discussions' started by browniehound, Jan 17, 2009.

  1. browniehound

    browniehound Well-Known Member

    We are in the middle of a very deep reccesion. There will be lay-offs at UPS I assume. I know as drivers we get paid top-dollar, but if UPS is going to suffer how do lesser delivery companies stay afloat?

    We work at least 5 times harder than any Fed-Ex driver and 10 times harder than any other courier or delivery service.

    Its funny to hear the Fed-Ex express or ground driver complain. The Fed-Ex driver's truck is always empty and the ground driver is half empty and is done by 3pm. I know he starts at 7 AM, but his truck is never full. He can walk through his truck every day. He can do back spins on his floor if he wanted to.

    I, along with almost every other UPS driver have trouble closing the doors on most days. I am busting out the back and front 4 out of 5 days a week.

    This begs a question I am very curious about. I wll limit the business to 1 route. A route for Fed-Ex ground and a route for UPS. The Fed-Ex ground can make money with a truck of 180 parcels and covers the area of 4 UPS routes. Then we have my route (an example for UPS) that delivers a minimum of 325 parcels and covers 1/4 of the Fed-Ex driver. How are we not VERY profitable?

    Add to this that we deliver our airs while Fed-Ex uses 2 vehicle. That means 2 insurances, 2 drivers, 2 fuels, etc.

    This example permeates the delivery world where I work. For a couple of dollars/hour more we do 4 times more than any Fed-Ex ground driver at the very least!

    We have to answer to our sup. for a .1 drop in SPHOR while Fed-Ex is making money with a UPS planned day of 5 hours. How are they making any money?

    Seriously, look at the Fed-Ex ground truck and it can't be more than a planned 5 hour UPS day!

    I like to day-dream of my on-car sup. doing a 3-day OJS ride with a Fed-Ex ground driver. It would be a rude awakeing to him and a hilarious sight to see!

    My guess is they would be done by noon and both would be twitling their thumbs for 3 hours!

    It proves the point that UPS has their priorities in the right place. You can criticize management all you want but they are light-years ahead of Fed-Ex.

    One example would be mis-deliveries. I haven't had one in 3 years. EDD has a lot to do with it but so does area knowledge. Our Fed-Ex ground driver leaves packages at stops where the don't belong every day.

    He is a nice guy but he is horrible at reading labels. I hear it all day long on the business part of my route. "Have you seen the Fed-Ex guy? he left a package here that belongs down the street"

    My goodness is he bad! If would have had warning letters and suspensions if I performed the way he does.

    Again, very nice guy but a total idiot.
  2. Johney

    Johney Raise your hand if you think Upstate is a D-Bag

    Doesn't the Fed Ex ground driver have to pay his own fuel and insurance cost's and matinence?
  3. SmithBarney

    SmithBarney Well-Known Member

    FedEx Ground makes money off the Driver.. they get paid peanuts and have to pay for their vehicles, etc.. most I see around here are bulked out, and for what its worth FedEx Ground is Doing remarkably well.

    FedEx Express, is a truck of Overnight premium product(NDA in UPS terms)
    But as an example I deliver 175 pieces a day and even in the roughest
    math $40/each is about $7000 worth of shipping costs, but realistically most
    of the packages are over 10lbs, I only have 25 letters maybe. (and on average
    a letter costs $40 to ship overnight) So in reality I probably have closer to 10k in packages, 90% of which need to be off by 10:30.

    Having worked at UPS and Express, I know the difference in workload, the complaints
    you'll hear from Express drivers are of a different type, Yes we have less work, but in general we have to get it all done a lot sooner, when I was at UPS, I had 10-15NDA Stops(plus one bulk) and had to have it off by 1200(followed by 150 Ground Delivery's,) with a 10am leave building of the center, at FedEx I have 15-20(one bulk) deliver by 1030 with a 9:45-10 leave building.
    the big difference is when you see us at 1200 most of our delivery work is done for the day. And many express drivers end up taking 2 hour lunches before pickups, unless they are AM drivers in which case they go home when they are done.

    But in any case the complaints I've heard on either side are valid, although I get a kick
    out of it whenever my new coworkers(FedEx) say that I run one of the hardest routes.
    Its easier than the easiest at UPS.

    COSMOS Member

    Express is different everywhere... My route for example consists of about 350 pieces crammed into a Sprinter for about 75 stops, 200 miles. I average about 9.5 to 10 hours. By about 1400 I can get most of the freight on the shelves. We have some routes that brick out a W700 on a regular basis or have to come back to the station after 1030 to get the rest of their freight. As for expectations, the goal is 100% productivity. We get regular checkrides when the goal isn't being met to watch methods and make sure the stops/hour average is right. I have to admit however that my manager is very good at making the goals attainable. To get an idea of how much of the Air market FedEx has you should think about what your route would look like if you only had air packages. The local UPS center sends a P500 to the airport with NDA and 2day whereas FedEx sends 1 and a half semi-trailers. Not to say that FedEx Ground has anywhere near the volume as the UPS center but there is a lot of profit in Air freight.

    As for Ground I've witnessed some pretty pathetic methods but many drivers are really busy. One owner that I know has four routes and they're all dragging their bumpers when they leave and when they come back.

    I don't know about UPS but we've been really busy since November with the DHL debacle. Last year at this time volume was REALLY light and this year it feels like peak won't end. We'll see how long the rush lasts.
  5. stevetheupsguy

    stevetheupsguy sʇǝʌǝʇɥǝndsƃnʎ

    That's what we're feeling, as well, will peak ever end?:surprised:
  6. Monkey Butt

    Monkey Butt You can call me Chappy Staff Member

    I have seen/heard that FedEx Ground is by far the most profitable unit of the FedEx organization...exactly the opposite of UPS.
  7. stevetheupsguy

    stevetheupsguy sʇǝʌǝʇɥǝndsƃnʎ

    I think you're using the right bait, to keep this thread moving along.
  8. Mallrat

    Mallrat "Brown to the Bone"

    To get an idea of how much of the Air market FedEx has you should think about what your route would look like if you only had air packages. The local UPS center sends a P500 to the airport with NDA and 2day whereas FedEx sends 1 and a half semi-trailers.

    Wrong....That P500 only shuttles the NDX to the centers. Our 2day arrives with the ground in the trailers.
  9. pickup

    pickup Well-Known Member

    I believe (and someone correct me if I am wrong) that the Fed ex ground driver is classified as an independent contractor. That means he gets paid on a 1099 and is responsible for both sides of the fica contribution on his earnings (when you work for an employer he pays half and you pay half).No workman comp payments for fedex . Fed ex driver is responsible for maintenance, fuel ,etc. I wonder, there have been class action suits in some states that have resulted in rulings that the independent contractor model at fedex is illegal but these rulings have never resulted in any changes, or fines that I know of . ( in similar rulings, against other companies, where it has been determined that the employee was indeed an employee, sometimes the companies had to pay retroactive monies towards fica, workman's comp., unemployment (oh yeah, independent contractor can never get unemployment because it is considered contract work.) Its my opinion and many others that fedex fails the litmus test for independent contractor status in so many ways. Can anyone add some insight to this issue? What is going on in the courts.Since the teamsters supported obama , Will the labor department put an end to this independent contractor scam and make the fedex ex ground drivers employees(and hence be allowed to join a union)? Does anyone know which divisions and employees this independent contractor status applies to and which ones it doesn't?
  10. pkgdriver

    pkgdriver Member

    This example permeates the delivery world where I work. For a couple of dollars/hour more we do 4 times more than any Fed-Ex ground driver at the very least!

    The Fred EX Ground drivers in my area dont make anywhere near what a UPS driver does.
    Now 4 times the work is probably correct.
  11. barnyard

    barnyard KTM rider Staff Member

    In our area, the Fed Ex station receives a 45 ft trailer of air every day. Not sure how full it is, though. That station covers the same area that 5 or 6 UPS centers cover.

    Using my delivery area, the same Fed Ex Ex guy covers the same area that 6 UPS guys cover (might be 7). He runs that route in a Sprinter and most days he is right at 8 hours. If we were to take just the NDA, 2DA and 3DA off those 6-7 routes, it would still fill a P1000 and it would be very hard to complete in a 10 hour day.

    Also in my area, I see the FE ground guy delivering to my downtown area at 3-4 pm, while I am doing my metro. His delivery area is so large that he has to do all of his pick ups, on route. I do not see how he is making money. Even in nice weather, he never shuts his truck off.

    Some of the contractors must be having troubles, I am seeing alot of used ground trucks at a local truck dealer. I do believe that Fed Ex corp is making money on the ground system, but I suspect that the contractors are feeling the squeeze and would bet that we see a bunch of them fail.

    Talking to the guys in my area, it does sound like they are under pressure to get the work done, even as their delivery areas are growing to give their drivers enough work every day. The Express guy says that everyday, he has to decide what area he is going to miss commit time on and there are some areas that he NEVER makes commit on.

    It has been over a year since I have missed a commit time on an NDA (excepting stuff that comes in on late planes.) That is in spite of the fact that we lost our 'split commit' status (used to have 10:30 commit in town and noon outside city limits.)

    Interesting discussion.

  12. pretzel_man

    pretzel_man Well-Known Member

    With DHL going under we are back to just us and FedEx. Right now, FedEx has a huge cost advantage with their classification of ground drivers and contractors.

    Their cost per delivery is fixed, and the estimates are that it costs them about 50% to 60% to put on a driver as compared to UPS.

    Organizing their drivers is good for BOTH UPS and the Teamsters. (I argue that its especially good for the Teamsters)

    Their cost advantage has allowed them to win a large % of the DHL volume. (they are getting about 1/2 of the volume)

    We have better service and have a better cash flow position. It would be nice to see the playing field on the driver side brought to equality.

    I guess we will see.


    BLACKBOX Life is a Highway...

    UPS and FDX makes billions of dollars a year, plus whatever DHL made. If you add in other carriers you'll see there is lots of profits to be made. My opinion is that FDX must have an extra-ordinary amount of Government contracts. Yes, their trucks are'nt that full but you have to believe if they are running seprate ground and air facilitys so they must be doing something right to make as much as we do (or close to it).

    Frankly, competition is healthy for buisiness. Customers in my area love/hate FDX/UPS for all kinds of different reasons. Its a great rivalry and I glad to be part of it to tell you the truth.
  14. redshift1

    redshift1 New Member

    There are currently several law suits challenging the legality of driver classification by Fed Ex. If the courts rule in the drivers favor, which is the current trend, then Fed Ex faces substantial increases in labor costs. Also since Fed Ex has the larger slice of the air product pie they stand to lose more as customers transition from air to ground.
  15. MrFedEx

    MrFedEx Engorged Member

    Here are several reasons FedEx Express has not had any layoffs;

    1. They just eliminated our traditional pension plan as of June 1, 2008, saving them hundreds of millions of dollars, and about 10% of our total compensation pkg. We basically no longer have a true retirement plan.

    2. Front-line management just took a 5% permanent pay cut and had their MBO bonuses eliminated. Upper management took 10%,and Fred took 20%. Largely meaningless to the big-buck execs, but a big deal to us.

    3. The 401k company match has been eliminated. If you figure in a small 1-2% rate of return in this crappy economy, that translates to another 5% lost in our compensation including the FedEx match. That would be a 15% total in give-backs in just the last year.

    4. Depending on the area, hours have been slashed, and the company is actively stepping-up the disciplinary process in order to get rid of more people. Think Genghis Khan times two.

    5. Stepping-up productivity expectations into the realm of the impossible, meaning that a lot of couriers work through their breaks and falsify on their PowerPads (DIAD clone) in order to just get it done and keep their job. All by design, and totally unethical.

    6. Eliminating flights and replacing them with truck routes, which are largely contracted-out to save money and keep FedEx tractor-trailer drivers in the poorhouse.

    I'm sure there's more on the way...
  16. emmasdad

    emmasdad New Member

    I was a UPSer for 15 years, some as a driver of two different routes, some in the hub, and some as management. I also spent some time with FedEx Ground as a Pre-load Manager. FE Ground contractors buy or lease their trucks and get paid per stop and per box, which equated to $1.50 per stop and $.50 box. All of the trucks on my line went out stuffed every day, same as a UPS package car. Ground drivers work as hard as UPS drivers do, and don't get this confused with Express drivers. FE drivers cry a lot but have a lot more territory to cover. The BS is the same in both companies with management but FE pays less but has excellent benefits. UPSers think they get benefits for free, they really don't. When I had mine there was a yearly deductible and then an 80-20 split, so really you came out of pocket for every visit more than most copay plans.
  17. govols019

    govols019 You smell that?

    How many companies provide insurance with no yearly deductible?
  18. trplnkl

    trplnkl 555

    On second thought, you guys don't need to unionize.:disgusted:
  19. JimJimmyJames

    JimJimmyJames Big Time Feeder Driver

    Reading the news, FedEx is reconfiguring their Ground business unit away from one route per contractor to a system where a contractor must own multiple routes. I think you could always own multiple routes but by forcing contractors to do so, the drivers who now work for the multiple route holder must go to that person for their salary, benefits, etc. In essence it simply puts a layer between FedEx and the drivers to insulate them from lawsuits. If the drivers of these small multiple route "companies" would try to unionize, they could be fired relatively easily since the "company" they work for is so small.

    As for competition being a good thing in business, it is only good for the consumer, as it gives them choice. As an employee of UPS, I personally would rather have no competition and to be able to set our service levels and price to whatever we could get away with. When your the only business in town, you set the rules. As a consumer, I would admit that would probably be terrible. But then again, a lot of people were happy with Ma Bell.
  20. trplnkl

    trplnkl 555

    JJJ, I see competition as being good for the company too, if for no other reason than keeping us from getting complacent. It's too easy to be the best when you are the only one.