What is UPS really doing about FedEx Ground?

[MrFedEx]

Maybe someone here has connections to the higher-ups at Big Brown and can tell me why they have not been more vocal about the Fedex Ground advantage of using contractors who are really employees? I'm fully aware that UPS is pouring big money into changing the RLA, but that affects FedEx Express and Next Day Air, not ground movements.

UPS seems rather passive regarding Ground, and they've managed to steal away a big chunk of UPS business. Why? I realize I'm an outsider looking-in, but one would think that Brown would be a lot more interested in killing the Ground contractor scam than they would in getting the RLA language changed.

I realize that this has been debated ad nauseum, but why is UPS such a limp wiener as far as actually accomplishing anything to stop FedEx Ground from having such an extreme competitive advantage?

Haters...fire away. But maybe there is someone with some informed insight out there that makes sense.

 

[brownmonster]

We had the chance to crush RPS long before they morphed into Fedex Ground. I always wondered why UPS just let them keep growing. Could it be our mgmnt was too cocky and arrogant to think we could possibly have competition in the ground sector? When I see all the packages in the beige trucks that used to be mine I wonder if it's not too late.

 

[whiskey]

We had the chance to crush RPS long before they morphed into Fedex Ground. I always wondered why UPS just let them keep growing. Could it be our mgmnt was too cocky and arrogant to think we could possibly have competition in the ground sector? When I see all the packages in the beige trucks that used to be mine I wonder if it's not too late.

I think it's a case of Fedex biting off its nose to spite its face. I trust in Brown.

 

[overallowed]

What do you think they could actually do about it? I really don't see how they have gotten a "big chunk" of UPS's business. They have gotten a certain percentage of it, but that was going to happen anyway. During peak, I saw in the back of a fedex ground truck while I was at Walmart. At 11am, he had 3 half shelves left, and he covers the area of 5 ups drivers. During peak. Much was made of them taking the Walmart ground pickup business, which I don't see as a big deal. I could go a week and a half without picking up anything at the WM I deliver to. My guess is they were having to discount WM so heavily, they were losing money on it.
Fedex is going to get a certain amount of ground business of ours, and I don't see how there is anything ups mgmt can do anything about it.

 

[satellitedriver]

Maybe someone here has connections to the higher-ups at Big Brown and can tell me why they have not been more vocal about the Fedex Ground advantage of using contractors who are really employees? I'm fully aware that UPS is pouring big money into changing the RLA, but that affects FedEx Express and Next Day Air, not ground movements.

UPS seems rather passive regarding Ground, and they've managed to steal away a big chunk of UPS business. Why? I realize I'm an outsider looking-in, but one would think that Brown would be a lot more interested in killing the Ground contractor scam than they would in getting the RLA language changed.

I realize that this has been debated ad nauseum, but why is UPS such a limp wiener as far as actually accomplishing anything to stop FedEx Ground from having such an extreme competitive advantage?

Haters...fire away. But maybe there is someone with some informed insight out there that makes sense.

In a nutshell,
stupidity and arrogance by the decision makers of UPS.

 

[UpstateNYUPSer(Ret)]

From what I have been told the WalMart decision was based more on their non-union status than on price.

 

[LED]

Fedex ground is gaining some business, but they are also paying a cost. In my area the fedex home delivery has had 4 people in the past year. The 1st guy got into a fist fight with a customer and fedex took away his contract. 2nd guy ran it for awhile then hired guy # 3. 3rd guy was caught miles off his route smoking marijuana. The 4th person is about 5 feet tall 300 pounds, maybe she will work out ok.
The regular fedex ground guy quit to work at a gas station/food mart - said he would make more moneythere.
Fedex ground has labor problems, which turns into service problems.

However, they are the cheapest in some areas. There seems to be a market for people who do not care when their package arrives at it's destination.

UPS believes that people will pay a higher cost for better service, and seems to be letting fedex ground ruin itself.

UPS does continually make a higher profit than fedex, even with fedex passing off expenses to their contractors. I am sure UPS will change strategies if the profit margin starts slipping.
We may see a price war one day, only time will tell.

 

[Dustyroads]

Actually, according to a regional level manager that I talked to about the Walmart deal, the switch had a lot to do with pricing. Prior to the switch, according to my source, UPS was the preferred shipper for walmart in something like 37 states and Fedex had the contract for the other 13. Apparently, walmart renegotiated rates with Fedex, and now Fedex has something like 43 states, leaving us with 7 or so. Interstingly, the states that we were left with were the big money losers, very rural, geographically large and sparsely poplulated. He mentioned what states we were left with, I don't really remember which ones, maybe they were like nebraska, montana and the like.

 

[Jim Kemp]

We had the chance to crush RPS long before they morphed into Fedex Ground. I always wondered why UPS just let them keep growing. Could it be our mgmnt was too cocky and arrogant to think we could possibly have competition in the ground sector? When I see all the packages in the beige trucks that used to be mine I wonder if it's not too late.

I asked a customer service about this once a long time ago. I asked why we did not just cut their price and crush them. He said there are "Anti-trust laws" and UPS would be sued. He also used the term "predatory pricing".

 

[Brown287]

Interesting enough out here in California it appears that the Ground bleeding has definitely been stopped. When you have to companies offering identical services it inevitable that there is going to be business lost. What is not mentioned is the business that we have actually gotten from FedEx. This Christmas I delivered a ton of packages from both L.L. Bean and Wine Country Baskets both of which were both delivered by FedEx Home Delivery. So yes I believe at first the company was un-pleasantly surprised at the rapid growth of Ground, but have since seemed to get their act in order.

 

[FedExer267]

I believe UPS already has begun to take back business due to the fact they have starting matching Fed Ex prices atleast for the pick up service. The customers are jumpingall over that too because they want the later pick up which UPS can provide because they have 6 routes to Fed Ex Grounds one route. Thats case and point too it takes 6 Ups trucks to cover the area my one truck does I dont believe UPS is hurting at all. I was talking to one of the UPS guys the other day and he told me you guys are still slammed and its a week and a half after Christmas my Peak started the Thursday before xmas eve and was done the Tuesday before Xmas as a matter of fact in the two days leading up to Xmas I had a total of 200 stops thats pretty sad considering its 2 days before Christmas.

 

[Dump and Dash]

I dont think FedEx Ground is as big a threat as is the Post Office. The lines of people were very long at the Post Office this holiday season. UPS blew it when the made the customer counters "self-service". People are intimidated by having to use a UPS customer counter computer to send a package. They liked the old "pay-the-clerk" much better. I know many people that will not use UPS anymore for that sole reason. The USPS Flat Rate Boxes have taken tons of volume away from 2nd Day Air. Not too many years ago all that volume would have went thru UPS.
And while travelling, all those FedEx trailers you see going down the interstate are also carrying packages that used to go via UPS.
I'm sure all the other old timers like me remember all the Harry and David Christmas gift packages. The post office delivers most of that now. That's 3 million H&D packages from Medford, OR and 3.5 million from Ohio that you did not see this year! Not to mention millions of Figis, Hickory Farms, Wisconsin Cheeseman, etc.!
I see the Post Office as UPS's biggest threat in the years to come.

 

[Brown287]

I dont think FedEx Ground is as big a threat as is the Post Office. The lines of people were very long at the Post Office this holiday season. UPS blew it when the made the customer counters "self-service". People are intimidated by having to use a UPS customer counter computer to send a package. They liked the old "pay-the-clerk" much better. I know many people that will not use UPS anymore for that sole reason. The USPS Flat Rate Boxes have taken tons of volume away from 2nd Day Air. Not too many years ago all that volume would have went thru UPS.
And while travelling, all those FedEx trailers you see going down the interstate are also carrying packages that used to go via UPS.
I'm sure all the other old timers like me remember all the Harry and David Christmas gift packages. The post office delivers most of that now. That's 3 million H&D packages from Medford, OR and 3.5 million from Ohio that you did not see this year! Not to mention millions of Figis, Hickory Farms, Wisconsin Cheeseman, etc.!
I see the Post Office as UPS's biggest threat in the years to come.

I would have to disagree with you on this. I delivered all those packages this year and more. I agree that USPS and other regional carriers are a growing threat, but I believe its to FedEx more than us. Some customers just want the lowest price no matter what. So unfortunately that means the same tactics FedEx Ground used against us now are being used against them. Unfortunately for the USPS the flat rate box is a desperate move by a desperate company. They can't make money by giving the service away. So next quarter they will be in the same financial situation that they were in this last one. What are they going to offer next, discounted linen service?

 

[bad company]

I don't think that whole USPS customer counter advantage will last too long. I don't go to the post office much, but I have to now every once in a while because my parents moved out of country and I have to send stuff to their APO AE box.

That said, I absolutely hate the service. The lines are long because they are not efficient. My experience from multiple locations have been extraordinary long wait times, poor service, and contradictory information. I think the older customer base will eventually phase out and what little volume we lose due to a lack of full-service shipping counter will be irrelovent. Also keep in mind that we have UPS stores for that purpose. And UPS stores are lot more accessible and convientently located than UPS customer counters. USPS loses billions a year. They are not a long-term real threat.

 

[29th Christmas]

Ups & fed ex ground beef aren't that interested in gramma's fruitcake that she sends from rural Iowa to rural Wyoming twice a year. They want the business to business bulk!

 

[ups2000]

or thoses snickerdoodles to spokean or that creepy clown

 

[retired2000]

ups could of crushed fedex ground and the post office years ago when they started taking the griound away from us. ups wanted the big dollar parcels ex. nda and 2nd air more then the ground stuff.

 

[Just Numbers]

or thoses snickerdoodles to spokean or that creepy clown

The point should be that none of those snickerdoodles went UPS...did they!

 

[CharleyHustle]

During peak, I saw in the back of a fedex ground truck while I was at Walmart. At 11am, he had 3 half shelves left, and he covers the area of 5 ups drivers.QUOTE]

Did it ever occur to you that the FedEx ground driver most likely started his day at least an hour before we do. Picture your route without next day air stops and little or no residential and leaving the building an hour earlier. Yeah, I'd be canabolizing a few routes next to mine and then some. Going into noon I wouldn't have much left to deliver.

 

[probellringer]

ok....i'll chime in...i'm just a pkg car driver,service provider --whatever the tech term we use is doesnt matter....i deliver packages......BUT.....i listen to these pcm's about sales leads....and raising rates --same % as fedex------why in the world cant we undercut them by a dollar --or even smaller amount to get the customer-----UPS makes more then fedex every yr----imagine if we undercut their prices or didnt raise rates for one yr----the ad campaign we could have....same prices as last yr!!!!same service!!! you mean to tell me we couldnt sacrifice one yr to gain back tons of business from them ......the higher ups really need to listen to me---im on to something... happy new yr